Digital Marketing Funnel: Advertising Stages to Create ROI

on Blog May 10th, 2022

Online advertising campaigns can have different goals, but it’s difficult to track their performance without a digital marketing funnel. Marketing funnels are similar (and related) to sales funnels, but they provide a more comprehensive view of the customer journey. That said, developing a funnel can be an extensive process. While understanding this process can help you produce better results, hiring reliable digital marketing services can help make sure you’re headed in the direction of a successful campaign.

At Fannit, we’ve spent the last decade helping small businesses develop and implement online funnels.

In this article, we’ll go over the definition of a marketing funnel and discuss the different elements it contains. Additionally, we’ll share the importance of having a marketing funnel for your company and its stages as well as provide steps on building funnels for your business.

What Is a Digital Marketing Funnel?

A digital marketing funnel, also known as a digital funnel or digital marketing funnel, is a strategy designed to drive traffic, convert these users into leads, and transform these prospects into customers.

Depending on your digital marketing strategy objectives, you may be looking to send as much traffic as possible to a landing page or generate traffic to your social media marketing content.

The modern digital marketing funnel framework can be used at various levels of your marketing (and sales) strategy.

Your entire marketing blueprint should operate like a giant funnel made up of small versions, for example, conversion funnels.

We’ll go over the elements, stages, and instructions later in this piece, but it’s important to understand that the digital marketing funnel is a reflection of the actual sales funnel.


While digital marketers and salespeople may use their own versions, having prospects in your marketing funnel means that your sales pipeline is in good shape.

Also, remember these frameworks are shaped like a funnel because they are designed to attract a lot of visitors and filter out the ideal customers.

We’ll explore the relationship between your funnel and your marketing funnel in this post, but it’s important to understand that you’ll need to develop specific materials for each stage of your funnel.

You’ll also need to conduct target market research to unveil insights about your audience members and the customer life cycle as a whole.

The Elements of an Internet Marketing Funnel

How does a digital marketing funnel work? To answer this question, you need to understand the elements of a marketing funnel.

Funnel digital marketing is customizable. So, it’s possible for your funnel to have more or fewer stages than conventional models.

You’ll need to personalize the structure of your framework based on the specific goals you want to achieve.

If you’re relying on an old marketing funnel from a template, your best bet is to scrap it and create a new digital marketing funnel with digital marketing tactics tailored to your specific needs.

With the above in mind, there are usually three components that make up a marketing funnel.

These are the base, sources, and the funnel itself.

The Base

The basic understanding that a business has of its customers is the base or foundation of a marketing funnel.

You need to be aware of who your company is targeting, the issues they want to solve, how they look for solutions online, and how your product can help them.

With this information, you can develop the base of what will become your marketing funnel.

Digital Marketing Funnel (2)

The goal is to develop different approaches to engage customers at every stage of the decision-making process or buyer’s journey.

To achieve this, you’ll need to identify or create unique selling points for your company, develop an identity around this, and send a clear and concise message.

The Sources

As the name suggests, the traffic sources are the channels you use to drive new online customers to your content.

Businesses can use a huge collection of sources, all of which vary depending on your industry and objectives. However, in most cases, working with different sources will require three elements: a lead magnet, an amplification channel, and an event that allows for the conversion of prospects into actual leads.

Digital marketing is an umbrella term that covers all potential online promotion channels.

This includes search engine optimization or SEO, influencer marketing, organic social media marketing channels, paid advertising or PPC like Facebook Ads, content marketing, and email marketing, among many others.

Keep in mind that each channel will require a unique marketing strategy, personalized content, and of course, its own digital marketing funnel.

At this stage it’s also important to understand that you shouldn’t necessarily target all sources, even if you have the capacity.

The reason is that your target audience likely uses a set of specific channels. So, targeting other sources that your audience doesn’t normally use may result in wasted resources.

Don’t forget to invest in developing a plan for each one, like an email marketing strategy that lays out the blueprint of each email marketing campaign.

The Funnel Itself

Finally, the funnel.

The sources send traffic into your marketing funnel. In an effective funnel, prospects move down the different stages through content distributed in a variety of formats. This is a direct reflection of the sales funnel stages as well.

As they move down the funnel, prospects become qualified leads, and ultimately, customers.

Depending on the type of industry, the last step of the funnel involves either upselling, cross-selling, or retention content.

The structure of the marketing and sales funnel varies tremendously from one company to the next.

With that said, the general breakdown usually follows a similar structure to this:

  • The lead magnet: The lead magnet consists of content that attracts large volumes of traffic 
  • The booster: This content is designed to position your business as the leader within your industry and the clear choice above competitors 
  • The igniter: This type of content transforms the prospect into a lead or paying customer


Following the three distinct sections above, your conversion funnel can be divided into top, middle, and bottom.

Therefore, you’ll need to create specific content for the top of the funnel, middle of the funnel, and bottom of the funnel digital marketing strategies.

The Importance of Having Digital Marketing Funnel Strategies

Internet marketing is a great strategy for a variety of reasons, but one of the biggest ones is the fact that it’s cost-effective.

Now, the problem is that simply investing in digital marketing doesn’t mean you’ll get great results.

A digital advertising funnel allows you to get the most value for marketing investment.

For starters, the right funnel marketing strategy will help you gain a huge amount of insights into your audience.

Your funnel should be parallel to your buyer’s journey.

This allows you to see the elements that trigger positive interactions and lengthen the customer life cycle, which you can use to tailor your brand by instilling these into your message.

Furthermore, a marketing funnel strategy will help you identify the best channel for each stage of the buyer’s journey.

This, in turn, will help you get a higher return on income (ROI) on your online campaigns.

Digital Marketing Funnels Explained

As we covered briefly, digital marketing funnels are designed to attract visitors, filter ideal prospects, distribute relevant content, and nurture these users until they become leads or sales.

Additionally, the number of digital marketing funnel stages can change based on each company’s requirements.

In most cases, a digital marketing funnel works based on a three or five-stage design.

In this section, we will cover the conventional five-stage digital marketing funnel design.

Note that the three-stage design is a simplified version of the five-stage funnel, so it only follows stages one, three, and four.

1. Awareness

The reason why online funnels carry this name is because of the logic they follow. In the initial stages, the goal is to attract large groups of prospective customers.

These groups are narrowed down as they move along the funnel. The end result is a smaller group of clients or quality leads by your marketing team.

The first stage, which is located at the “top” of the funnel is awareness.

During this stage of the funnel, prospects are aware that they have an issue and are currently exploring their options. This is the first interaction that you have with your target audience, which is essential because it defines whether or not they enter your funnel altogether.

2. Interest

In the interest stage, prospects have narrowed down their options and are interested in your solution as one of the potential alternatives.

Here, you want to make sure that your business stands out as the clear-cut best alternative for every prospective customer.

3. Consideration

The middle of the funnel is known as the desire or consideration stage.

Here, prospects are actively searching for information about your business (as well as competitors!) so make sure that your content gets as much exposure as possible. At this point, you can consider these prospects as leads.

4. Decision

Now, it’s decision time. Leads have to decide whether they are going to opt for your solution or for a competitor.

Your content during the decision stage should be product or service-based, yet customer-centric. In other words, you want to improve your chances of closing sales without taking away any of the value you’ve given thus far.

The decision stage looks different for product and service-based companies because of the nature of each type of business. Not only this, you have to decide whether you want the decision stage to encompass the entire sales process or lead generation.

Generally speaking, if you offer a service or product with a high price tag, you should opt for leads. If you’re looking to generate small online transactions or app installations, then sales may be the best alternative.

5. Building Loyalty

The last stage is to build loyalty, which can either result in recurring business or additional sales, depending on what you’re looking for.

Modern businesses don’t only aim to complete a sale, but to delight customers. This practice increases the chances of both repeat sales as well as sales from references or recommendations.

Now, this stage is all about ensuring customer success. It’s the reason why some companies appoint account managers or success advisors.

Both of these play the same role — ensuring that loyal customers get the most value and employ all of the features or resources at their disposal.

ToFu, MoFu, and BoFu: The Sections of the Funnel

The stages listed in the section above are all different, but some of these can be categorized into the same section based on their purpose.

These are three distinct sections found in all digital funnels, which are the top of the funnel (ToFu), the middle of the funnel (MoFu), the and bottom of the funnel (BoFu).

ToFu content is designed to cast a wide net that attracts a large volume of users. The gist is to attract users who have a high chance of becoming verified prospects and leads.

That said, the materials for this section should be more general and informative than the rest of the other two sections. Therefore, the only stage that falls in the ToFu section is awareness, at least in our five-level model.

Digital Marketing Funnel (2)

Middle of the funnel or MoFu content is next. This stage works as the first filter that attempts to separate candidates from actual prospects.

Let’s say that your company offers local home repair services. In this case, your MoFu content should help narrow down your audience to homeowners and real estate firms in your service area.

Unlike ToFu content, middle of the funnel materials should discuss your products or goods as the prime solution to your audience’s immediate needs.

In addition to the content itself, the channels you choose are also important. Note that the stages that belong in this section are interest and consideration, both of which narrow down the audience in order to zero in on ideal candidates.

Finally, BoFu content is designed to generate conversions. This can mean transforming prospects into leads, qualified leads into customers, or other key actions.

For example, for home repair services, the best way to measure conversions would be to count the number of quotes and consultations generated.

As you can imagine, the last stages of the funnel belong to this section, which are decision and building loyalty.

What Does an Effective Marketing and Sales Funnel Look Like?

Digital marketing sales funnels are all about the buyer’s journey.

So, in order to understand how a successful funnel works, we need to look at it from this perspective.

For example, imagine if you’re a local ecommerce site that sells sustainable handmade products nationwide.

Say your target audience is men who are interested in original, sustainable accessories for everyday use.

To build a successful funnel, you should start by developing an SEO marketing strategy around a term like “men’s sustainable handmade accessories” and optimizing your landing pages for this keyword.

Here’s what the theoretical marketing and sales funnel journey may look like:

  1. Karl, who is located in your service area and interested in fashion, looks for “men’s sustainable handmade accessories” on Google, which means he’s in the awareness stage
  2. Search engines show a handful of companies at the top, including yours thanks to your good SEO, and this puts him in the interest stage
  3. During consideration, Karl then checks out a few sites including yours, which catches his eye because it’s intuitive and responsive (thanks again, SEO)
  4. He selects a few products, places them in the shopping cart, and decides to think about them, which means he’s on the brink of the decision stage
  5. Karl then receives an email prompting him to complete the sale, which he proceeds to do via the link furnished in the message, thus finalizing the decision stage after a little nudge
  6. The sale is completed, Karl joins the newsletter, and receives regular promotional emails which result in further sales, which is the final stage of the funnel for some businesses
  7. Depending on the extent of the buying journey, you also develop campaigns to transform Karl into a brand advocate and recurring customer

How to Create a Digital Marketing Funnel

Now that we covered the definition and shared a hypothetical example of a great framework, let’s go over the steps you need to take to create your own digital marketing funnel. Note that you should craft a tailored online funnel based on your company’s requirements.

We’ve put together six general steps below to help guide you, but take the time to personalize each one according to your goals and resources.

Create Awareness

The first thing you need to do is let your customers know that you’re an option and the only way to do this is to increase exposure and build awareness.

The key to successful brand awareness is to reach as many users as possible while ensuring that these visitors are potential candidates for becoming customers.

For example, if you’re a location-based local service company, this means ensuring that your local target market sees your message.

You’ll filter these users and figure out who’s a great candidate later on, but for the most part, you need to find hurdles that your solutions can solve for your local market.

Study Your Audience

While you build brand awareness, also take the time to study your audience.

Take cues from your awareness and exposure marketing strategy to identify what elements can potentially drive actions.

Following the last example we set, if you’re running a local service company, take note of what channels and content topics drive the most attention.

For example, you may notice that email marketing awareness campaigns get a better result than paid social advertising or that new installations generate a lot more attention than repair services.

Craft Tailored Content

Next, focus on crafting tailored content for your audience.

This can come in the form of texts, infographics, images, and other resources that will be distributed through a blog post (or series of articles), email sequences, paid ads, and other platforms.

Note that you shouldn’t create all of the content for your campaign at once, even if you have the resources.

The reason is that digital marketing campaigns need to be flexible in order to remain effective. To put it in perspective, your follow-up content will depend on how your audience reacts to your initial wave.

So, you should create the initial content you need and develop templates that simplify the crafting process later on.

Go Beyond Informing and Focus on Conversions

One of the major issues that companies face when creating content for their funnels is focusing too much on informing and placing too little attention on generating conversions.

Remember, users that have made it through the first two stages of the funnel are genuinely interested in your solutions.

They are looking for the most informative description that helps them make the best decisions, so don’t be afraid to cover your products or services in detail and offer readers the ability to get in touch with you at different stages.

Build Stronger Relationships Through Nurturing Content

New and existing customers alike go through several stages before making a purchase, regardless of the price of your product or service.

Instead of looking at purchases as a snap decision, you should consider the potential barriers that customers face before they finally decide to complete their purchases.

Once you have a clear understanding of these blockers, develop nurturing campaigns that help potential customers understand the value and benefits of your solutions.

This process doesn’t end after the sale is completed either.

Building a business-customer relationship can have a great impact on the number of leads generated every month.

You should create content campaigns that encourage customers to share their thoughts and use the information you use for both improving your offers as well as creating better marketing campaigns.

Retain or Upsell

By now you’ve probably heard this before, but it’s cheaper and easier to sell products to existing customers than to attract new clients off the street.

Customer retention is an even bigger deal for companies that offer subscription-based services as these recurring clients are more profitable and are easier to handle.

The last stage of your funnel should focus on getting recurring sales or retaining the same customers. It’s true that not all industries can follow this setup.

If this is the case for your business, you can also get creative and use the final stage to collect great reviews or encourage existing customers to share their content.

This can generate a potential new lead without costing so much as a quick email.

Digital Marketing Funnel Examples

Our how-to instructions and marketing funnel definition were based on the most common type of framework.

But, it’s important to understand that you can choose from a few different framework structures.

In addition to the conventional funnel covered in this article, some frameworks you can opt for include:

The Hourglass

The hourglass setup has ten different stages, six located at the top and four at the bottom of the funnel.

This framework has an hourglass shape because it follows the same structure as traditional funnels with an additional two to three steps in the end.

These steps, in theory, should nurture existing customers, make sure that they continue their subscription, and grow the client base from within.

The Loop

The loop framework gets its name from the fact that its stages repeat themselves over and over again.

This concept revolves around the idea of selling different products and services to the same customer. It works for a wide range of industries, including ecommerce, home services, and software.

The Micro-Moment Approach

Micro-moment funnel marketing is extremely difficult to master, but it can be very effective.

The idea is to focus on prospects that are at crucial points of their sale process and capitalize on these moments. Companies that focus on this type of funnel develop SEO campaigns with terms that include words like “I want”, for instance:

  • I want to buy…
  • I want to know…
  • I want to go…

Tips to Reach Prospects at Every Stage

While the marketing tactics may vary, digital funnels can help you prevent a predictable marketing machine.

Developing a customized plan is the only way to achieve sustained success with a funnel marketing strategy.

However, there are a few best practices that can, in most cases, increase your chances of success. These include:

  • Offer assistance around the clock
  • Make metrics-based decisions
  • Leverage innovative technologies (like Facebook marketing and other forms of social media channels)
  • Create target audiences, which are basically groups of customers you want to target
  • After you build brand awareness, flex your brand muscles!

Ready to Develop a Successful Digital Marketing Funnel? Contact Fannit Today

Crafting a digital marketing funnel for your business can take a significant amount of effort, but it can also yield great results. We hope that our article above allows you to build a superb funnel and get the most out of your marketing efforts.


Are you ready to develop an effective marketing funnel for your company? Our digital marketing agency is here to help. Get in touch with Fannit to book a consultation now.

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Neil Eneix

My brother Keith and I started Fannit in 2010 and have been very fortunate to work with a wonderful family of clients, watching their businesses grow through the power of digital marketing. At the office, I work with our clients on developing out their business strategy as well as nurturing our relationships. It’s amazing how much influence and power SEO and good content can have over a business’ health. Connect with me on LinkedIn >