Full-Funnel Philosophy: How Does Upper-Funnel Activity Impact Sales?
When upper-funnel ad tactics and tools are cut from a company’s strategy, it's usually because they can’t find good responses to statements like...
“...I'm concerned about the uncertainty surrounding the ROI...”
“...We may not see results within our overall performance metrics...”
“...I'm struggling to find reliable ways to attribute their impact...”
“...The lack of concrete data and analytics for upper-funnel activities makes me hesitant to allocate resources to these efforts...”
“...I fear upper-funnel strategies may not deliver the kind of results we need...”
Every marketing and sales leader experiences different variations of these hesitations and concerns in their strategy meetings, and they tend to fall into 2 categories:
Impact - “How do we know it has the kind of effect we want on the consumer journey?”
Measurement - “How can we quantify performance?”
While every company has a unique set of circumstances to consider, if you’re trying to imagine your own response to the impact and measurement of upper-funnel activity, try our approach to see how it fits.
What Drives Your Full-Funnel Approach to Amazon Advertising?
At GO, we believe in driving efficiency and impact across the full path to purchase, not just the point of purchase.
That often leads us to utilize a full-funnel, multi-touch strategy because we consider each tool to be one piece within the whole as opposed to looking at every product and its performance in a vacuum. If we believe a brand is positioned to benefit from a multi-touch strategy, we design a synergistic approach that dynamically leverages things like Amazon STV, OLV, DSP, and Search, allowing each tool to complement the next and compound the total impact on the consumer journey.
Still, we recognize that upper funnel tools offer a lot of challenges related to impact and measurement, even on Amazon. Amazon’s landscape of upper-funnel tools is complex, and it can be overwhelming if you don’t have the expertise needed to understand the opportunities available or the capacity to capitalize on them.
We believe the results are worth the challenge, and that’s because of how we see upper- funnel investments impacting the consumer journey.
How Do You Know Upper-Funnel Activity Impacts the Consumer Journey?
Our perspective is influenced by things like McKinsey and Company’s foundational research on the Consumer Decision Journey and the role that upper-funnel activities can play.
(Source: McKinsey - “The New Battleground for Marketing Led Growth”)
McKinsey’s Consumer Decision Journey highlights 4 key battlegrounds across the often-irregular paths that consumers take as they move from brand awareness to purchase to loyalty:
The consumer considers an initial set of brands.
Brands enter and exit the consideration set at any point up to purchase.
The consumer selects a brand.
Consumer repurchases the current brand without shopping for others.
Each battleground has its own significance, and McKinsey’s research points to just how vital it is to be included in the set of brands that first come to a consumer’s mind.
In fact, McKinsey found that...
Brands in the initial consideration set were more than 2x as likely to be purchased, when compared to brands considered only later in the decision journey. Downstream consideration might take place, for example, when a buyer performs a more thorough comparison of products using online tools or sees them in person in a retail store.
For those consumers who switched brands, 69% of brands purchased were part of their initial consideration set.
Yet too many brands are happy limiting their prospecting to the bottom of the funnel. This bottom-of-funnel focus can be effective when your main priority is stealing market share. The reality, however, is that brands eventually reach an inflection point at a certain stage of maturity where a myopic bottom-of-funnel approach generates diminishing returns.
McKinsey’s research gives us a glimpse at this as well by revealing correlations between the initial consideration set and market share ratios for maturing brands in shopping-driven categories.
As your market share grows, so should your investment in the consideration phase.
But it’s important to note that the change in investment doesn’t necessarily equate to a change in the overall budget. It might just require a change in your mindset.
Think about all the upper-funnel tactics you’re investing in, not just through Amazon but on social media, linear TV, and any other programmatic platforms. When you’re reviewing the total budget, it’s important to have clear expectations for impact and how to measure performance across each platform.
That’s where we can jump to the next big question every marketing and sales leader is asking about upper-funnel tactics and tools:
How Do You Measure the Impact of Upper-Funnel Activity?
This is an area where Amazon stands out.
When working to prove the impact of a multi-touch approach, Amazon is the only programmatic platform that can show how upper-funnel and lower-funnel ad tools work together to impact conversion on and off Amazon.
Amazon Marketing Cloud’s (AMC) Media Mix Overlap Reporting
With its media mix overlap reporting, AMC can help us measure the compounding impact of a multi-touch approach, driving both an increase in total conversion and ad efficiency along the way.
We recently utilized AMC’s media mix overlap reporting to help a beauty brand achieve...
+99% increase in monthly shipped COGS
+187% increase in monthly SNS sales, and
+15% increase in NTB purchasers
Take a look at this case study to see the details → Multitouch Advertising Strategy Case Study
Amazon’s Omnichannel Metrics (OCM)
By layering in OCM data, you can measure total sales on and off Amazon by tactic, device, and placement. Additionally, there are other metrics like “projected store visits”, which can help you understand the potential audience size for those consumers who see your ads before a trip to the store, even if they don’t purchase your product.
We recently used OCM data to help a client understand the impact of their ads on- and off-Amazon and make optimizations in real-time:
Sales By Tactic - Prospecting campaigns had a stronger impact on off-Amazon sales than on-Amazon sales while Retargeting and Retention campaigns had a stronger impact on on-Amazon sales than off-Amazon sales.
Sales By Device - Most customers on a desktop device purchased on Amazon. While this remains true for customers on mobile devices as well, the split was a bit more even, with on-Amazon comprising 59% of purchases and off-Amazon comprising 41% of purchases.
Sales By Placement - Both O&O and 3P placements experienced more sales on Amazon than off Amazon, but not by much. Off-Amazon made up 40% of O&O sales and 34% of 3P sales.
Take a look at this case study to see OCM in action → Omnichannel Metrics Case Study
How Do You Start (or Restart) Upper-Funnel Activities that Generate an Impact You Can Measure?
We’d love to help. Like so many things in the Amazon ecosystem, it’s easy to waste valuable resources, time, and energy if you don’t know the best use of the tools you’re utilizing. It’s not a one-size-fits-all approach, but we can help you find the right size for your vision, goals, and budget. Click the button below and let’s start a conversation.