Tuning Your Investment in the Digital Marketing FunnelMost of you are aware of the marketing funnel, which describes the different phases in the buyer’s journey. A typical way to slice up the funnel is in terms of Awareness, Consideration, Conversion, Loyalty, and Advocacy as shown in the diagram from Adam Cohen’s blog at right. With limited budgets, in what phase of the funnel do you concentrate your resources? Some folks believe you invest the lion’s share of your resources at the conversion or purchase phase because it is the most efficient. Others believe the Awareness phase is the most important, because developing it is the surest way to grow your business.
Whatever answer you give to this question will likely hinge on analytics. Because it is easier to demonstrate marketing’s contribution to the bottom line at the conversion phase, it’s easier to get budget for those activities. But it need not be so. In this blog I will argue that the limitations of your analytics tooling should not influence your marketing investments.
The Conversion Phase
The gold standard of marketing for the conversion phase is using paid search to drive to a single-offer landing page. With this tactic, the marketer has complete control and understanding of the value of her investments. She knows how long she is available in search for what words, what her click through rates are, her abandonment rates and her conversion rates. With these data, she can calculate the cost per registration, win rate and ROI.
The limitation of this tactic become evident as you run it. Because the key performance indicator (KPI) is cost per registration, you iteratively tune paid search by systematically eliminating words in your search buys that do not perform well. Eventually you get to a small list that converts at a high rate. But the smaller the list, the lower the volume of registrations.
Also, the words clients use in the purchase phase are heavily weighted toward branded words. Naturally, these are the words that convert at the highest rate. But if you are only buying branded words, you are only marketing to existing customers, who are familiar with your brands.
Though conversion marketing has high conversion rates, it has low volume. You can only convert on those who search on a small set of (mostly) branded words, which is a small universe of existing customers.
The Awareness Phase
The gold standard for awareness marketing is to use organic search to drive content marketing. The way I advocate doing this is to mine Google for words and phrases your prospects use, and to build experiences that attract them and begin fostering trust with them. These experiences can include blogs, white papers, videos and other thought leadership. Because these experiences are only effective to the extent that they rank well in Google and garner the appropriate level of clicks and engagements, these experiences are more vendor neutral and less pushy than traditional advertising.
The limitation of this tactic is measurement. Many analytics systems use last-touch attribution, which gives all the credit for a conversion to the last experience the customer had before converting. This is not an issue with single-offer landing pages because the user only has two choices, convert or abandon. For reasons that will become clear, awareness pages cannot use single offer tactics and the binary logic that comes with them. This greatly complicates measurement.
To be effective, awareness experiences must offer a variety of calls to action for the visitor. The words clients use to find this content through search and social means tend to be broader, more ambiguous and nonbranded. To rank well for these words in search, a page needs to offer a lot of click options–one for every related word or long tail in the word cloud for the page.Tracking users through the many clicks they can take in an awareness environment is tricky even with the best analytics systems. Giving proper attribution for these clicks is trickier yet. And if they leave the page to return from a bookmark, everything they did on their first session is lost.
From a reporting perspective, a visitor can have an excellent experience, which makes them much more likely to convert on future visits. But all you can report is they did not convert. If they return from a bookmark and then convert, there is no tactic you can assign to the conversion. These conversions are often discounted in the final analysis because they have no referring source.
Though awareness marketing has much higher volumes, it has low conversion rates. Part of this is natural. If you tell the truth, some of your users will walk away under their own volition. But much of this is tied up in measurement. You just don’t get credit for a large swath of the conversions that happen downstream from an awareness landing page.
The Consideration Phase
The gold standard for consideration phase is to bridge the gap between awareness and conversion with a combination of both tactics. Experiences resemble awareness experiences in the sense that the user has many options to check out prior to making a purchase decision. But the interaction pattern resembles the conversion phase in that all assets are gated, meaning the user needs to submit a form in order to download the asset. (In the awareness phase, most of the assets are not gated because it tends to drive new prospects away by forcing the issue too soon.)
You can think of consideration marketing as the best of both worlds. More users at this phase convert on first landing without clicking to a secondary page, which makes attribution easier. It also features somewhat higher volumes. Most of the words are not branded, but are not as broad as awareness words. So even though the volumes are typically half of awareness experiences, conversion rates are typically several times those attributed to awareness pages.
Still, the consideration phase doesn’t make a lot of sense to prospects. It is for those with whom you have already developed trust, but are not necessarily existing customers. It also features a healthy dose of existing customers, who might want to broaden their relationship with your company. Limiting your investments to the consideration phase will severely restrict your ability to grow.
The Right Mix of Investment
As the funnel chart shows, you need to invest in all of these phases.Treating them independently doesn’t really make a lot of sense because they are all part of one customer journey. Customers don’t care about how you mix your investments. They just want excellent customer experiences, which seamlessly progress them from awareness to consideration to conversion to loyalty and beyond.
But which one is going to get you the most return on your investment? The answer depends on the current state of your site. If you have starved one area in favor of another over the years, remixing to a more balanced approach will be needed.
Many organizations I consult with have favored the conversion phase over the years because it was the easiest to measure and, therefore, the easiest to demonstrate return on investment. But that approach starves awareness experiences, and they are stuck with flat or worse revenue. So they are forced to build awareness experiences and bridge the gap with consideration experiences. I rarely see the opposite problem.
If you are revisiting your digital marketing mix, I recommend reading an excellent study by Optify, which demonstrates many of the things I state above for B2B markers. In particular, it shows how organic search is the leading tactic for conversion volume and paid search is the leading tactic for conversion rate. In the end, a balanced approach works the best.
More Business articles from Business 2 Community: