Introduction
One of the most common questions I hear from founders, CMOs, and performance marketers is deceptively simple: how much of our paid media budget should go to the upper funnel? The confusion is understandable. Upper-funnel campaigns—awareness, reach, video views, and engagement—rarely show immediate conversions. In a world obsessed with ROAS, CPA, and last-click attribution, spending money on ads that don’t “convert” right away can feel risky.
However, this short-term thinking is precisely what limits long-term growth. Paid media is not just a sales engine; it’s a demand creation engine. If you only invest in bottom-funnel campaigns, you are essentially harvesting existing demand without replenishing it. Over time, this leads to audience fatigue, rising costs, shrinking conversion pools, and volatile performance.
Upper-funnel investment is what builds mental availability, brand recall, trust, and future intent. It ensures that when users finally enter the consideration or decision stage, your brand is already familiar, credible, and top-of-mind. The challenge isn’t whether to invest in the upper funnel—it’s how much to invest, and how to justify it to stakeholders who want immediate numbers.
There is no one-size-fits-all percentage, but there are proven frameworks, maturity-based benchmarks, and diagnostic signals that can help you decide the right allocation. In this article, I’ll break down how to think about upper-funnel budget allocation strategically, how it varies by business stage and category, and how to balance short-term performance with long-term brand growth—without wasting spend or flying blind.
1. Understanding the Role of the Upper Funnel in Paid Media
Upper-funnel paid media exists to create awareness and shape perception before intent is fully formed. This includes formats like video ads, reach campaigns, YouTube pre-rolls, Meta awareness ads, connected TV, and high-impact display. The goal here is not immediate conversion but memory creation. When executed well, upper-funnel advertising increases branded search, improves click-through rates on lower-funnel ads, and reduces cost per acquisition over time.
Many marketers underestimate this role because attribution models fail to credit it properly. Upper-funnel ads influence behavior indirectly. A user may see a video ad today, ignore it, then search for the brand two weeks later and convert through a branded search ad. In last-click reporting, the upper funnel looks useless—yet it was essential.
Think of the upper funnel as priming the market. It warms cold audiences, introduces your value proposition, and frames the problem you solve. Without this layer, your lower-funnel campaigns are forced to work harder, targeting only high-intent users who are already aware of alternatives. This creates intense competition and drives costs up.
Upper-funnel investment also protects brand equity. In crowded markets, the brands that consistently show up early in the user journey are perceived as leaders. Over time, this perception directly impacts pricing power, trust, and conversion efficiency. In short, the upper funnel doesn’t replace performance marketing—it multiplies its effectiveness.
2. The 60–30–10, 50–30–20, and Other Budget Frameworks Explained
You’ll often hear rules of thumb like 60% upper funnel, 30% mid funnel, and 10% lower funnel—or variations such as 50–30–20. These frameworks are not random; they are rooted in brand-building research and long-term growth studies. However, they are starting points, not strict rules.
For large, established brands with broad audiences, heavier upper-funnel investment makes sense. These brands benefit most from reach, frequency, and mental availability. For them, a 50–60% upper-funnel allocation is often sustainable and profitable over time.
For mid-sized or scaling brands, a more balanced approach—around 30–40% upper funnel—is common. This allows them to build awareness while still driving measurable performance. Startups and early-stage businesses, on the other hand, often allocate just 10–20% to the upper funnel initially, focusing on validation and revenue while gradually increasing brand spend as they scale.
The key mistake is copying someone else’s ratio without considering context. Budget size, category competition, purchase cycle length, and brand maturity all influence the ideal split. A SaaS brand with a long sales cycle needs more upper-funnel education than a low-cost D2C product with impulse purchases. Frameworks guide thinking—but strategy decides allocation.
3. How Brand Maturity Should Influence Upper-Funnel Spend
Brand maturity is one of the strongest indicators of how much you should invest in the upper funnel. If your brand is unknown, upper-funnel spend is not optional—it’s foundational. Without awareness, lower-funnel campaigns simply don’t have enough demand to capture.
Early-stage brands should focus upper-funnel spend on clear positioning and problem framing rather than polished storytelling. Educational videos, founder-led ads, and simple value propositions work better than expensive cinematic campaigns. The objective is clarity and recognition, not perfection.
As a brand grows, the role of the upper funnel shifts from introduction to reinforcement. At this stage, consistent presence matters more than aggressive reach spikes. Maintaining share of voice becomes critical, especially in competitive categories. Reducing upper-funnel spend too early often leads to performance decay that marketers misdiagnose as “platform issues.”
For mature brands, upper-funnel advertising is about defending category leadership. Even when performance channels are strong, cutting awareness budgets usually leads to higher CPAs within months. The smartest brands treat upper-funnel spend as a long-term asset, not a discretionary cost.
4. Signals That You’re Under-Investing in the Upper Funnel
Many teams don’t realize they’re under-investing in the upper funnel until performance starts slipping. Common warning signs include rising CPAs despite stable creatives, shrinking retargeting pools, declining branded search volume, and increased frequency on the same audiences.
Another signal is creative fatigue at the bottom of the funnel. If conversion ads stop working quickly, it’s often because the audience is already saturated. Upper-funnel campaigns refresh the system by introducing new users and recontextualizing the brand story.
You may also notice that new product launches struggle to gain traction. Without prior awareness and trust, even strong offers underperform. Upper-funnel spend creates the narrative runway needed for successful launches and promotions.
If your reporting shows that most conversions come from remarketing or branded search, that’s not a success story—it’s a dependency risk. Healthy accounts show a steady inflow of new, first-time users entering the funnel every month.
5. A Practical Way to Decide Your Upper-Funnel Allocation
Instead of asking “what percentage should we spend,” start by asking “what problem are we solving?” If growth has plateaued, awareness is likely the constraint. If conversions are inconsistent, trust and familiarity may be missing.
A practical approach is to start with 20–30% of your paid media budget in the upper funnel, measure impact on branded search, direct traffic, and assisted conversions, and then scale gradually. Look at trends over 60–90 days, not week-over-week results.
Use holdout tests, geo experiments, or platform lift studies wherever possible. These tools won’t give perfect answers, but they provide directional confidence. Most importantly, align stakeholders on expectations: upper-funnel spend is an investment in future efficiency, not an instant sales switch.
When done right, upper-funnel paid media lowers long-term acquisition costs, stabilizes growth, and makes every lower-funnel rupee work harder. The question is no longer can you afford to invest in the upper funnel?—it’s can you afford not to?
6. Upper Funnel vs. Performance: Why This Is Not an Either–Or Decision
One of the biggest misconceptions in paid media planning is that upper-funnel investment competes with performance marketing. In reality, they are deeply interdependent. Upper-funnel activity increases the efficiency of lower-funnel campaigns by improving brand familiarity, trust, and message comprehension. When users recognize your brand, they click more often, convert faster, and require fewer touchpoints.
Performance marketers often judge success in short windows—7, 14, or 30 days. Upper-funnel impact, however, compounds over longer cycles. This mismatch leads to underinvestment. The brands that win long-term are the ones that intentionally run both engines together: one to create demand, the other to capture it.
A helpful mental model is to treat the upper funnel as infrastructure. You don’t expect roads to generate toll revenue instantly, but without them, commerce collapses. Similarly, without consistent awareness and consideration-building, performance channels eventually hit a ceiling.
7. Category Competition and Its Impact on Budget Allocation
Your category dynamics should heavily influence upper-funnel spend. In low-competition or emerging categories, even modest awareness campaigns can dominate share of voice and deliver outsized returns. Here, 20–30% upper-funnel allocation can be highly effective.
In saturated categories—finance, edtech, SaaS, D2C staples—competition is fierce, and users are exposed to dozens of similar offers daily. In such environments, under-investing in the upper funnel is especially dangerous. Brands that disappear from awareness lose relevance quickly, even if their product is strong.
In competitive markets, allocating 35–50% of your budget to upper and mid-funnel activity is often necessary just to stay visible. This isn’t wasteful spending—it’s the cost of remaining mentally available in a noisy ecosystem.
8. How Upper-Funnel Spend Reduces Long-Term CAC
While upper-funnel ads may not show immediate conversions, their downstream impact on cost efficiency is measurable. Over time, brands that invest consistently in awareness often see lower CPCs, higher CTRs, and improved conversion rates across all channels—including search and remarketing.
Why does this happen? Because users who already recognize your brand require less persuasion. They trust your claims faster and experience less friction in decision-making. This reduces the number of impressions, clicks, and retargeting touches needed to convert them.
From a financial perspective, this means higher short-term blended CAC but lower long-term CAC stability. Brands that ignore the upper funnel often experience the opposite: initially low CACs that steadily rise as audiences saturate and fatigue sets in.
9. Measuring Upper-Funnel Success the Right Way
One reason upper-funnel budgets are cut is poor measurement. If you judge awareness campaigns using last-click ROAS, they will always look ineffective. Instead, success should be evaluated using proxy and assisted metrics.
Key indicators include growth in branded search volume, direct traffic trends, first-time website visitors, video completion rates, and engagement lift. Platform-level brand lift studies, geo experiments, and incrementality tests provide additional confidence when available.
The goal is not perfect attribution but directional clarity. When upper-funnel spend increases and downstream efficiency improves, you have your answer. Mature marketing teams optimize based on contribution, not just attribution.
10. Scaling Upper-Funnel Spend Without Wasting Budget
Scaling the upper funnel does not mean blindly increasing reach. Creative quality, message clarity, and audience relevance matter deeply. The most effective upper-funnel campaigns focus on a single, sharp idea: the problem you solve and why it matters.
Frequency control is equally important. Being remembered requires repetition, but overexposure creates annoyance. Smart teams monitor frequency, rotate creatives, and refresh narratives regularly to maintain effectiveness.
Start small, learn fast, and scale what works. Upper-funnel success is less about spending big and more about spending consistently and intelligently.
Conclusion
So, how much of your paid media budget should go to the upper funnel? The honest answer is: enough to continuously create future demand. For most growing businesses, this means 20–40%, adjusted by brand maturity, category competition, and growth goals. For established brands, it can go even higher.
What matters most is not the exact percentage but the mindset. Upper-funnel spend is not optional, experimental, or expendable—it is a growth lever. Brands that treat it as a long-term investment outperform those chasing only short-term efficiency.
If your paid media strategy feels increasingly fragile, expensive, or unpredictable, the problem is rarely the platform or the algorithm. More often, it’s a missing or underfunded upper funnel. Build demand today, and performance will follow tomorrow.
Disclaimer
This article is for educational and informational purposes only. Budget allocations may vary based on industry, geography, and business model. Always test and validate strategies based on your own data.