New Research: Only 40% of Your Marketing Budget is Wasted

2 Jun

Yes. Yes. Yes. We’ve all heard too many times the old adage that 50% of all marketing budgets are wasted. But now there is good news: new research shows that only 40% of the average marketing budget is wasted.

According to Advertising Age, new research concludes that “despite six years of obsessive investment in big data, marketing-mix models and other analytic tools, marketers are getting worse, not better, at directing their dollars.”

The research, included in a new book by Rex Briggs, argues that marketers focus too much on driving awareness and not enough on driving advocacy. In a world of social media, it’s never been more important to drive advocacy.

It also asserts that most modern media mix models do not reflect the complexity of the modern media world. As a result, advertisers over-invest in TV and price promotion and systematically underinvest in  social media. Recent analysis by Mary Meeker also suggests that this may be true: that print advertising in particular receives too much spend while social and mobile receive too little.

According to the analysis, “the underinvestment he finds in social media doesn’t broadly extend to digital. Since 2006, return on investment from branded-content efforts has skyrocketed, even as ROI from digital advertising has been flat to slightly down, despite a steady drop in digital ad prices. A big reason for the latter two trends has been publishers placing more ads and clutter on web pages, which he said has increased revenue per page but eroded impact and CPMs.”

One Response to “New Research: Only 40% of Your Marketing Budget is Wasted”

  1. Marzipan and Marmite June 2, 2012 at 5:53 pm #

    I think that one of the reasons for the relative lack of spending in social is the difficulty regarding measuring its ROI/success, and as for TV – I still believe most marketing teams simply love to see their product on screen, even if most consumers go for the remote…!

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