In a previous blog post, I brought up the idea of marketing funnels. The marketing funnel is a fundamental concept in all of marketing. The top of the funnel is where you get the most significant reach, and as people learn about your brand, they move down the funnel. Generally, the top of the funnel is for tactics that are more “awareness” focused, while the bottom of the funnel is for tactics that are more “conversions” focused.
This is the paradigm in which most marketing exists. And it’s a helpful framework for understanding how various tactics work. The problem is that this paradigm is set up for corporate marketers. This is how they teach it in marketing books, and then they show you an example of how Nike uses a full-funnel approach to their marketing. Truthfully, unless you’re doing a national campaign, I would avoid any full or complete funnel strategy. The average business in the stock market needs to focus on conversions and not awareness.
Let me start by saying awareness or an “awareness play” is a lark and a buzzword sold by marketing agencies. I’ve worked at marketing agencies, I have sold these larks to clients. Why do marketing agencies like to sell awareness campaigns? Because it’s complicated to measure success. An awareness campaign isn’t about generating more sales. It’s about informing more people of your existence. How do you measure that? The only real way to measure it is to run polls and maybe use a social listening tool, although I’m pretty confident those are larks too. What an awareness campaign allows a marketing agency to do is to run ads with no accountability. The average company doesn’t need and can’t afford this. You’re setting money on fire if you run one of these campaigns.
So I’ve explained that there’s no way to measure success with top-of-funnel tactics, but I have other problems with these tactics. Another issue I have is that CTRs are super low. Below is a handy infographic showing Google CTR. Pay close attention to the CTR of search ads versus display ads.
Only one CTR for display is above 1%. The average is right around 0.5%, which means 1 out of every 200 people that sees your ad clicks on it. These numbers are atrocious. Also, think about the state of mind of the person clicking.
Display ads are usually shown on blog posts or articles. So this is someone who was in the middle of doing something else and then saw the ad and clicked. They are not in the frame of mind to make a purchase, they are at best curious about your product. So display ads have very low CTRs and lead to lower conversion rates in my experience. In the end, I don’ think they’re a very efficient ad type.
Compare that to search ads. The average CTR for search is about 3% a solid six times higher than display ads. But then also consider the frame of mind of the person who sees the ad. This is someone searching for your product or a similar product. This person is far more likely to make a purchase. With a search ad, you get a higher CTR and in my experience a higher conversion rate making it a superior ad type in almost every way.
The final reason I don’t like top-of-funnel tactics is the concept of ad/banner blindness. People have become accustomed to banner ads. They have learned to tune them out and it is one of the main reasons CTRs are so low. People just don’t pay attention to them anymore. Add in the ubiquity of ad blockers and you have to wonder who is even seeing display advertising.
In general, I don’t see the point for display or top-of-funnel tactics for your average business. Social and lower funnel tactics like paid search are much more efficient and more likely to lead to an increase in sales.