What are the different stages of a marketing funnel?

If you have ever handed an agency a paid media budget and watched it disappear into a black hole of impressions and click-through rates that never quite translate into customers, there is a decent chance the problem was not the targeting, the copy, or even the budget. The problem was that everything was pointed at the wrong stage of the funnel.

TOFU, MOFU, and BOFU are not just marketing jargon to impress people in meetings. They are the framework that separates paid campaigns that actually build pipeline from ones that just look busy on a dashboard.

Here is what each one means, why it matters for B2B SaaS specifically, and how to think about your budget allocation across all three.

What the funnel stages actually mean

Before we get into tactics, it is worth being clear on what we are talking about, because these terms get used loosely and that causes problems.

TOFU (Top of Funnel) is awareness. These are people who have the problem you solve but do not yet know you exist, or are only vaguely aware of you. They are not searching for your product. They are not ready to book a demo. They are scrolling LinkedIn, reading industry content, or trying to figure out why their current process keeps breaking. Your job at TOFU is to get in front of them in a way that is relevant and useful, not salesy.

MOFU (Middle of Funnel) is consideration. These people know the problem exists, they are actively looking for solutions, and they are evaluating their options. They might have visited your site once, downloaded a resource, or searched for comparisons between you and a competitor. They are warming up. Your job at MOFU is to give them the information and confidence they need to take the next step.

BOFU (Bottom of Funnel) is decision. These people are close. They have done their research, they know roughly what they want, and they are deciding between a shortlist of options that probably includes you. Your job at BOFU is to remove doubt, reduce friction, and make it very easy for them to say yes.

Why B2B SaaS teams get this wrong

Most paid campaigns we see when we audit a new client have the same problem. Every pound is pointed at the bottom of the funnel.

That is understandable. BOFU feels safe. You are going after people who are already searching for what you sell, which means the intent is there and the logic feels sound. The trouble is that by the time someone is at BOFU, they have already made a large part of their decision. If your brand was absent during TOFU and MOFU, you are playing catch-up on a shortlist that was probably already forming without you.

B2B SaaS buying cycles are long. The average deal involves multiple stakeholders and can take weeks or months from first awareness to contract. If you only show up at the bottom, you are fighting for a seat at a table where the other guests arrived before you.

There is also a cost problem. BOFU keywords and audiences are the most competitive and the most expensive. Going all-in there with no TOFU or MOFU support means you are paying a premium to compete for a small pool of buyers, rather than building a broader pipeline that feeds the funnel from the top.

What good looks like at each stage

TOFU: earning attention, not demanding it

At the top of the funnel, the goal is relevance over conversion. People here are not ready to buy, and trying to force them towards a demo request is a waste of spend and a fast way to damage your brand perception.

Good TOFU paid activity looks like LinkedIn thought leadership ads that speak directly to the pain your audience is living with. It looks like promoted content; a guide, a data report, a framework and that gives something genuinely useful without asking for much in return. The metric you care about here is not cost per acquisition. It is quality of engagement and the size of the audience you are building for the stages that follow.

Platforms: LinkedIn, programmatic display, YouTube pre-roll for the right audiences.

MOFU: being present when they go looking

Middle of funnel is where intent starts to show itself, and where a lot of budget gets wasted on audiences that are not quite as warm as they appear.

This is your retargeting layer. People who visited your site but did not convert. People who engaged with your TOFU content. People searching for category-level terms like "best SaaS onboarding tools" or "alternatives to [competitor]". They are researching, not deciding, so the content you serve them needs to match that mindset.

Case studies work well here. Comparison content works well. Webinars and demos work well, as long as they are positioned as informative rather than a hard sell. The friction should be low and the value should be obvious.

Platforms: Google Search (broader, informational keywords), LinkedIn retargeting, email nurture sequences running in parallel.

BOFU: removing the last obstacles

Bottom of funnel is where you earn the right to be direct. These people know you. They are weighing up their options. Your paid activity at this stage should be focused, tight, and built around removing the specific objections that stop people signing.

That means strong conversion-focused landing pages. It means retargeting people who visited your pricing page but did not book a demo. It means bid aggressively on your own brand terms so competitors cannot pinch your traffic at the final moment. It means testimonials, trust signals, and a clear, frictionless next step.

This is also where offer-led ads can work. A free trial extension, a limited onboarding package, a one-to-one strategy call. Not a discount, which devalues your product, but a reduction in risk.

Platforms: Google Search (branded and high-intent terms), LinkedIn retargeting, review platforms like G2 and Capterra.

How to think about budget allocation

There is no universal rule here, and anyone who gives you a precise percentage split without understanding your business is guessing. That said, a common mistake is spending 80 to 90 per cent of budget at BOFU and treating TOFU as optional.

A more considered starting point for a B2B SaaS company with a reasonably healthy brand presence might look something like this:

TOFU: 30 to 40 per cent. Building the audience that will feed the rest of the funnel over time.

MOFU: 30 to 35 per cent. Nurturing the people who are already aware of you but have not committed.

BOFU: 25 to 35 per cent. Converting the people who are ready, without overpaying for a small pool.

If your brand is very early stage and few people know you exist, you weight TOFU more heavily. If you have strong organic visibility and good brand awareness already, you can afford to lean into MOFU and BOFU. The point is that all three need budget and attention, not just the stage that feels closest to revenue.

The part most people miss

Running TOFU, MOFU, and BOFU campaigns is not enough on its own. The real value comes from building them as a connected system rather than three separate campaigns that happen to run at the same time.

Someone who engages with a TOFU LinkedIn ad should move into your MOFU retargeting audience. Someone who downloads a MOFU guide should trigger a different email sequence to someone who just visited your homepage. Someone who visits your pricing page twice should see a BOFU ad with a very specific message about the objection they are most likely sitting on.

When the funnel is joined up, your cost per acquisition goes down, your conversion rates go up, and the quality of your pipeline improves because you have been building relationships throughout the buyer journey rather than showing up cold at the point of decision.

Where to start if your funnel is all over the place

If you are not sure where your paid activity currently sits, start with an honest audit. Look at where your budget is going and ask what stage of awareness that audience is actually at. Then look at your conversion data and work backwards. Where are people dropping out? That is usually where a funnel stage is missing or underserved.

If you would like a second opinion, we do free funnel audits and paid media is always part of the picture. Get in touch and we will take a look.