Solved: Funnel Structure Optimization for Home Furnishings

Hi there,

Thanks for reaching out! Happy to give you some initial thoughts on the funnel issues you're seeing with your home furnishings client. It's a really common problem, and honestly, the way most people think about funnels on platforms like Meta is a bit broken.

I've had a look at what you've described, and it sounds less like you have three separate stages fighting each other, and more like you're trying to force a structure that the algorithm doesn't really need anymore. My gut feeling is we can simplify this whole thing, get better results, and stop you pulling your hair out trying to balance budgets between stages that shouldn't be seperate in the first place.

We'll need to look at why your "TOFU" campaign is a trap...

Okay, let's get straight to it. The idea that you need a "Top of Funnel" campaign optimised for reach, video views, or engagement is one of the biggest myths in paid advertising today. You mentioned your TOFU videos have low CPM and high engagement. That sounds good on a report, but it's a vanity metric. It doesn't pay the bills, as you've discovered.

Here's the uncomfortable truth: when you tell Meta's algorithm to get you 'engagement' or 'reach', you're giving it a very specific command: "Find me the largest number of people for the lowest possible price." The algorithm is incredibly good at its job, so it does exactly that. It seeks out the users inside your target audience who are serial likers, sharers, and commenters—the ones who are least likely to ever click with intent, pull out a credit card, and actually buy something. Why? Because those users aren't in high demand from other advertisers who are optimising for sales. Their attention is cheap. You are literally paying Facebook to find you the worst possible audience for a home furnishings brand.

I remember one e-commerce client, they sold women's apparel, and came to us with the exact same problem. Loads of likes, lovely comments, huge video view counts. Their agency at the time was chuffed. But thier sales were flat. We switched off all their 'awareness' campaigns on day one. It felt scary for them, but it's the only way forward.

The best brand awareness you can get is a sale. Awareness is a byproduct of having a great product that solves a real problem, not a prerequisite for making a sale. You need to switch your campaign objective to 'Conversions' with the 'Purchase' event, even for your cold audiences. Yes, your CPM will go up. Your cost per click will probably increase too. But the quality of the person seeing and clicking your ad will be infinitly higher, because you've told the algorithm to find people who actually buy stuff online. It's a completely different instruction and it gets a completely different result.

I'd say you should collapse your funnel and simplify your account...

So, what does this mean for your TOFU/MOFU/BOFU budget allocation? You stop allocating it that way entirely. It's making your life more difficult and it's not how Meta's machine learning works best in 2024. You don't need to manually guide people from one stage to the next with different campaigns and budgets. The algorithm is smart enough to do that on its own if you give it the right goal and enough data.

Instead of three leaky buckets, I'd suggest a much simpler, more powerful structure with just two main campaigns:

1. One Prospecting Campaign (Cold Traffic)

• Objective: Conversions (optimised for Purchase).
• Budget: Put the vast majority of your spend here, maybe 70-80%. This is your engine for growth.
• Audiences: This is where you test. You'll have multiple ad sets, each testing a different high-potential audience. More on what those audiences should be in a moment.

2. One Retargeting Campaign (Warm/Hot Traffic)

• Objective: Conversions (optimised for Purchase). You can also use the Catalog Sales objective here.
• Budget: The remaining 20-30%.
• Audiences: You can group your MOFU and BOFU audiences together here. For example, one ad set for all website visitors in the last 30 days (excluding purchasers), and another ad set for people who Added to Cart or Initiated Checkout in the last 14 days (excluding purchasers). If your budget is small, you might even combine all of these into a single retargeting ad set to give the algorithm more data to work with.

This structure solves your budget allocation question. You're not manually setting proportions based on guesswork. You're allocating the majority of the budget to finding new customers, and a smaller, sufficient portion to closing the deal with those who have already shown interest. This also addresses your MOFU stability problem. By simplifying, you give the algorithm more data within each ad set, which leads to more stable performance. You're not spreading the data too thin across too many campaigns and ad sets.

You probably should focus on who you're targeting, not what funnel stage they're in...

Now, just changing your campaign structure isn't enough. The fact that you get high clicks but low conversions at the 'MOFU' stage tells me there's a disconnect between your ad and your audience's actual intent. You're getting curious people, not qualified buyers. This comes down to targeting.

You need to forget sterile, demographic-based profiles. "Women aged 30-55 who like interior design" is useless. It describes millions of people, most of whom are not in the market for new furniture right now. You need to define your Ideal Customer Profile (ICP) by their pain. What is the nightmare scenario that your furniture solves?

Is it the young professional who just moved into their first proper flat and is terrified of it looking like a student dorm? Their pain is embarrassment and a desire for a grown-up space. Is it the new parents who need durable, stylish furniture that can withstand a toddler? Their pain is a fear of wasting money on stuff that will get destroyed. Is it the empty-nesters finally re-doing their living room for themselves? Their pain is wanting a touch of luxury and comfort after years of practicality.

Each of these is a different person with a different pain. And you target them differently. For the young professional, you could target interests like 'first-time buyer', specific new-build apartment complexes (if possible), or followers of minimalist design influencers. For the new parents, interests like 'Pottery Barn Kids', 'Crate & Kids', or parenting blogs. Your ad copy and creative must speak directly to that pain. Don't sell a "well-crafted oak coffee table." Sell "the perfect coffee table that's tough enough for Lego castles and stylish enough for wine with friends after bedtime."

This is how you get quality clicks. You pre-qualify them with the ad itself. The person who clicks that ad is much more likely to convert than someone who clicked a generic ad showing a pretty room. I've seen this work time and time again. We had a client selling cleaning products. Their results were okay, but not great. We stopped targeting "people who like cleaning" and started targeting people based on life events - "new pet owners", "recently moved". We ran ads that spoke to the specific mess those events create. Their revenue increased by 190% because the message was so much more relevant.

You'll need an offer they can't ignore...

Even with the perfect targeting, people won't convert if the offer isn't compelling. The drop from click to 'add to cart' is often where the offer fails. The 'offer' isn't just your product and price. It's the entire value proposition at the point of decision.

Look at your product pages with brutal honesty. Why should someone buy from you, right now, instead of from one of your dozens of competitors?

• Risk Reversal: Do you have an obvious, hassle-free returns policy? Free shipping? A warranty? This is huge for high-ticket items like furniture that people are nervous to buy online.
• Urgency & Scarcity: Can you offer a first-time buyer discount? A limited-time bundle (e.g., "buy a sofa, get 20% off a matching rug")? This pushes people over the edge from browsing to buying.
• Social Proof: Are customer reviews and photos front and centre on the product page? People trust other people far more than they trust your marketing copy.
• Clarity & Value: Are the product descriptions clear? Do the photos show the furniture in a real home setting, not just a white void? Can customers easily see dimensions and materials? Any friction or unanswered question at this stage leads to a bounced visitor.

Your MOFU problem is a landing page and offer problem. You're paying to get people to the door (the click), but you're not convincing them to come inside (add to cart). Fix the experience on the page, and your conversion rate will improve naturally. A stronger call to action in the TOFU ad, as you tried, is good, but it's not enough if the destination doesn't seal the deal. You need to make buying feel like an obviously good, low-risk decision.

Let's talk about why your BOFU campaign collapses...

Finally, your BOFU (retargeting) campaign. You said it has good ROAS but collapses when you increase the budget. This is completely normal and expected. It's not something you've done wrong; it's just maths.

Your retargeting audience is, by definition, a small, finite group of people (e.g., everyone who added to cart in the last 7 days). Let's say that audience is 5,000 people. At a small budget, Meta can show your ads to the most likely converters within that group at a reasonable frequency. Your ROAS looks great.

But when you try to double or triple the budget, the algorithm has a problem. It can't find more people in that tiny audience. So, it does the only thing it can: it starts showing the ads to the same people over and over again. Your ad frequency skyrockets, people get banner blindness or just get annoyed, and your performance tanks. The audience becomes saturated.

The solution is not to keep forcing money into a small BOFU audience. The solution is to make the BOFU audience bigger by feeding it with more high-quality traffic from your prospecting campaign. By fixing your prospecting (using conversion objectives and pain-point targeting), you'll get more people viewing products and adding to cart. This grows your retargeting pool, which can then absorb a larger budget effectively.

This is also where understanding your numbers becomes critical. How much can you actually afford to spend to get a customer? Most businesses don't know this, so they get scared when their prospecting campaigns aren't immediately profitable. This is where calculating your Customer Lifetime Value (LTV) is so important.

Let's say your average customer spends £800 and your gross margin is 60%. If a customer buys from you, on average, 1.5 times over their lifetime, your LTV is (£800 * 0.60) * 1.5 = £720. A healthy business can often afford to spend up to a third of their LTV to acquire a customer. That means your target Customer Acquisition Cost (CAC) could be as high as £240. Suddenly, paying £50 or £100 for a purchase from a cold prospecting campaign doesn't look so bad, does it? It looks like a great investment because you know it will pay off over time.

Knowing this number frees you to invest properly in prospecting, which in turn solves your BOFU scaling problem. Use the calculator below to get a rough idea of your client's LTV. It will change how you think about your ad spend.

This is the main advice I have for you:

To summarise, the whole approach needs a rethink. Stop thinking in terms of TOFU/MOFU/BOFU and start thinking in terms of Prospecting vs. Retargeting, with a relentless focus on your offer, your creative, and your true customer pain points. The algorithm is a tool; you get out what you put in. Give it the right objective and the right inputs, and it will find your customers. Give it the wrong ones, and it will happily waste your money finding you fans who never buy.

I've detailed my main recommendations for you below:

This is a lot to take in, I know. It's a fundamental shift from how many marketers are taught to run ads. But this simplified, conversion-focused approach is what we see working for eCommerce brands right now. It trusts the algorithm to do its job and focuses your human effort on the things that matter most: strategy, creative, and the offer.

Trying to implement a change like this can be daunting, and getting the targeting and creative right requires experience and a lot of testing. It's not just about flipping a switch; it's about understanding the nuances of the platform and your specific audience.

If you feel like you or your client could use an expert eye to guide this process, we offer a completely free, no-obligation initial consultation. We could hop on a call, share screens, and I can walk you through your client's ad account to identify the biggest opportunities for improvement based on what we've discussed here. Sometimes a 20-minute look at the actual data is worth more than weeks of guessing.

Hope this helps!

Regards,

Team @ Lukas Holschuh