I’ve realized that chasing the perfect PPC budget split can be a never-ending task. Fixed budget ratios often struggle to withstand real-world scenarios, which is why I’ve learned to assess funnel health and adjust spending as market dynamics evolve.
Most PPC budget discussions revolve around balancing brand awareness with conversion-driven campaigns, but I’ve found that this is often not the ultimate goal.
In my experience, the ideal balance is subject to constant change, influenced by our business stage, market saturation, seasonality, competitive pressures, and revenue goals.
Yet, I’ve noticed that many teams treat funnel splits as fixed decisions—set it and forget it. While it might work today, it could be completely inappropriate in six months.
Budget conversations often lead to debates: should we reduce brand awareness spend since it doesn’t convert directly, or are we risking future pipeline issues if we only focus on conversions?
Both viewpoints have merit, which makes these decisions challenging for us.
The Lower Funnel Case is Simple
When I think about the lower funnel, Shopping, Performance Max, and high-intent Search come to mind.
A term like “buy running shoes new york” signifies a ready-to-purchase mindset. Shopping categorically showcases the right product, while PMax exploits the conversion signals across all Google surfaces. The attributions are clear, ROAS is apparent, and this delights the CFO.
But I understand that these campaigns only capitalize on existing demand—they don’t generate new demand. Each conversion is fed by awareness sparked elsewhere:
- A YouTube pre-roll.
- A friend’s endorsement.
- A social media post.
- Years of brand presence.
I feel like I’m just picking fruit from a tree I didn’t plant.
Search is unique as it serves both ends of the funnel. For instance, a query like “best running shoes for marathon training” is more informational.
The individual is investigating rather than purchasing. With AI Max and broad match expansion, Google Ads pushes Search campaigns deeper into this space, enabling Search to straddle both ends of the funnel based on its configuration and captured queries.
It’s something I regularly review: Is our Search spend closing existing demand, or are we engaging with prospects earlier in their journey?
This strategy holds until it falters, often with slow warnings of decline.
Branded search volumes may stagnate, CPCs soar for core terms, and new customer acquisition rates may plateau as retention remains stable—symptoms of a brand living off existing demand without revitalizing it.
Lower-funnel efficiency is real, yet it counters future growth.
Dig deeper: PPC budget planning: Aligning business goals, ad spend, and performance
The Reseller Trap in Lower Funnel
I’ve encountered issues quite specific to resellers and multi-brand ecommerce that don’t get enough attention.
If I sell branded products not owned by my organization, our lower funnel might perform well short-term.
Shopping and Search campaigns do wonders for established brands since brand owners have taken care of awareness. I’m simply reaping the demand built by major brands like Nike or Adidas.
Yet, I lack control over that demand. If a brand cuts back on marketing, exits the market, or loses relevance, our Shopping and Search performance suffers.
The ability to counter such shifts is hampered by the absent demand to harvest.
This predicament requires us to prioritize two strategic imperatives, something often overlooked.
- Own-brand expansion: Allowing us to retain control and invest in independent awareness.
- Enhancing reseller brand: By upping upper-funnel visibility, customers will recognize our name as a destination for all brands we offer.
Both strategies entail upper-funnel spending. Creating our brand necessitates campaigns to elevate product recognition. Building a reseller brand requires enduring efforts in Demand Gen, YouTube, and Display to ensure our brand is integral to the category, beyond individual brands. This applies beyond Google’s ecosystem.
Ultimately, these investments will not manifest in the short-term ROAS report but will signify next year’s resilience in business.
Upper Funnel as Inventory Management
I often see brand awareness spend as the uncertain, tough-to-quantify budget segment, earmarked for leftover funds. This perspective, however, is misplaced.
Investing in the upper funnel is about creating a pool of future converters. Every Demand Gen ad impression on YouTube or Google Display isn’t a wasted effort—it’s a potential high-intent search opportunity in coming weeks, nurturing the top of the funnel for Shopping and Search endeavors to reap later.
Google’s Demand Gen campaigns effectively highlight this throughout a single platform. I use Demand Gen to engage with audiences unfamiliar with our brand, then track Search impression shares and query volumes that surge in subsequent weeks. This lag is both tangible and trackable.
Upper-funnel spending impacts lower-funnel effectiveness the next month, not immediately. This delay prompts cuts when budgets shrink, causing impacts six to eight weeks later rather than instantly.
For effective demand management, I consider upper-funnel campaigns as pipeline investments. The central question isn’t “What is the ROAS on this campaign?” but rather “How much qualified demand is being generated for my Shopping and Search strategies to convert?”
Dig deeper: Paid media efficiency: How to cut waste and improve ROAS
Why Fixed Splits Fall Short
Fixed rules like the 70/30 or 60/40 I often see are merely broad averages seen across different businesses and contexts. They’re decent starting points but poor long-term strategies.
I must account for what affects the optimal split.
- Introducing a new product entails a robust upper-funnel effort given the minimal brand awareness.
- Even mature products in competitive fields require the same, due to shared high-intent search pools with rivals—expanding the pool is the only growth method.
- Seasonal ventures make it essential to complete upper-funnel efforts before peaks, as urgent awareness builds are ineffective in-season.
Conversely, when we face financial constraints or urgent revenue goals, patience for an eight-week upper-funnel maturation isn’t possible. In such cases, focusing on the lower funnel becomes necessary, accepting inevitable drawbacks while planning future awareness investments as pressures ease.
In essence, both choices are appropriate given context. A set split disregards context entirely.
Formulating a Dynamic Budget Split
Rather than adhering to fixed ratios, I advocate establishing criteria that trigger budget adjustments where needed.
Increase upper-funnel focus when:
- Branded search remains static or declines over quarters.
- New customer acquisition costs increase, while retention holds.
- We’re entering new markets or launching new products.
- Competitors significantly amplify brand presence.
- We’re nearing peak season with ample preparation time.
- Reselling top brands with dwindling search interest or decreased active marketing.
Emphasize the lower funnel when:
- Immediate revenue targets cannot wait.
- The upper-funnel campaigns begin showing measurable awareness, indicating readiness for conversion.
- Shopping or Search costs per acquisition fall below target, justifying scaling.
- Demand Gen audience reach saturates, indicating repetitive reach instead of expansion.
Within Google Ads, the necessary data for monitoring this is accessible without additional tools. Trends in branded query and impression share on non-branded terms, along with Demand Gen metrics and customer segmentation data, provide a comprehensive view of funnel health.
Consistent review is as critical as the metrics themselves. I aim for at least monthly funnel split reviews—quarterly rounds are often too infrequent. By the time quarterly evaluations reveal declining branded queries, vital pipeline time has already been lost.
The conversation on funnel balance isn’t typically a matter of analytics—it’s political.
In meetings, lower-funnel spending is easy to defend thanks to visible ROAS and conversion statistics. Conversely, arguing for upper-funnel spending involves creating narratives about future campaign efficacy—a trickier sell under pressure.
Rather than avoiding this justification, I focus on changing the evidence basis.
- Tracking branded search volumes as predictive indicators.
- Ploy a view integrating Demand Gen and Search conversions over time.
- Making lag times distinct, showing evident relationships.
Ultimately, budget allocation isn’t static but a reflection of growth strategies.
Choosing to optimize solely for current ROAS is one decision; investing in future demand drivers another.
For resellers, it also entails whether the business base is self-controlled or rented from brand owners with independent priorities.
I believe the best PPC ventures strike a balance, knowing strategically when to shift focus.
Dig deeper: How to optimize B2B PPC spend when budgets and confidence are low
Inspired by this post on Search Engine Land.
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