What is the Marketing Funnel? 🤔

What is the marketing funnel? Why is it important? 

You may already know about the ARR marketing funnel as a media buyer. But, if you’re not familiar with this term, you may not be fully aware of this framework and why we use it. This article is for you.

No matter what kind of business you have, it’s crucial to understand how to best engage with audiences throughout the different stages of the buying journey. Because they’re not all the same, it’s crucial to have a strategy for each stage so you can effectively scale your ads - and your business. 

How does the marketing funnel work?

The marketing funnel is split into Acquisition, Retargeting, and Retention, or ARR for short. Why do we segment our audiences this way? Because each audience is entirely different and requires specific attention. ARR segmentation is a proven and often-used marketing strategy that helps businesses take better control of their ad accounts and make tactical and effective decisions. 

Simply put, Acquisition is your brand awareness, Retargeting is your reminders to interested consumers, and Retention is your customer nurture.

Furthermore, this strategy helps you manage your budget effectively while nurturing each stage of your funnel with care and attention. These audiences vary greatly and require different tactics to achieve results.

Let’s go over the stages in more detail.

The Budget Optimization Strategy that Madgicx uses for managing Facebook Ads.

What are the Madgicx funnel stages?

The Acquisition stage is broken down further into Prospecting and Re-Engagement. We do this to segment your first-touch awareness ad activities from your second and third-touch marketing. While these audiences are both considered “cold audiences,” their tactics, goals, and ad types are different, and that is why we split them up. 

To ensure a steady stream of new potential customers, having both types of Acquisition stages in place is essential. By setting up this targeting correctly, you'll be able to improve the performance of your account more quickly  🙌🤑

Note: When creating Acquisition audiences in Madgicx, there is an automatic exclusion of non-acquisition of:

  • 30 Days Website Visitors
  • 180 Days Purchasers 

Let’s go through these four funnel stages.

View of the Targeting Insights Across the Full Funnel widget in the Madgicx app. This shows Acquisition Prospecting and Acquisition Reengagement.

​​📣 Acquisition Prospecting

Where: Top of funnel

Who: People who don't know about your brand and who you are trying to reach for the first time. Your goal at this point is to introduce them to your brand. This is your largest and broadest audience because it includes anyone who might be interested in your product based on your market segment. The ads targeting this audience are your cold calls.

Recommended budget allocation: 60%

Tactic: Introduce your brand and generate awareness of your offer to a broad audience to find as many potential customers as possible.

🤗 Acquisition Re-Engagement 

Where: Middle of funnel below Prospecting and above Retargeting

Who: People who have had at least one touch with your brand but didn't reach your site. These people may have interacted with your social pages or ads. You want to entice them to go to your website and browse your products. 

Recommended budget allocation: 20%

Tactic: Utilize the Meta system to target people who have shown interest in your brand on Meta's platforms.

View of the Retargeting and Retention stages in the Targeting Insights Across the Full Funnel widget in the Madgicx app.

🪝 Retargeting

Where: Middle of the funnel

Who: People who have been to your site and engaged with your brand. This audience includes your website visitors and your high-intent visitors. They’re already most of the way through the funnel, so you want to help them complete a purchase and become your customers.

Recommended budget allocation: 15%

Tactic: Use the Meta Pixel to track website actions and user intent.

❤️ Retention

Where: Bottom of the funnel

Who: Your customers! People who have bought from you before- you want them to continue buying from you.

Recommended budget allocation: 5%

Tactic: Target your email list and people who’ve purchased on your website to promote new purchases, thereby increasing the lifetime value of your customers.

The Madgicx Full Funnel Targeting Strategy ✨

We’ve crafted this strategy, which has been our go-to for years, and perfected it over time. We use it because it works and encourage you to use it. 

Our budget strategy is to put the bulk of our ad spend into our Acquisition Prospecting campaigns and ad sets.

This is because Acquisition is where it’s at. First and foremost, you want to reach new potential customers - and the only way to do that is through Acquisition. 

One of the biggest challenges that businesses face is attracting these new customers. Anyone will tell you that getting new clients is a numbers game. At Madgicx, we want to help you work around this challenge, and our experts have crunched the numbers so you don’t have to. You improve your chances of getting new customers by allocating 60% of your ad budget to Acquisition Prospecting. 

To build a full-funnel strategy,  we suggest you allocate about 20% of your budget to Acquisition Re-Engagement and 15% to Retargeting. 

Finally, we recommend you allocate approximately 5% of your budget toward Retention. 

Retention is critical, as you want to stay relevant to your customers; however, as this is the narrowest audience of the funnel, we allocate the smallest budget. We want to keep in contact with our customers, but we don’t want to spend more on retention than we would spend on acquiring new customers.

However, if you are a Saas or lead generation business, you wouldn’t need the Retention stage and can reallocate the budget elsewhere. Remember, every ad account and business is unique, and there are no hard and fast rules. It’s essential to test your account to find the budget that delivers results. 

Get in touch with our Success team if you need help setting up your funnel optimally 🤓

Why does Acquisition need 80% of the ad budget?

While this may seem like a lot, how else will you get a steady flow of new potential customers to your store? The truth is that people won't buy from you if they don't know about you! 

Just as the audience doesn't know you, you don't know the audience either. Think of these ads as newspaper advertisements and classified listings from days gone by. Usually, people need to get to know you and feel familiar with you before they’re ready to buy. 

So, gaining new customers happens once people are familiar with you, and that's why you need to test different audiences and ads until you discover what works. And as you can imagine, these experiments cost money. Hence, we suggest you allocate the bulk of your budget to Acquisition. This funnel stage is where you test the most.

How do I launch a new audience for my marketing funnel?

Madgicx has created over 100+ prebuilt audiences for you to launch a full-funnel strategy in just a few clicks.

Go to Audience Launcher, choose the funnel stage for which you would like to create an audience, and make your selection from the preconfigured Madgicx audiences on the screen.

The Audience Launcher screen in the Madgicx app where you can browse preset audiences for all funnel stages..

Then, you must choose where to launch your new audience. You can use the Madgicx Optimized Structure, select an existing campaign, or create a new one. Hit the blue ‘Next’ button when you’re ready.

View of the Madgicx Audience Launcher where you choose where your new campaign should go on Facebook Ads Manager.

Now, select which creatives you’d like to use. First, choose where to find the creatives you want to use in the red block below. Then, you can select the creative elements from the cards shown below. Click ‘Save Changes’.

‍

The screen in the Madgicx Audience Launcher where you choose the creative elements for each of the audiences you are launching.

Choose your location and other audience settings on the next screen. These include your device, platform, placement settings, recency, lookalike %, budget, conversion type, and audience demographics. Click ‘Save Changes’.

The Set up the Audiences screen in the Madgicx app where you can define the audience tools and settings you will use in your campaign.n

And you’re done. 

Go forth and build your funnel! Be sure to contact our Success team if you need any assistance. 

Related lessons

Show all lessons
No items found.

Didn't find what you were looking for?

Try our FAQ

Check out the answers to our most frequently asked questions. If you can’t find the answer there, you’ll be able to contact our support team.