Be mindful of the leaky funnel problem.
Most organisations are blind to the leaky funnel problem. Counting conversion rates backwards makes attention undervalued and falsely correlated to sales.
With a funnel-centric mindset, organisations will not only systematise the mistreatment of millions of non-converters by undervaluing their attention but also fail to meet their stakeholders’ information needs.
Here we go:
The Leaky Funnel Problem
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The Leaky Funnel Problem
By definition, businesses have a bottom line:
Making money.
The most widespread approach to solving the PESO paradox of allocating resources between different types of media channels is to trace each marketing and public relations activity to a final transaction.
This is done via a funnel.
“Digital funnels of sales, combining search optimization and web analytics, are key components in digital marketing, promoting website advancement and increasing sales volume.“
Source: Research of the marketing instruments of adoption of management decisions in the field of planning and business development 1Zinchenko, A., & Kolosova, V. (2019). Research of the marketing instruments of adoption of management decisions in the field of planning and business development. Vestnik Universiteta. … Continue reading
Suppose your funnel aims to attract social media awareness to produce inbound traffic to your website. There, you convert visitors into email subscribers who are primed to convert into transactional customers over time. In that case, it’s possible to calculate the monetary value of a single social media click based on the average order value — or customer lifetime value.
Counting conversion rates backwards, it’s not uncommon for organisations to find that one single transaction at the bottom of the funnel requires one million social media impressions at the very top.
In the eyes of funnel-centric organisations, the value of an individual’s attention gets diminished to a fraction of a marketing dollar — when attention is arguably an invaluable resource.
This approach is a “100% pure marketing mindset” — and extremely problematic.
Consider all the various types of stakeholders. A subset of these might be interested in being pushed through the organisation’s funnel — but far from all of them.
Simply put: Funnels leak.
So, how must we think about funnels?
Learn more: The Leaky Funnel Problem
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Funnels: Related Reading
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PR Resource: The PESO Paradox
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The PESO Paradox
According to the PESO model, there are four types of media channels:
How do you categorise these four types of media channels? A popular approach is to divide them based on corporate function:
Function: Marketing
Function: Communications
Another approach is to divide the PESO media channels based on corporate UIX control:
Brand Experience: Full Control
Brand Experience: Partial Control
Brand Experience: No Control
A third but central approach to the PESO media channels is based on conversion/monetisation strategies:
Value: Awareness
Value: Transactional
The various above perspectives force organisations to face problematic paradoxes:
The PESO paradox = paid, earned, shared, and owned media channels can be grouped in different ways that are equally and simultaneously true but also strategically conflicting, which creates a measurement problem (comparative validity) for organisations.
How do you set up a reliable process to accurately determine how to distribute your media channel investments?
Applications of the PESO paradox:
Please note: The PESO model has “fuzzy edges” due to various hybrid media forms. For example, you can run campaign banner ads or social forums on your website or add advertising spots within editorial social media content.
Learn more: The PESO Paradox
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ANNOTATIONS
1 | Zinchenko, A., & Kolosova, V. (2019). Research of the marketing instruments of adoption of management decisions in the field of planning and business development. Vestnik Universiteta. https://doi.org/10.26425/1816 – 4277-2019 – 2‑24 – 27 |
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