With the size of Marketing’s spend, a few percentage points in either direction — toward efficiency or waste — can translate to millions of dollars saved or burned. Back in the bad old days of advertising, when expense account money flowed like wine, agencies would spend the GDP of Micronesia just to throw the Pets.com sock puppet against the wall and see if it stuck. Not any more. Today, with so much data and so much ability to track the impact of every piece of your marketing strategy, inefficiency is inexcusable. Time for a primer on ferreting out and reducing waste.
Types of Waste
Assuming that you have a good product/service and a decent marketing strategy, then it becomes all about execution, and that is where the costs stack up — for people, media, technology and third party services. In a perfect world, headcount and third-party costs would be minimized, allowing you to spend the bulk of your budget on content creation and media. That media spend would then be so perfectly targeted that every single ad seen would have a positive effect on your brand and sales. Then, to complete this picture of nirvana, the marketing campaign would energize your customers so much, that the campaign would go viral, driving loads of free love, brand awareness, purchase intent and sales.
Although worth striving for, this hardly ever happens. However, if you keep the creative juices flowing, challenging (and measuring) everything, and eliminating waste, you can get much closer every time.
The four main forms of waste and inefficiency in advertising are as follows:
1. Content production costs are too high
2. Fraudulent or low value ads that deliver zero value
3. Excessive ecosystem players and their margins
4. “Set and Forget” campaigns that are not optimized
Let’s dig into those one-by-one: