What is an upper funnel marketing channel and what is lower funnel? The classic media mix is a combination of both, with some channels raising awareness and others driving sales. Awareness is driven by upper funnel marketing campaigns and usually TV, Video, or Display are considered as upper funnel. These campaigns are more visual and have a branding purpose. Lower funnel is often considered as performance marketing with data-driven campaigns. Search is one of the main digital lower funnel channels, but there are many more in the offline world as Point-of-Sale promotions.

Is this classification into upper and lower funnel campaigns applicable to my business case and does it really reflect my marketing mix? To determine whether a marketing channel is upper or lower funnel, we use statistical methods as part of our marketing mix modeling approach as you can find in this article.

When discussing these relationships, it is important to keep in mind the time of ad exposure and the time of conversion (see Figure 1). The longer the time between both events, the longer the carry-over effect of a channel.

Since we do not know in advance what the after effect time of each individual channel is, we calculate all possible short, medium, and long carry-over effects for each channel. From the resulting carry-over variations per channel, the option that best fits the overall model is identified within the modeling. The higher the carry-over effect, the longer the after-effect time. As an example, an upper funnel channel with an 80% carry-over effect can be explained as follows: 80% of the advertising effect does not happen on the day of the impression, but on the following 18 days. Conversely, it means that only 20% of the effect takes place on the day of exposure. In addition, the half-life value can be calculated, i. e. after how many days 50% of the initial advertising effect has gone. In the example with 80% carry-over, the half-life is 4 days.

Knowing the carry-over effect per channel and thus knowing the position within the sales funnel provides two valuable insights. First, it is possible to better understand the after-effect time per channel and to take those insights into account in the subsequent media strategy and campaign planning. Second, the carry-over effect and insights into the half-life values can be compared across channels. It shows you if the specific channel is considered as upper funnel or lower funnel.

Upper funnel channels have a long half-life and lower funnel channels a short one. If you look at the results of this example, it shows that search and retargeting are lower funnel as most of the effect is gone after 1 day. TV and Video have a quite long and medium half-life and would be classified as upper and mid funnel.

This is a classic example, but it's not always like this. Very often, TV has a much shorter half-life if you run direct-response campaigns.