Opinion

The traditional marketing funnel is dead. All rise the marketing (hyper) loop

Video killed the radio star. Streaming is (slowly) killing network TV. And Gen Z is killing off the traditional linear marketing funnel. Adam Furness, managing director APAC at impact.com, looks at why that is.

There is nothing as constant as change. Video killed the radio star. Streaming is (slowly) killing network TV. And Gen Z is killing off the traditional linear marketing funnel.

Why?

Because media consumption habits are totally different to previous generations. In 2011, teenagers spent on average 75 minutes every day watching commercial TV. Today, according to figures from free-to-air lobby group FreeTV, they spend just 13 minutes – a whopping 83% decline.

Instead they are watching (often ad-free) streaming services and hanging out on social media. Whether it’s TikTok, Instagram, Snapchat, X or others, they’re not there just to connect with friends. Instead, social media platforms are also the place to go for entertainment, to read the news (according to the Australian Communications and Media Authority, in 2023, 46% of 18-24 year-olds nominated social media as their main source of news), to discover information, to connect with each other and to shop – did I mention, shop! – crucially (and as anyone with teenagers will attest) all of these activities are happening simultaneously.

This wholesale shift in media consumption and habits means marketers are having to re-evaluate the traditional marketing funnel.

Created way back in 1898 by Elias St. Elmo Lewis, the marketing funnel plots out a linear journey from awareness, interest, desire through to action.

However, in this era of social media and streaming powered by always-on smartphones, these four elements of the funnel can happen at lightning speed and within seconds of each other – not to mention the fact they have their own unique and preferred ways to discover new products and services.

Consequently, it looks much less like a funnel and more and more like a fast and furious loop – a hyperloop if you will. It’s a circular journey which has also expanded to include discovery, research, engagement, conversion, retention and advocacy.

Consumption, and purchase decisions, are no longer neatly driven and controlled by brands, who used to directly guide consumers through their path to purchase.

Let’s dig into what this means for marketers and why partnerships are helping brands navigate this new hyperloop.

Become part of the journey

Most people go online to search for one of three things: information, entertainment or connection. Brands are beginning to understand that to drive awareness, it’s preferable to become part of this online journey versus interrupting the journey with disruptive ads.

This typically means finding new ways to become present and relevant in the lives of consumers by becoming part of the information, entertainment or connection that people are searching for online.

Typically, partnering with a publisher, content creator, another (aligned) brand, influencer or community is the best way for brands to do this. For example, when July Luggage launched in the US, it formed content commerce-type partnerships (when a brand becomes part of the editorial narrative via reviews and shopping listicles etc.) with multiple lifestyle media such as Cosmopolitan, GQ, Vogue, Forbes and Fortune.

Further, as 16-34 year-olds are now more likely to visit a social network than a search engine when looking for information about a brand, partnering with content creators and influencers is critical. Indeed 64% of consumers globally make purchases based on an influencer’s recommendation at least some of the time.

Closing the gap between awareness and action

Shopability has become vitally important to consumers who, when they see what they want, want to purchase it NOW.

Consequently, social media platforms, and the content creators who inhabit them, are making it much easier for consumers to buy from them. Social commerce is on the rise, with innovations like Shopify for YouTube, ‘shop the look’ integrations, and more. Traditional publishing houses are also following suit with content commerce offers, including Newscorp’s Total Commerce Suite which allows its audience to complete a purchase inside video or text content without being moved off platform and Are Media’s announced intention to become an omnichannel content commerce company.

Media companies are therefore becoming more like retailers, whilst at the same time, retailers are diving into providing information and entertainment and becoming more like media companies.

For example, in Southeast Asia in particular, there’s been an explosion in live commerce where well known hosts (and increasingly AI hosts, which big brands including Jo Malone, Estee Lauder and L’Oreal used for last year’s Single’s Day shopping festival) provide hours of entertainment, as well as shopping opportunities. Similarly, TikTok Shop, yet to launch in Australia, has gained significant traction in markets like Singapore; a recent survey by Airwallex found that it was the most popular social platform for international online shopping amongst Singaporeans.

Building Community

We know from countless research studies that the latest generation of consumers want to feel like they are part of a community of like-minded people who share a bond and are all in the ‘know’. In fact, a recent survey found 92% of Gen Z consumers agree the community surrounding a brand impacts how they feel about the brand.

This is why we’re seeing more brands deepen their loyalty, rewards and benefits programs to create deeper relationships with their customers – often moving to ultimately turn loyal customers into brand ambassadors.

It is also important because advocacy, which means when customers share their experiences with your brand on social media or through word of mouth, is increasingly influencing new buyers to enter the “discovery” stage.

Booktopia is a great example of a brand that creates community and advocacy. It nurtures its relationships with brand ambassadors, influencers, authors, podcasters and content creators. Authors often have significant social reach so Booktopia’s Author Royalty Club rewards sales generated by their authors, tapping into strong literary tribes and communities.

Beauty brands are also adept at creating a sense of community around their products by tapping into niche spheres of influence. For example, beauty retailer Sephora has created Sephora Squad, a community of beauty connoisseurs, unique thinkers, fired-up enthusiasts, fearless creatives, and wildly curious experimenters from all backgrounds and audience sizes to drive awareness and sales.

Conclusion

As consumers navigate a landscape of endless choices and constant connectivity, marketers are tasked with keeping pace with the ‘everything, everywhere, all at once’ mindset.

To succeed, they must pivot towards preferred channels, foster online communities, and deliver seamless customer experiences from initial awareness to final purchase.

Fortunately, partnership management technology offers a solution, enabling brands to create, track and manage partnerships that get them closer to their customers. By embracing these tools, marketers can effectively feed the always-on marketing loop and stay ahead in the ever-evolving digital marketplace.

Adam Furness is managing director APAC at impact.com.

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