“The funnel,” in advertising terms, has variously been termed “the buying funnel,” “the marketing funnel,” “the purchase funnel” and “the sales funnel.”
Originally Published at MediaVillage
Whichever the preferred nomenclature, it can broadly be described as the cycle through which consumers trek from product/service/brand awareness to loyalty. The concept has been enunciated, illustrated and otherwise used for decades in order to help categorize and visualize the major steps along this path toward the product or service provider’s (and their marketing partners’) desired connection with the customer.
And, while it may seem to be largely the province of audience-measurement researchers, those who are in any way involved in the buying and selling of advertising should consider themselves part of “the funnel” – and should always consider it useful to keep abreast of industry and economic trends impacting that funnel.
We expect to elaborate more on our team’s views on the funnel itself in forthcoming posts. As a first step, we thought this might be a good opportunity to reflect on recent, current and emerging video-industry trends that are impacting the funnel.
As representatives to the ad community on behalf of both MVPDs and small businesses, we typically find ourselves on the front lines of the discussion of media-consumption trends -- and often the tip of the spear, if you will, on marketing decisions that are made at the local and regional levels. Our role often places us in the privileged position of not only learning new developments in marketing science at the early stages, but also in having the ear of constituents at both ends of, and throughout, the funnel.
Arguably we’re at a time of profound change in video-consumption habits -- some of it spurred by the aftermath of the pandemic, and related economic trends.
For example, according to a January 2024 analysis by Kantar, economic pressures have caused consumers to scale back on their number of SVOD services, though SVOD usage remains highly elevated from 2021. Generally, a scale-back in pure SVOD subscriptions likely bodes well for AVOD, and of course SVOD providers increasingly have offered ad-supported options.
Inflationary pressure also has led consumers increasingly toward private labels and less-expensive retail options – though, as Kantar notes, this trend might benefit small local businesses.
In terms of overall media-consumption habits, linear TV viewing remains King of the Hill – though the definition of “total TV viewing” has evolved. And, in fact, total TV viewing enjoyed a four-year high in January, with usage up 3.7% from December among P2+, per Nielsen.
But the outsized primacy of NFL games has only become more stark: Not only did CBS Sports' carriage of Super Bowl LVIII deliver the game’s most-watched telecast in history with a 123.4 million average viewers across all platforms, but Peacock’s January 13 stream of an NFL playoff game scored a precedent-setting 3.9 billion viewing minutes.
Overall, streaming, increasingly bolstered by NFL and other sports, accounted for a 36% share of viewing, up from 32.8% a year ago, while cable had a 27.9% share and broadcast viewing had a 24.2%, per various sources.
Recent earnings announcements and other releases of data underscore the growing streaming trends. Roku’s recent quarterly revenue grew a healthy 14% and the company reported more than 80 million active accounts, an increase of 10 million for 2023. The fact that Roku’s shares have undergone recent tumult owes more to an alignment of Wall Street expectations with reported results than the resiliency of digital advertising -- though it does underscore challenges to the predictability of digital-ad revenue trends, which also inter-relates of course to economic trends impacting advertising.
We must also accept the inexorable advance of social media – and, hand-in-hand with that, AI and machine learning – as part of the marketing process.
For example, Meta recently disclosed it is testing a feature that uses Instagram data to help brands determine the optimum use of creators for their campaign goals. Not to be outdone, TikTok recently announced Creative Assistant, which is “designed to support your video creation journey, helping you to brainstorm ideas, understand best practices, uncover trends, and find inspiration.” TikTok is doing just fine, by the way; overall spend on the social media app for 4Q24 was up 43% from 1Q23, with video games, online games and subscription streaming services accounting for close to 30% of the $1 billion in quarterly ad spend, per MediaRadar.
To be sure, as noted by Digiday among others, media agencies for years have been applying machine learning, though largely in data, measurement and analytics. But increasingly, participants within the funnel are looking to generative AI to sharpen creative executions in the never-ending effort to customize messaging and outreach to specific consumers. This increasingly promises to carry over to all aspects of marketing and commerce.
We of course continuously evolve our own business model to accommodate these trends, expanding our portfolio of services and platforms in order to help clients find consumers wherever they may be and, hopefully, when they may be in the right mind to receive a particular marketing message. For example, we’ve talked about our increased usage of advanced, audience-targeted advertising tools and the latest concepts in digital out-of-home (DOOH) advertising, and our conversations with clients increasingly revolve around holistic solutions designed to help them find the ever-elusive customer prospect.
Familiarity with the latest tools, technology and marketing theories are crucial to this process, as is keeping a finger on the pulse of economic trends. More to come on this ever-dynamic topic.
I encourage readers to reach out with their questions or thoughts. Feel free to email me at info@viamediatv.com
Posted at MediaVillage through the Thought Leadership self-publishing platform.
Click the social buttons to share this story with colleagues and friends.
The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.org/MyersBizNet.
