What would you do if you could reclaim ¼ of your working media budget? This is not a rhetorical question:

“At least 23% of the $88 billion spent annually by marketers on automated digital ad buying… on the open web is a waste” Association of National Advertisers.

What is your media budget for the year? What protections do you have in place to ensure that spend is being executed effectively?

“Next&Co’s annual Digital Media Wastage report revealed that $5.6 billion of digital ad spend was wasted in 2022. This represents 41% of overall digital ad spend.”

How much of that is going to working media? Of the money that makes it to working media, how much of it is wasted?

“AdParlor – conducted over 50 ‘deep dive’ audits into the effectiveness of large advertiser social media and display advertising. The summary finding was that those 50 companies were wasting – or spending highly inefficiently – between 12-80% of their social media budgets. Most companies wasted 20-50% of their social media spend.”

Media Waste is an inherent part of having a digital marketing program. The goal is not to reduce to 0, but to minimize acceptable margins.

This starts with defining what an acceptable media waste margin is.

JMDS has worked with hundreds of clients of all sizes over the past two decades and our team has seen these ranges fluctuate as new emerging channels and technologies come into play. Some of these channels and technologies bring new efficiencies and others bring new bloat.

In the last two years we’ve observed that the healthiest marketing programs are running close to 3% waste. Getting below 3% waste begins to cut into the ability to test, iterate and scale marketing.

Up to 8% marketing waste is what JMDS considers the top end of reasonable waste - between testing, loose targeting, legacy campaigns, and general challenges of marketing campaign management this is the holiday weight that can be easily shed with a new years resolution.

How can companies end up with the double digit wasted spend quoted in the articles above? The answer is multi-faceted.

Motive:

Marketing teams who are responsible for spending a budget are not incentivized to self-report media waste. In fact marketing teams and agencies are incentivized to hide and obscure media waste as it reflects poorly on the performance of the team responsible.

Having clear benchmarks of acceptable levels also provides teams clear guard rails to operate within.

Benefit:

Intentional media waste can actually provide a hidden benefit for marketing teams and agencies. By building in deliberate media waste to campaigns, an artificial lever is provided which can be flipped for controlled performance improvement within the program.

Furthermore, agencies that are billing on percent of spend under management are incentivized to spend every dollar regardless of ROI; This can cause misalignment between agencies and brands, all the same priorities but in different orders.

Political:

Marketing Analytics teams have a split allegiance in the company. They cannot accomplish their job without Marketing members instilling full trust in them. But that trust is difficult to maintain when discussing media waste or audits.

Analytics leadership may have a shaky alliance with Marketing leadership that causes a softening of reporting on waste and opportunity. Marketing analytics tends to end up as the mediator between Finance and Marketing and that is a very uncomfortable place to sit.

Solution:

Bringing in a 3rd party to assess and address can allow you to circumvent the defensive need to hide the media waste, benefits from finding and calling out the waste, and has no political allegiance to the individual organizations within the company.

So as you are looking across your business ask yourself; “What would I do if I could reclaim ¼ of my working media budget?” and then take action to make that a reality.