The traditional marketing funnel is collapsing into a full-funnel model. That’s the conclusion of MoffettNathanson Senior Analysts Robert Fishman and Michael Nathanson, and it is one in which platforms that integrate social, commerce, and entertainment are best positioned to capture and retain advertising dollars.
To that framework, Fishman and Nathanson add a critical fourth pillar: scale.
In a research note distributed on Monday to investors, Fishman and Nathanson state that the growth of digital advertising “continues to surprise even those of us who have tracked the industry for a long time.”
In 2015, digital accounted for just 25% of U.S. advertising. Today, it makes up 75% of the total. It’s a remarkable shift driven by multiple factors, including the steady reallocation of media budgets from traditional brand awareness campaigns toward hyper-targeted social media and intent-driven performance marketing via search and retail media.
However, Fishman and Nathanson state, “The strata of the traditional marketing funnel no longer fully explains the dynamics unfolding in today’s ad market. While it remains true that mid- and bottom-funnel channels continue to grow faster than the overall market, the distribution of that growth is increasingly uneven. The largest tech platforms are not just benefiting, they are pulling away from the pack.”
That could be more sobering news for broadcast media companies just developing their digital ad strategies, if at all.
In 2025, the top four digital advertising platforms in the U.S. — Google (Alphabet), Meta, Amazon, and TikTok — will command roughly 65% of total U.S. ad spend and over 75% of the digital advertising bucket. “Their gains are coming not only at the expense of top-of-funnel media but also from smaller players operating in the same mid- and bottom-funnel spaces,” the MoffettNathanson analysts note.
LINEAR TV LAMENT
If the broadcast media leader reading this hasn’t been totally soured by what Fishman and Nathanson state, the following declaration may do the trick: “Linear TV is in structural decline, and with it, much of classic brand advertising.”
Meanwhile, they note, consumer attention is shifting rapidly to Connected TV, transforming TV into a more full-funnel platform than it has ever been.
“Industry leaders including partners like Amazon Ads, The Trade Desk, and others are making measurable in progress in identity/targeting and tying Connected TV ad exposures to outcomes including purchase attribution,” Fishman and Nathanson write. “At the same time, Connected TV is democratizing TV advertising, allowing hundreds of thousands of SMBs to enter the space despite limited budgets.”
Fishman and Nathanson expect the funnel to continue “collapsing” toward performance channels, with middle and bottom-funnel (led by the top tech firms) advertising taking increasing share.
“Sports programming may remain a short-term anchor for top-of-funnel activity, but even that floor is likely to erode over time as live sports migrate to OTT platforms,” they declare.
Traditional TV “held up well” in Q1 2025, declining “just by 1.8%,” thanks to better Broadcast performance that can be attributed to sports, Fishman and Nathanson state.
Audio also declined by 1.8%, they add.
