The lower-funnel cycle of doom (and how to escape it)

Operating in a highly competitive retail environment with large stock volumes to move quickly often pushes omnichannel retailers towards a focus on short-term returns. Budgets skew heavily towards channels that appear to deliver immediate results, often at the expense of sustainable long-term growth.

This creates what we call the lower-funnel cycle of doom.

The cycle explained

The lower-funnel cycle of doom is self-reinforcing:

Focus on short-term returns. Competitive pressure and stock volumes push teams towards immediate results. Budgets skew towards channels that appear to deliver now.

Over-reliance on click-based attribution. To justify the short-term focus, teams rely on measurement models like GA4 that can only track sales through clicks. This creates a misleading performance view that validates the strategy.

Over-indexing on lower-funnel activities. Because click-based attribution undervalues upper-funnel and video content, budgets flow increasingly towards bottom-of-funnel tactics. Search, retargeting, and conversion campaigns absorb more spend.

Struggling for long-term growth. With insufficient investment in brand building and new customer acquisition, the addressable audience shrinks.

Back to focus on short-term returns. With growth stalling, pressure increases for immediate results. The cycle tightens.

The continuous optimisation of short-term metrics leads to an ever-shrinking customer pool due to insufficient investment in long-term brand building and new customer acquisition.

Fishing in a shrinking pond

“It’s like fishing in the same pond over and over: You go for strong, intense signals that people really want to buy. In order for brands to grow the size of that pond and to attract new customers into the fold, they need to do brand building.”

Rodrigo Aspillaga, Nest Senior Performance Director in WARC’s ‘Retail Media Radar: Ending the ROAS reliance’

Bottom-of-funnel marketing captures existing demand. It converts people who already know your brand, already want your product, already intend to buy. But it doesn’t create new demand.

When you only fish in the pond of existing intent, the pond doesn’t refill. Without brand building to attract new people into the fold, the pool slowly empties.

What BFCM 2024 revealed

Black Friday Cyber Monday exposes which strategies actually work. Nest’s data from BFCM 2024 showed a stark divide:

Brands leveraging full-funnel strategies were able to scale by 41% year-on-year whilst maintaining efficiency. They were better positioned to capture the heightened customer demand after building intent leading up to peak.

Brands focused solely on bottom-of-funnel were flat year-on-year. Spend even dipped below 2023 levels at times, as they lacked the headroom to reach new audiences. Relying too heavily on BOF limited growth and prevented reaching incremental customers.

The difference was strategy. Full-funnel brands had spent months building the audience they would later convert. BOF-only brands lacked the headroom to reach new audiences.

How to escape the cycle

Winning retailers are adopting a full-funnel strategy, with an appropriate mix of channels and balance between brand-building and driving short-term performance goals.

Fix the measurement

Click-based attribution is the engine that drives the cycle. It validates BOF spend and penalises upper-funnel investment.

Move to incrementality-based measurement. Marketing mix modelling, geo-lift tests, and multi-cell experiments can help uncover the true contribution of each channel. Geo-lift tests can isolate the incremental impact of digital marketing on both online and offline sales.

Rebalance the funnel

Full-funnel doesn’t mean abandoning bottom-of-funnel. It means investing appropriately across the entire customer journey.

Upper-funnel activity builds the audience. It introduces your brand to people who don’t know you yet. It creates the demand that lower-funnel will later capture.

Lower-funnel activity converts the audience. It captures the intent that upper-funnel created.

Both are necessary. Neither works alone.

Align objectives across the team

“The entire team including finance, marketing, brand, needs to be united, singing from the same hymn sheet. They all must understand the business’s core goal, the key performance indicators, and, most importantly, who the customer is.”

Lara Gibbs, Nest Senior Performance Director

Misaligned objectives lead to inefficient spending and a fragmented customer experience. If the online marketing team is solely focused on ecommerce sales while the in-store team aims for footfall, the business misses opportunities to direct the customer journey across all touchpoints.

Develop a North Star metric for marketing that reflects the overarching, omnichannel goals of the business. Ensure the objectives of your whole marketing team ladder up to achieving this goal.

Breaking the cycle with Nest

Nest helps omnichannel retailers escape the lower-funnel cycle of doom.

Measurement that reveals the truth. We implement incrementality testing that shows the real contribution of each channel, not the misleading view from click-based attribution.

Full-funnel strategy. We build strategies that balance short-term performance with long-term audience growth. Our BFCM data shows the difference: 41% growth for full-funnel brands versus flat performance for BOF-only.

Creative for every stage. Nest Creative AI produces creative at the volume full-funnel strategies demand. Upper-funnel content to build awareness. Lower-funnel content to convert. Human direction stays in control while systems handle scale.

Ready to escape the cycle? Get in touch

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