5 Ways To Waste Your Marketing Budget
Tanel Vetik
Head of strategy
The hard truth is that most businesses don’t really do customer research, they don’t run A/B tests, and they have near zero awareness of what happens on their website after they pay Google and Meta for someone to visit their website through paid advertising.
It’s not because they don’t know it’s important to track these things, but because they don’t have the time to do everything themselves. If they have a marketing manager, then that person is likely as swamped with work or more than the business owner.
And it’s not because people in the business don’t know what they’re doing. It’s very often that marketing are told to get leads to bring in more sales but given very little to no budget for testing and research. All campaigns need to focus on sales because the chief revenue officer said so, or because the market is taking a downturn, and the business needs to protect its margins. It’s hardly the environment where someone can propose expenditure for research and testing that isn’t directly backed by revenue targets.
5 Ways To Waste Your Marketing Budget
Tanel Vetik
Head of strategy
The hard truth is that most businesses don’t really do customer research, they don’t run A/B tests, and they have near zero awareness of what happens on their website after they pay Google and Meta for someone to visit their website through paid advertising.
It’s not because they don’t know it’s important to track these things, but because they don’t have the time to do everything themselves. If they have a marketing manager, then that person is likely as swamped with work or more than the business owner.
And it’s not because people in the business don’t know what they’re doing. It’s very often that marketing are told to get leads to bring in more sales but given very little to no budget for testing and research. All campaigns need to focus on sales because the chief revenue officer said so, or because the market is taking a downturn, and the business needs to protect its margins. It’s hardly the environment where someone can propose expenditure for research and testing that isn’t directly backed by revenue targets.
The hard truth is that most businesses don’t really do customer research, they don’t run A/B tests, and they have near zero awareness of what happens on their website after they pay Google and Meta for someone to visit their website through paid advertising.
It’s not because they don’t know it’s important to track these things, but because they don’t have the time to do everything themselves. If they have a marketing manager, then that person is likely as swamped with work or more than the business owner.
And it’s not because people in the business don’t know what they’re doing. It’s very often that marketing are told to get leads to bring in more sales but given very little to no budget for testing and research. All campaigns need to focus on sales because the chief revenue officer said so, or because the market is taking a downturn, and the business needs to protect its margins. It’s hardly the environment where someone can propose expenditure for research and testing that isn’t directly backed by revenue targets.
Why are businesses wasting their marketing budgets?
It’s this fast-paced high stress environment where almost all improvement suggestions and experimental ideas get put on the backburner not because they are bad, but because they don’t promise immediate returns, And I’m not saying that you should instead start launching wild campaigns and test the most out of the box idea in the room. I’m saying there has to be a fixed amount in your marketing budget that allows for testing to make sure the business is keeping up with changes in the marketplace.
If you fail to keep up, then all you’ll soon notice that none of your campaigns deliver the same sort of results as they did, for some reason. And you have no idea why. It’s at that point where bozo agency owners start reaching out with wild promises of quick sales and leads, only to refuse you refund if it doesn’t work out.
Money just keeps flowing out of your business with very fluctuating returns on your investments. Stress keeps going up and you start thinking about exiting the business.
What we see other businesses do all the time
A lot of the time we see businesses running ads on certain platforms just because they saw a competitor do it in a way that looked nice. They immediately assumed it’s profitable and started mimicking it.
This may not always work out because your maybe your competitor heard on the radio that everyone is advertising on Google, so they launched some ads just in case. Or maybe their brother’s niece said they’re a dinosaur because the business is not on TikTok. You really don’t know unless you measure the data.
About half of the businesses we encounter don’t know what a UTM (Universal Tracking Modifier) tag is or use the graphs on Google Analytics 4. Once again, it’s not because they don’t think it’s important, but because they feel they don’t have the time to dive into it.
The bigger your business gets, the more inefficiencies there are. It’s not uncommon to see 500 leads sitting in the CRM (Customer Relationship Management) platform with the last interaction being a Christmas greeting from 5 years ago.
What can you do today to fix this in your business
The first thing I would start with is to really take the time to understand who your customer is, and why they even interact with your business. Not just what they want from you, but why have they chosen you not the other ten thousand competitors in your area. And then find out what can you do to get more of these customers.
Customer research and customer profiling
You need to have a clear customer profile to be able to build foundation for your sales and marketing funnels. Without this overview, you’ll never be able to standardize processes for efficiency, be able to confidently say what moves the money needle, and what gets you farther away from your targets.
Transparency is key, so take 2-3 hours every week to do this research. It’s tough at first but you’ll find tremendous clarity the more you spend time on this.
Marketing campaign A/B testing
Another thing you can do is launch A/B tests wherever possible. Marketing campaign visuals, advert copy, email headlines, advert targeting, bidding strategies, retargeting audiences, etc. Only run a maximum of 2 variants of one metric at a time, because you want to be able to clearly say which change makes the difference. Don’t test everything at once because you won’t be able to determine what works and what doesn’t.
Having clear marketing KPI metrics
Have clear KPI’s (Key Performance Indicators) that are backed by your marketing budget. This way you can quickly say what activity brings you closer to your growth targets and what you should stop doing. Always optimise for profitability.
Start doing these things and you’ll quickly notice how inefficiencies start disappearing, your Google Ads campaigns have higher ROAS (Return On Ad Spend) numbers, your social media campaigns get leads that don’t cost the Earth, and you can quickly identify changes in the marketplace. All this will potentially less effort than what you’re currently spending on trying to hold it all together.