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Forget the Funnel, Focus on Growth

DigitasLBi

John McDonald

Forget the Funnel, Focus on Growth

About 30 minutes into the movie “Argo,” CIA officer Jack O'Donnell (played by Bryan Cranston) remarks, “This is the best bad idea we have,” which is an apt characterization of my feelings regarding the marketing funnel, also known as the AIDA behavior model.

Invented in the 1890s as a guide for writing good ads, the funnel has somehow survived despite being a terrible proxy for consumer behavior and an inaccurate depiction of the modern consumer journey, failing to accommodate concepts like user experience as critical factors in drivers to purchase.

Yet, like a horror movie villain who can’t be killed, it has persisted and remains widely in use as a marketing planning tool.

Some have offered recent critiques of the model, most notably Sheryl Sandberg, who described the funnel as "collapsing" at Dmexco this year. Her argument is that digital has accelerated the process by which consumers move from awareness to preference to purchase, primarily due to new digital touch points like Facebook and the transformative impact of mobile.

Unsurprisingly, Facebook and the other tech behemoths have an answer for the collapsing funnel, which you may be able to already guess. That’s right, it conveniently involves investing more ad dollars into their platforms and using more of their ad products.

If all was well in the marketing garden, this debate might be nothing more than an entertaining distraction. However, marketers and their agencies are facing some unpleasant realities. Half the Fortune 500 companies experienced declining revenues in 2016, despite an increase in their media spend, Bob Liodice, CEO of the Association of National Advertisers, said last month during the organization’s Masters of Marketing conference.

In this world, where many are questioning the ability of marketing to drive business growth, these issues and questions matter. Marketers shouldn't have to settle for a choice between the status quo or a self-serving critique of it.

Clearly there is an opportunity to do better. The first step in designing a new approach must start by acknowledging three enormous changes in the marketing landscape:

1. What we know about human behavior has taken a significant leap forward. New disciplines and techniques, from behavioral economics to social psychology, have undermined the fundamental basis of the funnel and transformed our understanding of why people behave the way they do.

2. What we can see and measure about prospects and customer behaviors is immensely richer than in the past. The data trail left by consumers continues to grow exponentially, from search intent to social sentiment to customer transactions, while new data from connected devices is available in ever-increasing amounts. In parallel, our ability to process this information and turn it into useful marketing insights has matured dramatically.

3. What we can do in response to our greater knowledge is radically different than it was 20 years ago. Yes, this includes enhanced targeting and personalization capabilities but that's not all. It is the opportunity to create digital experiences, products and services that make brands easier to buy and more delightful to interact with.

What Do Brands Need To Do Next?

To most effectively take advantage of these new opportunities, I recommend brands prioritize the following: 

1. Embrace behavior: One of the most pernicious effects of the funnel is how it primarily frames marketing problems as "attitudinal" (awareness, consideration, preference). It’s time to acknowledge that "I think, therefore I do" is often more a case of "I do, therefore I think’" and elevate the focus and importance of behavioral outcomes and behavioral thinking in marketing strategy, planning and KPI development. In the long run, this should apply as much for brand marketers as for performance-driven ones.

2. Reframe your goals: Ask different questions of your brand-building efforts. For instance, rather than asking if we are moving consideration or preference, ask questions like: (a) Is my brand motivating? Am I increasing the motivation of consumers to buy my product or buy more of my products? (b) Is my brand contextual?Am I putting the brand where the consumer is at the right time? (c) Is my brand frictionless? Am I making the brand as easy as possible to engage with based on the action I want the consumer to take? (d) Is my brand useful? Am I enhancing the level of utility, service and experience my brand delivers?

3. Commit to building a single customer view: In a world where consumers expect that brands will recognize them and be personally relevant, building the capabilities to understand and engage customers at an individual level with more tailored experiences and products is critical to growth.

Marketing is facing a world where the dizzying pace of technological change has outpaced our strategic foundation – we have hyper-targeted ads, but misguided campaigns. The alluring promise of digital ROI encourages us to prioritize short-term tactics over long-term investment, which remains harder, for now, to quantify and justify. In this environment, the funnel is simply not equipped to guide marketers to drive brand growth. I hope the steps above can help us begin to establish something better.

John McDonald

John McDonald

EVP, Group Account Director

John is a 15-year industry veteran, having worked client-side, agency-side, and in the startup world. At DigitasLBi, he oversees the American Express acount and sits on the New York region ELT. 

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