Save Money on Ads: Ways to Reduce Media Waste in Your Campaigns with Total Tools

Digital advertising is today's most dominant form of marketing, with businesses spending billions of dollars each year on it. However, a significant portion of this ad spend is wasted because of a variety of reasons like inaccurate targeting, bots and click fraud.

Ad spend wastage or budget wastage is when the money you spend on advertising doesn’t let you achieve your business objectives. This could happen if you are not able to reach your target audience, and communicate or engage with them through your advertising. According to a study by Next&Co in 2023, businesses waste around 40% of their digital ad budgets, a huge amount considering how much money is allocated to digital advertising.

Changing landscape

There are a number of reasons for this wastage.

The key reason is that the digital advertising landscape is constantly changing. Automation and AI are taking over, with very little visibility into what’s going on under the hood. For example, Google’s Performance Max campaigns are fully automated, with Google deciding on which ad format and variation of ad to show, whom to show the ad, where to show the ad from among its multitude of placement options, when to show the ad based on automated bidding algorithm, and sometimes going so far as automatically selecting the landing pages for the ad campaigns. All that we as advertisers have to do is provide ad assets to Google, share product feed, choose location targeting, suggest audiences, set up tracking and select a campaign goal, and decide on the campaign budget. Unfortunately, that means we advertisers don’t have visibility into exactly how Performance Max’s automated bidding algorithm and campaign’s complex AI works when crafting the ads, placing the bids, showing the ads and self-optimising the campaign, and only get surface-level insights into ad performance and triggered keywords.

The second reason is that ad fraud -- which has always existed in the digital ads ecosystem -- is becoming difficult to detect. Bots and other forms of non-human traffic have attained human-like intelligence like never before due to the advent of Generative AI, making it easier to mimic human behavior and subsequently inflating impressions and clicks, leading to budget wastage.

The third reason is that while there is a lot of data available on campaign performance like impressions, clicks and conversions; there is very little data that is meaningful i.e. data that provides valuable insights, because such data is not readily available. Hence, suboptimal decisions are made based on data that doesn’t show the true picture of what’s working and what’s not, resulting in wastage.

Lastly, the omnipresence of data privacy regulations and further tightening of data collection practices has only made the job of advertisers difficult with regard to maintaining budget efficacy.

In the ever-evolving world of digital advertising, optimizing ad budgets is paramount for businesses seeking maximum return on investment (ROI). The landscape of digital advertising has shifted dramatically, demanding a strategic approach to minimize wastage and increase the effectiveness of campaigns.

Techniques to Increase ROI

Before you look at ways to increase ROI from marketing, it’s incredibly imperative to know your audience and customers inside out. This means knowing who they are, what are their traits and characteristics, what they are interested in, and where you can find them. You can find this out through strategic customer research. This customer info lays the foundation for everything you do and can guide you further with your branding, positioning and also messaging. It’s a recipe of success as you tailor all the communications to the behaviors, needs and wants of your customers. In the long run, this customer-centricity will set you up well strategically, helping you kickstart your marketing from a strong base and tweak things to improve ROI later on.

Data tracking: Today’s campaigns rely on data to optimize performance. You also use the data to analyze the performance of campaigns. It is extremely important to tag and track the data accurately to see what is working and what is not, to optimize your campaigns and get the most out of your budget. For example, we at Total Tools have set up tracking for all the goals we want to measure for the company, right from customer loyalty for retention to transactions in the bottom of funnel to engagement goals in the middle of the funnel through to awareness goals top of the funnel.

Data-driven insights: With an abundance of data available on digital ad campaigns, through the use of data analytics, you can gain deeper insights into your audience's behaviors and purchase preferences. This allows you to optimise the campaigns, ensuring only those who are genuinely interested see your ads. Here at Total Tools, we routinely use ROAS (Return On Ad Spend) to determine the profitability of campaigns, which ultimately helps us determine which audiences are ready to purchase.

A/B Testing: Employ A/B testing to compare different ad formats and offers, ad creatives, headlines, calls to action, landing pages, audience segments, bidding strategies. This iterative process helps identify what resonates best with your audience, ultimately boosting engagement and sales. We have, in the past, run an A/B test to compare different bidding strategies like target ROAS and maximize conversion value to increase revenue from our existing campaigns, where maximize conversion value won by a large margin.

A/B testing or different ads for Ad Format Optimization

Source: Towards Data Science

Audience targeting: Refine your audience targeting by making sure your ads are only seen by people likely to be interested in what you offer. This can be done through a combination of geo-targeting, demographic targeting, interest targeting, behavioral targeting, psychographic targeting, retargeting and also using first party data. This way you avoid throwing things against the wall and hoping it sticks by only focusing on the people likely to be interested in your products. One way we, at Total Tools, have managed to achieve some great results and minimise wastage is by using our rich first party data to create many different audience segments and by creating custom audiences combining different types of targeting. For example, we use our first party audiences from our CRM i.e. Emarsys for retargeting across Google and Meta Ads and expand these audience, which has improved our ROAS and reduced our CAC (Customer Acquisition Cost) by double-digit percentage points. Similarly, we use our SEO and SEM keywords to create contextually-relevant audiences which we retarget via display and video ads. This has led to double-digit improvement in our view rate across campaigns.

Landing page optimisation: No matter how much you optimise the ads side of things, if the website experience -- after clicking through from the ad -- is poor, then your potential customer won’t purchase from your website or worse, will leave your website without engaging with it. Make sure your landing pages are aligned to your ads and your offering in terms of messaging and the products that you’re selling. The landing pages should also be optimized for conversions with the page speed, layout of the page, placements of buttons etc. already tested to ensure they offer a smooth, frictionless experience for your website visitors to turn into customers. Optimizing landing pages is critically important because if you’re spending a lot of money to drive people to the website and if they are not converting then that means all of the ad spend is going to waste.

Optimised Landing Page

Tips to Minimize Media Waste

Relevant targeting: Since targeting is fundamental to any paid digital campaign, getting the targeting right can hugely reduce media waste. This can include selecting the right demographics, interests, first party audience and keywords. At Total Tools, we double down on our core audience of tradesmen and tradeswomen in Australia by being in front of them when they are looking for a tool.

Frequency capping: Bombarding users with the same ad repeatedly can lead to annoyance in the short-term, ad fatigue in the mid term and a total dislike for a brand in the long term. Furthermore, it can also negatively impact your view rate and click-through rate causing a lot of budget wastage, or severely limit the reach of your campaign limiting its effectiveness. Hence, it’s important to implement frequency capping to limit the number of times an individual sees your ad. As a rule of thumb, it’s best to frequency cap ads for brands that with a high level of brand awareness at 1-2 per user per week and to 5-7 per user per week for brands with low level of brand awareness. However, every industry and brand is different, so I prefer using tools like Reach Planner to determine the ideal frequency for a given campaign objective (before diminishing returns kick in), and optimizing from there based on the results, over the lifetime of a campaign.

Negative keywords: In search advertising, negative keywords are vital to prevent your ads from appearing for irrelevant searches. Negative keywords can significantly reduce ad spend wastage on uninterested users. For example, adding brand terms can help you save significant amount of money if, those who were going to click on those ads were going to convert anyway and none of your competitors are bidding on your brand terms.

Negative placements: Negative placements are the negative keywords of display and video ads. And since the internet is made of trillions of websites/apps and YouTube channels, there are lots of placements that are irrelevant to your company offerings or outright unsafe for your brand. Negative placements also help you weed out any bots and avoid paying for ads that were never seen. Furthermore, after weeding out irrelevant sites you can then invest more in ad placements that are contextually relevant to the content that your customers are consuming, increasing your ad engagement and conversions. A comprehensive negative placement strategy can save you thousands of millions of dollars a month or more depending on the ad spend. Personally, at Total Tools I use a customised list of close to 100,000 known spammy websites, YouTube channels, apps and app category placements curated by Lunio, which has been incredibly effective for us in improving ad effectiveness and reducing budget wastage.

a) Standard inventory

b) Exclude ‘Sensitive content’,‘Content not yet labelled’, ‘Live streaming YouTube videos*’, ‘Below-the-fold and ‘Parked domains’

Click-fraud software and digital media verification platform: Finally, when all the above options are exhausted, a click-fraud software or a digital media verification platform can be incredibly powerful in driving incremental ad spend savings. These software and platforms are much more sophisticated allowing you to customize the setup to prevent your ads from showing up for a specific group of people (e.g. competitors) or in specific areas of certain websites to drive the highest deliverability. They are particularly helpful if you spend millions of dollars on digital advertising each month, making the platforms economically viable for you while helping you save every last advertising dollar and reinvest it.

Sealing the Leak on Media Wastage

• In the competitive landscape of digital advertising, preventing ad budget wastage is crucial for achieving substantial ROI.
• The winds of change in the industry brought on by automation, generative AI and Web 3.0 technologies are changing how advertising works and steps that can be taken to reduce media wastage.
• Automation and generative AI has made it a lot easier for us advertisers to drive efficiency by speeding things up and making it easier to detect and fix common ad fraud issues. However, at the same time it has also made bots and spammers a lot more sophisticated and coming up with new ways to commit ad fraud, meaning we have to be vigilant, adapt and be ahead of the curve to keep the ROI high.
• Likewise, decentralized ads ushered in by the advent of Web 3.0 are paving the way for a fraud-free and transparent ad mechanism giving more control to the advertisers by helping them connect with their audience. Of course, it’s not perfect and wil have it fair share of trust issues since it won’t be governed by a central entity.
• However, these technologies are still in their initial stages or yet to gain widespread use, so it will be some time before we completely change the way we go about driving advertising effectiveness.

The strategies outlined above emphasize the importance of adapting to the evolving digital ecosystem to ensure that every ad dollar is invested wisely. Ultimately, the goal is to create a seamless and engaging user experience, where ads are relevant, valuable, and aligned with consumer preferences while preventing the bots from interfering with your campaigns. As the digital advertising landscape evolves, the journey toward reducing ad budget wastage requires constant vigilance, adaptation, and a commitment to staying ahead of the curve.

In the meantime, by following these tips and techniques, you can reduce digital ad budget wastage and increase marketing ROI without having to resort to slashing the budgets. While slashing the budgets might save you some money on media spend, it can lead to dramatic revenue declines and ultimately negative ROI. By sealing the leak on media wastage instead, you can ensure that your marketing dollars are spent judicious and you continue drive growth for your company through advertising.