Driving growth requires campaigns to serve both long- and short-term objectives, which means digital marketing must be effective all the way through the funnel. Here’s how brands can achieve it
8 December 2022
UK adults now spend two hours more per day on digital media than on traditional channels, according to eMarketer. This is not only changing how they buy products and services but also how they become aware of brands and consider them for future purchases.
Traditionally, digital has been seen as the activation channel at the end of the customer’s purchase journey. However research by Nielsen, Nepa and GfK has highlighted the importance of optimising both short- and long-term growth objectives across all media channels. By setting up their campaigns accordingly, today brands can drive direct response and sustained growth from digital media, as well as increasing short-term conversion.
Consumers today are interacting with a wider range of more immersive formats - particularly video - that offer more engaging experiences at every stage of the customer journey. Audiences are also discovering new products and services from fellow consumers online. Successful brands therefore realise they need to drive sustainable sales and profit growth from their digital marketing by extending reach to wider audiences across the full funnel - from creating brand awareness through to aiding consideration and conversion.
To do this, they are reappraising strategies, budget allocation and execution. They are moving away from reaching narrow segments of customers with performance-driven campaigns, and instead widening the brand’s awareness at the beginning of the customer journey.
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By Albert Abello Lozano, head of automation, Treatwell
Levers of growth: How the role of digital marketing has transformed
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In order to engage consumers across the funnel, it is important for brands to provide experiences that meet consumers where they are and shift hearts and minds. Research conducted by Nepa and commissioned by Meta shows brands that succeed in building more meaningful brand relationships with customers based on their campaigns - for example by generating awareness or intent to buy - improve their total ROI by 59%.
To achieve meaningful experiences, brands have an opportunity to deploy a fuller range of advertising formats, and let algorithms personalise them to match a user’s preferences. These will likely include both long and short videos, influencer campaigns, branded content and interactive formats such as augmented reality, as well as direct response offers at the performance end of the funnel.
Connecting brand experiences using multiple ad placements can drive over 80% higher performance on brand outcomes, according to a meta-study by Meta. And Meta internal research shows campaigns are twice as effective when a campaign uses at least four formats, and even more so with six or above.
German online retailer Otto is a good example of a brand expanding its repertoire of formats. For awareness it has been concentrating on Instagram Stories and video ads, while for consideration the main focus is on video and photo ads. For conversion, ‘collection’ and ‘carousel’ photo and video adverts are deployed, as are dynamic ads and app install ads.
Through using the best ad format at the right stage of the customer journey, Otto increased ad recall by 19 points and boosted brand favourability metrics by 6.6 points for its 2020 holiday campaign. At the conversion end of the funnel, it has seen incremental purchases rise by 4.7% with incremental app installations rising 96%.
Experiences that engage consumers
Wise’s shift to targeting broader audiences led to
more customers
Incremental gains
Campaigns reaching users across the funnel drive more conversions by delivering additional reach
Marketers should also move away from thinking of target audiences as people from particular demographics who are in-market for their product; many potential customers will not fit these traditional marketing personas. Widening reach at the top of the funnel can help find untapped audiences who are in-market but are not yet signalling high levels of purchase intent. At this point, algorithm-based personalisation can look at online behaviour to understand consumers and optimise campaigns in flight.
Taking this approach can greatly reduce the cost of acquiring new customers. When jewellery retailer Pandora embraced a full-funnel approach, increasing brand spending on Facebook by 53%, it improved reach by 148% and saw the cost per incremental conversion drop by 73%.
Roisin Donnelly: We need to really understand what the customer wants. What does the customer need? Who is the customer? What do we need to do to make it easier for the customer? I hope we can educate them better – we must be absolutely customer-obsessed in everything we do.
Michael Inpong: The number one rule for personalisation is delighting the customer. And part of delighting them is answering their desire for privacy. ■
The final mix of ad formats and budget allocation will vary from one brand to another, but the simple premise remains that optimising growth through digital channels requires a focus on brand as well as performance marketing. More people always need to be introduced to a brand, generating new customer relationships and avoiding repeated exposure of the same offers to existing audiences.
By first setting out clear objectives and goals for how new, diverse audiences are reached, brands can use digital platforms’ algorithm-led personalisation to optimise their campaigns, delivering the right message at each stage of a customer’s journey. The result will be customer growth, higher value conversion and ultimately more profitable sales.■
Performance only
Performance plus extended reach
Driving growth across the funnel begins with the setup. Audiences and ad formats are obviously critical to success, but marketers do not need to be as prescriptive as they may think. Many of these decisions can be made more efficiently by focusing first on combining broad prospecting with conversion optimisation goals in order to maximise growth. With the right campaign setup, algorithm-based personalisation can then optimise how messages reach new audiences and guide them towards conversions.
Wise, the global technology company building new ways to move money around the world, has demonstrated the power of broadening digital marketing’s reach, increasing customer numbers by 3.4x as a result of engaging audiences earlier in the purchase journey across Meta platforms. Wise wanted to raise awareness and consideration of its core offering among new audiences in Australia, while also increasing conversions from its direct response campaigns. So, focusing on adults in New South Wales and those who had previously visited the Wise website, it tested the effect of ads optimised for traffic and video views when running alongside direct response ads.
Broadening reach drives growth for brands
conversion rate
By reaching consumers earlier in their
purchase journey, Pandora achieved
increase in reach
drop in incremental conversion costs
By targeting users across the purchase journey using multiple placements, Otto achieved
rise in ad recall
rise in incremental purchases
Reach campaign targeting broad audience
This highlights one of the main prerequisites of moving to a full-funnel approach: a change in mindset. Constantly advertising to a highly defined group risks saturating that audience - for a typical large performance advertiser, the vast majority of people they reach in a month will have already seen their campaign - whereas broadening the initial target audience can both recruit new customers and improve conversion.
Compared with direct response alone, the additional brand-led ads not only delivered more customers but also doubled the conversion rate, and raised ad recall and message association by 3.1 and 1.1 points respectively. As Wise’s paid social manager Beth Clarke summarised: “By expanding our audience strategy, we enabled our direct response campaigns to perform at a higher level.”
