Determining a budget split between upper and lower-funnel is a recurring topic in paid media.
Upper-funnel campaigns (typically awareness and interest) create future demand, while lower-funnel campaigns capture existing demand and are built to drive action.
Knowing where the sweet spot is with budget allocation is a skill, and requires a sound knowledge of incrementality and how to balance immediate efficiency with long-term demand creation.
In this post, I’m going to explore the data, strategies, and channel considerations to help you find an optimal mix.
The Importance Of Upper Funnel Investment
Within paid media, it’s very tempting to pour the majority of budget into the quickest wins that yield the highest returns. It makes sense on many levels, especially when teams are budgeting (and working to) strict forecasts and targets.
However, neglecting upper-funnel spend can hurt your long-term growth, with research showing that cutting brand awareness campaigns to save money or simply avoiding this type of activity can backfire.
For example, a BCG analysis found companies that slashed brand marketing saw significantly worse outcomes, having to regain their lost market share later, requiring $1.85 in spend for every $1 saved from cutting back.
In a roundabout way, suggesting that saving a dollar today on branding can (in some cases) cost nearly two dollars tomorrow.
And it’s not just efficiency; the growth impact of neglecting brand building can be detrimental, too.
In the same study from BCG, bottom-quartile brand spenders had sales growth rates 13% lower than top-quartile brand spenders, indicating brands that underinvest in awareness suffer from lower sales growth in the long term.
They also converted aware consumers to buyers at a lower rate (a 6% weaker conversion from awareness to purchase than top-brand spenders).
Studies like this prove that upper-funnel activity isn’t just a nice-to-have, or a place to use budget left over from lower-funnel spending; it directly influences revenue trajectory, market share, and even shareholder returns.
At this point, you’re probably thinking, “What do you mean by upper-funnel activity?” So let’s have a top-level run-through.
Upper-funnel campaigns plant the seeds by reaching new audiences and generating interest in audiences who may not yet be familiar with your brand.
Think Meta or Pinterest campaigns serving ads to new users as part of broad audiences, interest-based cohorts, or lookalike lists, all excluding your current customer base and/or users who have interacted with your brand.
Think YouTube or GDN campaigns serving ads to in-market, affinity, or custom audiences, again, all while excluding your current customer base.
For this post, we’re focusing specifically on paid search and paid social, with a supporting role from display advertising served through Google and Microsoft.
While programmatic, out-of-home, TV, connected TV, PR, and other channels can all be effective for upper-funnel advertising, they fall outside the scope of this piece.
My aim here is to focus on how to allocate budget toward top-of-funnel activity, specifically through paid search and social platforms.
Balancing Short-Term Performance And Long-Term Brand Building
While the exact percentage will vary by business, a number of frameworks and studies offer guidance on balancing upper vs. lower-funnel spend.
The most well-known being Les Binet and Peter Field’s research into marketing effectiveness, which suggests roughly a 60/40 split.
This translates into 60% of ad budget for brand building (upper-funnel) and 40% to direct activation (lower-funnel) as a rough starting point.
This 60/40 rule isn’t rigid, but it underscores that at least half (if not more) of your spend should typically go toward awareness and brand in order to maximize long-term growth.
Other models follow suit and emphasize a hefty allocation to upper-funnel activities.
For instance, many marketers use a 70-20-10 rule (adapted from a learning model) to diversify marketing investments: 70% on proven “always-on” channels, 20% on new or emerging channels, and 10% on experimental ideas.
Often, those proven channels include your core lower-funnel performers, while a portion of the 20% and 10% go toward upper-funnel initiatives.
Another approach, specific to paid media funnel stages and widely used in paid social campaign structuring, is a 60-30-10 funnel split: about 60% of budget for prospecting and awareness, 30% for mid- to lower-funnel retargeting, and 10% for closing at the bottom of the funnel.
This model ensures the majority of spend focuses on feeding the funnel with new prospects, while still dedicating budget to nurture them down to conversion.
Is every business other than yours running these exact models? Nope.
Does every business ensure it allocates sufficient media budget for upper funnel? Nope.
A 2024 CMO survey, found that only 31.2% of budget was allocated to long-term brand building vs. 68.8% to short-term performance on average, the opposite of what we’re told from industry leading studies, and this imbalance shows how pressure for quick ROI can overshadow brand investment and from working within paid media for a decade and a half, this is something I see time and time again.
Studies and guidelines are great, but in reality, there really isn’t a one-size-fits-all answer to the exact percentage of budget to allocate for upper-funnel, and it depends on factors like your industry, growth goals, and brand maturity.
For example, a new market entrant or a brand in a highly consideration-driven category (like automotive or B2B tech) may need to invest heavily in awareness and education since customers won’t convert without multiple touches and trust-building.
In contrast, a well-known brand in a transactional ecommerce vertical might get by with a lower percentage on upper-funnel, especially if it already benefits from high awareness.
Evaluate your current situation: If you’re in a crowded consumer goods market (e.g., retail fashion), strong branding and broad reach can differentiate you, whereas in a niche B2B service, thought leadership content and awareness efforts might be what fills the pipeline for your sales team.
The one certainty with this topic is that completely ignoring upper-funnel advertising with paid media is not good.
Even if short-term conversion pressures are high, dedicate a healthy portion of your budget to feeding the funnel.
A useful mindset is to treat awareness spend as an investment in future revenue.
As marketing effectiveness veteran Mark Ritson advocates, you must balance “the long and the short of it,” fund the brand for long-term growth and performance marketing for short-term sales.
Many successful companies treat brand marketing as “always-on” (continuous) rather than a luxury to add when times are good.
In practice, this could mean making sure, say, 20-30% of your paid search and social budget is consistently reaching new cold audiences at any given time, even if attribution for those dollars is not immediately obvious (more on that later).
What Does Upper-Funnel In Paid Search And Paid Social Look Like?
Translating budget allocation into channel strategy requires understanding how each paid media channel fits into the funnel.
Paid media is not one-size-fits-all; channels like paid search, paid social, video, and display each serve distinct roles across the funnel, from awareness to conversion.
Here are a few approaches to upper-funnel budget allocation across key channels:
Paid Search (Google & Microsoft Ads)
Paid search is typically considered a lower or mid-funnel channel; the reason being, this channel is often seen as a place to capture users who are actively searching for a product/service, often indicating intent.
Advertisers frequently split their campaign groupings into brand and non-brand, driving visibility in line with query types across search and shopping networks.
Imagine you run an ecommerce store for sneakers, you may want to serve brand ads to tailor messaging, control, brand protection, incrementality, etc., and for non-brand, you may want to serve ads for queries like “black Nike GT Blazer low” or “Asics Novablast 5,” the sole purpose being to drive direct sales.
There’s arguably an element of upper funnel in non-brand search as advertisers enter auctions for queries that do not contain their brand, and in many cases exclude their website visitor lists, so when a user searches for a query like “black size 10 running shoes” and click through, the advertiser will be getting their brand in-front of new audiences, however, the objective of the campaign is not one of awareness.
Read More: Tips For Running Competitor Campaigns In Paid Search
Display (Google & Microsoft Ads)
While not always front of mind for upper-funnel strategy, the Google Display Network (GDN) is great for reaching new audiences at scale as it spans over 35 million websites and apps, including YouTube, Gmail, and top-tier publisher inventory.
This breadth gives advertisers the ability to serve visually engaging ads across a vast portion of the open web, tapping into contextual, affinity, and in-market audiences.
For upper-funnel campaigns, display is often used to spark interest through static or video creative, product banners, or lifestyle-led visuals that introduce the brand to users in relevant contexts.
With options like responsive display ads, you can dynamically test creative combinations and reach a broad but targeted audience, saving time and money as resources can be freed up that would have been spent on creative development.
When allocating budget, display may not command as much as social or video initially, but it serves a valuable supporting role in prospecting and awareness.
Brands in verticals like consumer goods, travel, or SaaS can use Display as a cost-effective way to expand, reach new audiences, and drive visibility and traffic to site.
Read More: What Are Display Ads: A Complete Guide For Digital Marketers
Paid Social (Meta, Instagram, TikTok, LinkedIn & More)
Paid social is one of the most common types of advertising for upper-funnel marketing.
Platforms like Facebook/Instagram (Meta), TikTok, Pinterest, LinkedIn, and others offer rich targeting options to get your message in front of people who have never heard of you, but who fit the profile of your target customer.
Nearly three-quarters of the U.S. population (73%) were active social media users. For advertisers, this means the audience they want to reach is likely out there scrolling a feed.
For upper-funnel campaigns, social ads shine by allowing you to target based on interests, demographics, behaviors, lookalike audiences, and more, pushing visually engaging content to users who aren’t actively seeking your product yet.
When allocating budget, a significant chunk of your prospecting (new customer) budget will likely go into paid social.
You could use short-form video ads showcasing your brand story or product in use, carousel ads with inspirational lifestyle imagery, or interactive polls that get people interested.
The goal at this stage is not an immediate sale (though it’s great if it happens, and it does), but to introduce your brand, value proposition, or content to a relevant audience as efficiently as possible.
Read More: How Brands Are Measuring Social Media Impact
YouTube And Digital Video
No discussion of upper-funnel paid media budget allocation is complete without YouTube and online video platforms.
YouTube is effectively the new prime-time TV for many demographics, blending reach and targeting with the storytelling power of video.
YouTube ads can achieve massive scale, with 53% of marketers using YouTube to achieve various objectives such as reach, awareness, and conversions.
With YouTube’s advanced targeting (by interests, demographics, in-market intent, topics, etc.), you can home in on relevant audiences for your brand messaging at scale, and drive reams of valuable data.
Recent forecasts bolster advertisers’ confidence in YouTube’s ROI, with 44% of marketers planning to increase their YouTube marketing budget.
The momentum is driven by video’s effectiveness in lifting awareness and brand favorability.
Kantar research, for instance, has shown YouTube ads can substantially boost unaided brand awareness and other brand metrics, underlining the platform’s upper-funnel impact.
For practical budgeting, treat YouTube similarly to how you’d treat television in a media mix, a primary reach vehicle.
The difference is, YouTube allows flexible budgets (you can start small and scale) and measurable results (you can track views, clicks, and even use Brand Lift surveys to measure ad recall and brand interest).
If you’re in a consumer-facing vertical like electronics, fashion, or automotive, you might allocate additional budget to YouTube for big awareness pushes around new product launches or campaigns, too, in addition to always-on brand building.
Even in B2B or niche markets, consider using YouTube for educational top-of-funnel content (e.g., explainer videos, industry thought leadership) targeted to relevant audiences.
Read More: 10 New YouTube Marketing Strategies With Fresh Examples
Measuring Upper-Funnel Impact And Winning Buy-In
One reason many companies double down on lower-funnel spending is that it’s directly measurable; you see clicks and conversions, which please the performance dashboard and finance team.
Upper-funnel efforts often lack that immediate clarity on attribution, making it harder to justify budget to skeptics.
This is why measuring the impact of upper-funnel campaigns is crucial to determining the right budget allocation (and getting organizational buy-in to maintain and/or scale that spend).
Start by defining key performance indicators (KPIs) for upper-funnel campaigns that tie to your objectives.
These will be different from pure conversion metrics. Common upper-funnel KPIs include:
- Reach and Impressions: How many unique people saw your ads? How many people did you reach?
- Engagement Metrics: For example, video views (and view-through rates), social shares, comments, likes, or clicks on content. If people are engaging, your message is resonating at least enough to spark interest.
- Click-Through Rate (CTR): While upper-funnel ads often have lower CTRs than the likes of Search Ads, a healthy CTR indicates the creative and targeting are attracting interest among a cold audience.
- Brand Search Lift: Track the volume of searches for your brand name and/or direct traffic to your website during and after campaigns. An increase can signal that awareness efforts are causing more people to seek you out.
- New User Acquisition: Look at the percentage of new visitors or new customers acquired. Upper-funnel campaigns should feed new people into the pipeline.
- Brand Lift Studies: Use tools like Facebook’s Brand Lift or YouTube Brand Lift surveys, which can directly measure ad recall, brand awareness, and consideration among those exposed vs. a control group.
It’s also important to measure impact on a wider scale, taking a step back and analysing exactly how your upper-funnel spend impacted the business.
For example, you might find that regions where you ran a heavy awareness campaign see higher conversion rates in the subsequent weeks or months.
Techniques like marketing mix modeling or incrementality testing can help connect the dots.
Incrementality is essentially determining how much extra business an upper-funnel campaign drove that would not have happened otherwise.
You can test this by using holdout groups (e.g., show ads to 90% of your target audience but withhold them from 10% as a control, then compare behaviors), or by pausing campaigns and seeing if sales dip.
That means reporting beyond vanity metrics. For instance, instead of just saying, “Our video ad got 100,000 views,” translate that into, say, “Our brand lift study indicates an 8-point increase in awareness in our target market, which correlates with a 20% lift in branded search volume the following month.”
By connecting awareness metrics to leading indicators of sales, you make a case that those dollars are working hard.
And finally, adopt a test-and-learn approach.
If uncertainty is high, start by allocating a modest portion (say +5-10% shift) of your budget to upper-funnel campaigns for a period, then measure results.
If you can show that leads or branded searches grew, or cost per acquisition improved downstream, it will be easier to argue for maintaining or even increasing that allocation.
On the flip side, if an upper-funnel tactic isn’t performing, refine the creative or targeting rather than immediately cutting the budget, optimization is usually the answer, not abandonment, when it comes to new funnel initiatives.
Key Takeaways
Determining how much of your paid media budget to devote to the upper-funnel is a strategic decision that should be informed by both evidence and your unique context.
The data is clear that brand awareness and prospecting deserve a significant share of spend, even though many firms today allocate far less to it than they once did.
The exact figure will depend on your goals, industry, and growth stage, but the guiding principle is to invest enough in upper-funnel marketing to continually feed your future customer pipeline.
Underinvesting in awareness may boost short-term efficiency, but it eventually leads to stagnation and higher costs to reignite growth later.
In practice, this means making room in your plans for campaigns that build brand equity, engage new audiences, and create demand, even if they don’t convert immediately.
Whether it’s a YouTube video campaign reaching millions of potential customers, a series of TikTok ads riding the latest trend to put your brand on the map, or a broad Display campaign educating people about a problem your product solves, these efforts ensure your lower-funnel tactics have a steady stream of interested prospects to convert.
The upper-funnel and lower-funnel are interdependent; success comes from funding both appropriately and making them work in tandem.
So, how much of your budget should go to upper-funnel?
Enough that you’re confident you’re driving robust awareness and demand generation, not just scraping the bottom of the barrel.
For many, that will be a considerably larger portion than they currently allocate.
Aim for a balanced mix grounded in research and test data, adjust to your business needs, and then track the results.
With the right allocation, your paid media can both capture the immediate sales and expose your brand to new audiences, fueling both immediate performance and sustainable growth.
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Featured Image: Anton Vierietin/Shutterstock
