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More than Ever, It’s Time to Evaluate Non-Working Marketing Spend

February 18, 2021

After the remarkable events of 2020 and ongoing volatility and financial strain, marketers must once again do more with even less. Yes, marketers are learning to adapt and manage through a new normal, but the strain of having to do more with less continues in 2021.

Now is the time to make sure marketing operations are as efficient as possible.

What’s non-working spend?

As marketers know, costs fall into two categories:

  • Working spend: This is paid and managed media. It is the actual media buys or distribution costs used to deliver the message to the intended audience.
  • Non-working spend: The behind-the-scenes costs, what your customers don’t see, to create marketing and advertising. It’s the time and resources spent to plan and produce assets and content—software licenses, external agency fees and other in-house overhead costs.

When not optimized, non-working dollars can drag your ROI down. It’s the first place many CMOs look to make sure every marketing dollar is spent wisely.

Why does it matter?

In today’s digital world, when so much more content is needed, non-working spend eats up budgets. In the chart below, author Bob Gilbreath shared research from Exane BNP Paribas that shows higher non-working costs for newer media. Some can be attributed to disproportionately lower media costs. However, technology, process and people costs are also a drain.

It used to be easy to track efficiency. A common measure was the ratio of working media to non-working media. If those costs fell between 15% and 20% of an advertiser’s total spend, all was good.

Yet the chart above shows the explosion of channels, need for more content, and the use of specialty agencies has ballooned non-working costs. Some argue the working media ratios no longer apply. Others say that increased efficiency, asset management systems, offshoring, programmatic buying and other technology should keep costs down.

Ultimately, the focus should be on improving the overall ROI on your total marketing budget. Taking steps to manage hidden process inefficiencies and trim unnecessary expenses can significantly help.

Four areas to fuel operational efficiencies

There are a number of ways to eliminate wasted production costs. Not all are easy. You have to dig deep and review, challenge and make the right adjustments to your strategy, process, people and technology.

STRATEGY

Align initiatives. Siloed planning leads to sub-optimal use of assets, duplication of effort, rework and a fragmented customer experience. Be clear on customer and campaign goals, then loop in all teams, no matter what channels they specialize in, from the start.

Think “content” first. As digital channels multiply, internal or agency costs increase proportionately if your team is producing creative assets and content channel by channel. Adopt a content-first approach to streamline communication, eliminate handoffs and the need for multiple agencies. This increases speed, ups quality and ensures consistency.

PROCESS

Streamline workflows. Map your current processes and then optimize by eliminating redundant or unnecessary steps. This will also help minimize rework, which slows teams down, squeezes timelines and ultimately drives costs up.

PEOPLE

Decouple creative from production. It is important to keep talented marketers focused on high-value activities, such as brand building and creative strategy. You don’t want your marketers stuck in a quagmire of production tasks and redundancies. When evaluating marketing operations, look at creative operations and production separately to untangle brand-building activities from functional routines.

TECHNOLOGY

Automate workflow. Use templates and automate workflow steps that are repeatable. It is another opportunity to increase speed and reduce errors. Consider using a marketing-centric project management solution that can be personalized to fit your organization’s unique needs.

Evaluate tools and subscriptions. Workflow software and technology often promise more efficiency and lower non-working spend. This has to be evaluated. Are there tools your team isn’t using, or using effectively? Are expensive subscriptions going to waste? Do these tools create more creative churn? If so, can one tool replace many?

Centralize data and marketing assets. In an ideal world, creative assets, product information, marketing planning calendars, customer data and performance data are centrally managed and accessible to all users. The complexity of data and asset systems in most organizations makes this a prime area for not only cost savings and process optimization, but also improved market activation.


Don’t just measure marketing performance. Focus on efficiency and costs to increase profitability and marketing ROI.