In the competitive waters of marketing, the recent trend of brands slashing their top of the funnel budgets is akin to a fisherman deciding to fish from an empty pond. In other words, it’s unsustainable, argues Mutinex marketing science partner Sophie Murphy.
It’s easy to be lured by the appeal of lower funnel strategies that target existing demand in an effort to save a few dollars. In the short term, these tactics might appear to be a guaranteed way to generate results. But as any seasoned angler knows, depleting a pond of its fish will only lead to barren waters.
Earlier this week, I found myself in another brand meeting where the conversation inevitably turned to budget cuts, with marketing being the first on the chopping block. As I sat there, I found myself contemplating how we can change this outlook for the better. First-hand data shows that focus on lower funnel strategies is not only undermining top-line Marketing ROI but also eroding base sales trends over time.
So, as a self-proclaimed Marketing Science nerd, I’d like to question the bait being cast to catch a fish by drawing on some concrete results that were raised in the Mutinex Q3 Marketing ROI Index report.
As marketers focused on capturing demand by increasing lower funnel budgets in the first quarter of 2024, marketing ROI saw a brief year-over-year uptick. However, by April, it had returned to levels seen in 2023, revealing the fleeting nature of this strategy. The data shows that an increasing portion of finite budgets is being directed toward lower funnel efforts, while upper funnel investments continue to decrease.
This shift is like overfishing; although the short-term results may seem abundant and promising, market demand is gradually eroding. Overall marketing ROI has returned to 2023 levels, and while channel performance at the bottom of the funnel remains strong it is sustaining the bottom line rather than growing it.
In the end, slashing brand budgets may offer temporary relief, but it’s a risky gamble that is looking to jeopardise a brand’s long-term future.
Just as overfishing can deplete a once-thriving ocean, relying solely on immediate returns can leave a brand without the resources it needs to thrive. How long can any brand realistically expect to survive in an empty pond? It’s essential to cast our nets wider and recognise that nurturing demand is just as vital as capturing it.
Sophie Murphy is a marketing science partner at marketing mix modelling company, Mutinex.
