What is the performance difference between Top and Bottom Funnel ads?

Most marketers are familiar with and have worked, with funnels — a way of visualizing the customer journey from awareness of a product or service to purchase.

Top funnel refers to audiences that are in the awareness stage. This means that they do not know about the brand and are likely just finding out about it. This is the same as a "broad" targeting setting on Meta platform, which is also why these audiences are much larger than bottom funnel audiences.

Bottom funnel audiences know your brand (awareness), have a need (interest) and are perhaps looking at options (consideration). They are considered "warm" because they only need a final push to make a decision and purchase. The targeting setting for these audiences is "custom," as they are more specific and targeted.

It is important to note that top funnel audiences may perform worse than bottom funnel because they are considered "cold" and may be less likely to convert.

Building a solid bottom funnel audience can be tricky, time-consuming, and costly. But every brand has the opportunity to market to the top funnel at any time. While getting a high conversion rate from top funnel audiences may be challenging, it is still essential to consider their potential as part of a comprehensive marketing strategy.

Targeting the Top funnel has a 47% lower performance

One of the most noticeable differences between top and bottom funnel audiences is the conversion rate or the percentage of people who purchase interacting with a marketing message.

Bottom funnel audiences are more likely to convert because they already know about the product, its features, and different options. They are knowledgeable and ready to purchase, having had multiple touchpoints with the brand, which leads to better recognition and trust.

On the other hand, top funnel audiences have yet to realize the need for the product or consider different options, which is why they tend to convert 47% less than bottom funnel audiences. This is because they are beginning the customer journey and may not yet be ready to purchase.

Read our 5 tips to increase purchases with Facebook ads.

Marketers must understand this difference and tailor their marketing efforts accordingly to maximize conversions.

The cost of advertising is 35% higher for Bottom funnel

Based on the previous insight about conversion rates, it is clear that Bottom funnel audiences are more attractive to advertisers who are trying to generate conversions and revenue.

This is because these audiences are "ready-to-buy," meaning they are more likely to purchase after seeing a marketing message.

As a result, advertisers compete for the attention of these valuable customers, which drives up demand and, in turn, the price to advertise to them.

The cost to advertise to Bottom funnel audiences is higher due to this higher demand. One way to measure the cost of advertising is through the CPM, or cost per mile, which is the cost per thousand impressions.

When trying to reach Bottom funnel target groups, the CPM is typically 35% higher than it is for top-funnel audiences. This is because Bottom funnel audiences are considered more valuable and are, therefore, more expensive to reach.

Top and Bottom funnel ads have almost the same Click Through Rate

While top and bottom funnel audiences differ significantly in terms of conversion rates, there is one area where they differ minimally: click-through rate (CTR). CTR measures how often people who see a marketing message click on it. Whether the audience knows or doesn't know the brand does not impact the CTR much.

This is good news for advertisers with objectives other than just creating conversions and revenue, such as reaching new customers, generating retargeting leads, or increasing brand awareness.

Top funnel audiences are just as likely to click on a marketing message as bottom funnel ones but at a lower cost. This means that top funnel audiences can be a cost-effective way to achieve other goals than purchases, as long as the lower conversion rates are considered.

All that being said, there are many different ways you can design and customize your top and bottom funnel ads to include relevant information, such as price, discounts, logos, and more, which can have a huge impact on how your ads perform.

That's why we always recommend switching out different elements, and running A/B tests to ensure that your ads are optimized to be the best they can be!

Let’s review the performance differences between Top and Bottom Funnel.

The main difference between top and bottom funnel audiences is those bottom funnel audiences are further along in their buying journey than top funnel ones. Top funnel audiences need more time and information before they are ready to convert.
Focusing on bottom funnel audiences may be tempting because of their higher conversion rate, but this comes with a higher advertising price.
If immediate conversions are not the sole concern, top funnel audiences can be a great way to grow a business's awareness and customer base.
Both top and bottom funnel audiences are necessary for a business to function properly. It is crucial to approach each audience with the right strategy, as using a bottom funnel approach for top funnel audiences may not result in sales.

Dataset

The dataset from this article is based on 550M impressions and 49.6K pieces of individual content on Meta (Facebook) platforms. It takes into account data from all countries and industries, with the campaign objective of Conversions, targeting a top-funnel audience. The period is from 1. September 2021 - 16. September 2022.

Numbers are looking at correlation only, not causation. Remember to check your own data: numbers for different brands, industries, and contexts will vary.

If you were intrigued about a specific insight, you can go in-depth into the various dimensions and how data can be segmented in Confect, here.