Bottom-of-funnel saturation means total revenue stops growing with spend, even while last-click revenue still looks strong. This matters because doubling spend on a bottom-funnel channel rarely doubles sales, yet brands fund it to protect that number. Without recognizing saturation, brands starve middle and upper-funnel channels of needed budget, even when those channels generate more revenue. This video explains why a deliberate drop in last-click revenue can signal a healthier funnel.
Why Bottom-of-Funnel Saturation Makes Last-Click Revenue a Dangerous KPI
Bottom-of-funnel saturation makes last-click revenue a dangerous KPI to protect, because a channel can be highly correlated with last-click revenue and still be incapable of generating proportionally more total sales, no matter how much more gets spent on it. In this video, John Wallace, CEO of LiftLab, frames the classic brand-versus-performance debate as really a question about which KPI a brand is willing to defend. Most brands still cling to last-click revenue, and the real test is whether they’re willing to sacrifice some of it to properly fund the middle and upper funnel.
Wallace is direct about the math: you cannot double spend on a large, saturated bottom-funnel channel and expect to double total sales. If that were possible, this wouldn’t be a hard problem to begin with. The harder, more useful move is deliberately cutting bottom-funnel spend, watching last-click revenue dip as expected, and redirecting that budget toward middle and upper-funnel channels that deliver real short and long-term value. Wallace argues brands should feel proud, not alarmed, watching last-click revenue fall in that scenario, because the metric that actually matters is total incremental revenue, measured directly in LiftLab experiments, regardless of what happens to the last-click number along the way.
In this video, you’ll learn:
Why clinging to last-click revenue often leads to perverse marketing decisions
How to identify when your bottom-of-funnel marketing channels are saturated
The long-term benefits of shifting budget toward middle and upper-funnel activities
Why you should view decreases in last-click revenue as a positive sign of healthy growth
How to use incremental revenue as the ultimate metric for forecasting success
TIME STAMPFull Video Transcript: Bottom-of-Funnel Saturation and Incremental Revenue Explained
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In this video, LiftLab CEO John Wallace explains why bottom-of-funnel saturation makes last-click revenue a misleading KPI, and why a drop in it can actually be good news.
[0:00 – 0:35] The Marketing Funnel Debate
Well, you know, we hear these terms like, are you building your brand or are you kind of focused on performance? Some people exchange that with, are you spending appropriately on top of funnel, or are you spending too much on bottom of funnel? To answer any of these questions, you need to think about the KPI that you’re using, and most often we’re still seeing brands clinging and clutching to their last click revenue. And so you need to ask yourself, if you’re a last click run P&L, are you willing to sacrifice last click revenue in order to appropriately fund the middle and upper funnel?
[0:35 – 1:17] The Limitation of Last Click Metrics
This is a debate that’s going on across organizations, across all of industry. I just find these last click numbers to sometimes lead brands to make perverse decisions. I’ll say it another way: how correlated is your last click revenue with your total revenue? I know for some of your big channels and very, very bottom of funnel channels, they’re highly correlated. But what that’s not telling you is, is that revenue saturated? If I put more money into that bottom of funnel, if I double down on it, I can tell you for sure that you cannot double the spend on any of your large bottom of funnel channels and double your total sales. If we could do that, we wouldn’t even really have to think very hard about this problem.
[1:17 – 2:29] Strategic Shift to Incremental Revenue
What you need to be able to recognize is that sometimes you need to cut the spend on the bottom of funnel, see a corresponding drop in last click revenue, in order to appropriately fund some of your middle and upper funnel channels. Those are going to help you both in the short run and in the long run. And so we’re very keen to help brands understand there are short-term benefits to upper funnel, and quantifying them gives them the confidence to spend on those channels appropriately. And they’re going to do it at the loss of some last click revenue. You ought to be proud and excited to see your last click revenue go down if, at the same time, you’re appropriately funding the middle and upper funnel. If you already know it’s pre-ordained that you’re going to have a decrease in last click revenue, let’s point at the appropriate KPI. Inside of a LiftLab experiment, we’re going to say, what’s the increase in total revenue that we observed? That’s our incremental revenue; that’s going to tell us whether we’re hitting our forecast or not. And it really doesn’t matter how much the last click revenue suffered; it’s, did our total revenue go up? And we measure that in LiftLab experiments all the time.
Key Lessons: Recognizing Bottom-of-Funnel Saturation Before It Costs Growth
The core lesson is that a metric can stay perfectly correlated with total revenue and still be actively telling you to overspend.
Performance paradox: Prioritizing last-click revenue can paradoxically limit total sales by starving the middle and upper funnel of necessary investment.
Channel saturation: Doubling spend on bottom-of-funnel channels is rarely effective because these platforms eventually hit a point of diminishing returns.
Metric alignment: Brands should focus on total incremental revenue generated from experiments rather than isolated last-click data to gauge true growth.
Strategic courage: Leadership must feel confident in cutting underperforming bottom-funnel spend to properly fund broader, more sustainable marketing strategies.
