Your funnel is a creative multiplier
A funnel acts as a creative multiplier that can dramatically improve the performance of the same creatives. By upgrading your funnel's conversion rate, average order value, or LTV, creatives that previously underperformed can become winners, making it easier to discover high-performing creative without necessarily creating better ads.
Summary
The speaker uses the metaphor of an ocean with boats to explain how funnels function as creative multipliers. Each creative is represented as a boat floating in the water (funnel), with the water level representing the funnel's performance threshold. In a basic funnel (Funnel A), if you test 10 creatives with a 10% win rate, only one creative rises above the performance threshold and becomes profitable.
When you upgrade to a better funnel (Funnel B) that has either higher conversion rates, better average order value, or superior lifetime value metrics, the entire performance baseline rises like a tide. This rising tide effect means that the exact same creatives that were underwater (unprofitable) in Funnel A now sit above the water level in Funnel B. The speaker demonstrates that this same set of three previously failing creatives now becomes winners simply by changing the funnel—not by creating new or better creatives.
The key argument is that funnel testing should receive equal attention to creative testing because it directly increases the velocity of discovering winning creatives. Rather than continuing to iterate on creatives when results are poor, the speaker suggests that the problem may actually be the funnel itself. Upgrading the funnel can make the process of finding winners significantly easier, effectively multiplying creative performance without requiring better ad creation.
Key Insights
- The speaker argues that identical creatives can be underwater (unprofitable) in one funnel but become winners in another funnel, demonstrating that funnel quality directly determines creative viability
- The speaker claims that upgrading a funnel's conversion rate, average order value, or lifetime value raises the performance baseline for all creatives simultaneously, like a rising tide
- The speaker states that funnel testing should be prioritized equally with creative testing because it accelerates the rate at which winning creatives can be discovered
- The speaker proposes that when creative testing yields no winners, the root cause is often a weak funnel rather than poor creative quality
- The speaker illustrates that with a 10% win rate in Funnel A, one out of ten creatives succeeds, but the same test pool in a superior Funnel B yields three winners without any creative changes
Topics
Transcript
[0:00] I like to say that your funnel is like the ocean. If you have two funnels that you're running, this is your little ocean and you got your little nice little boat. Each one of these boats is a creative. Not all of your boats are that good. Some of them are going to [ __ ] drown. Let's say you only have one winner, 10% win rate, one out of 10. Now, let's move on to funnel B. But now, the tide, it's not going to be rated at this level as funnel A. You know why? Cuz funnel B is better. It either converts people higher or has a higher average order value or higher LTV. So,…
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