The Blind Spots in Marketing Budgets: How Conventional Categories Are Holding You Back

Marketing budgets are often divided into broad categories such as "brand," "events," and "digital." While this may seem like a logical approach, it can create two major blind spots:

1. It obscures how spending is distributed across different stages of the customer journey.

2. It limits visibility into funnel-stage ROI, as departments are often held to a single ROI metric, rather than evaluating the full impact across the funnel.

Take the 'Paid' or 'Digital' category, for example. Budgets here might cover paid social and Google search, both of which can be aimed at vastly different goals—like top-of-funnel brand awareness and bottom-of-funnel conversions.

To truly understand where your marketing dollars are going, break down these broad categories and assess how much spend is allocated to top, mid, and bottom-of-funnel activities. When you tally these allocations across your entire budget, you might uncover surprising imbalances. It’s common to see heavier-than-expected investments in mid- and bottom-funnel activities.

Meanwhile, top-of-funnel efforts may be fragmented across multiple channels without a cohesive strategy. For example is your brand spend closely aligned to your top funnel Paid Search spend. And do they have a common ROI target?

The next logical question is, what’s the “right” funnel investment ratio? There’s no universal answer—it depends on factors like your company’s growth stage, competitive landscape, and market conditions. For example, if you're trying to disrupt a market or seeing declining ROI in your lower-funnel efforts, you may need to shift more budget to top-of-funnel awareness to stay visible, even if it doesn’t immediately yield high ROI.

While managing budgets by department still makes sense, it’s equally important to evaluate spend and ROI by funnel stage.