5 Controversial Ways to Save Money

As the year comes to a close, CFO’s around the globe will be asking all departments to tighten their purse strings, while department heads around the globe will be looking for more budget to help them grow.

As a Growth Agency focused on profitable growth, we’ve seen brands throw unnecessary marketing dollars down the drain. Here are 5 of the more controversial money saving tips we’ve made this year, which should be considered by all marketing departments for 2024:

1. Reign in your brand spend if it’s proving too costly
2. Question what is in the Performance Max black box
3. Critique your Meta platform data
4. Reduce bottom and middle of funnel affiliate commissions
5. Run regular tech stack audits, and cut the fat

Brand Spend

There is a strong belief in the Paid Search Community that brands need to have an impression share of more than 90% for their brand terms, and have an absolute top of page position of over 50%.

Paid Search Managers unnecessarily deploy target impression share bidding methodologies, and defend their actions with a subjective view that “competitors will steal our customers.”

While not running brand may allow competitors (including Amazon 😠) hi-jack some clicks, the likelihood is that the user will will find you anyway. 

People should start thinking about brand campaigns in terms of incremental costs. Back of envelope maths: If your brand CPA is $20, but 80% of people were going to buy anyway (SEO, Direct, via A Review Site), the incremental CPA is 5 times higher than the platform is recording.

Performance Max

Another common strategy of Paid Search Managers in 2023 has been to increase the proportion of their budget going into Performance Max Campaigns.

The results are usually very good, and somewhere in between the CPA for brand and non-brand campaigns.

Of course, businesses are not calculating what proportion of their PMAX campaign is brand terms, OR, people who have recently abandoned their checkout, or are at another high intent / likely to convert anyway stage of the funnel.

What happens is people see the initial positive results, press the scale button (this isn’t a real button) and wonder what went wrong when the performance drops with scale.

Before scaling a PMAX campaign, decide if you are negating out brand terms, and try to determine how incremental these sales really are.

Meta Platform Data

An oldie but a classic. If you are judging success of meta campaigns purely on the platform numbers, you will allocate budgets to the wrong campaigns.

The first mistake is around remarketing.

The platform data here usually looks great, and people are solely focused on the CPA in the platform.

However, it’s very often the case that the CPM’s are insane due to high frequency / low reach. The CPC’s are even worse because CTR drops quickly, and your incremental CPA isn’t even considered.

I’ve often seen the CPC higher than the CPA in retargeting campaigns. Again, people will defend this because “CPA is what matters.” They will argue that people are seeing, not clicking, but converting.

The second call out regarding savings on Meta is with regard to negating out customers lists. It’s not a coincidence when the Lifecycle manager sends out a massive offer to the database that Facebook performs amazingly.

These customers were likely to convert anyway, so either add them as a negative audience to your prospecting campaign, or judge facebook on New Customer Acquisition rather than Cost Per Sale.

Affiliate Partners Rates

Another huge saving that can be made, particularly to people who are new to partnership marketing, is the commissions paid out to marketing partners.

If you pay all your partners the same rate, you are going to overpay some, and under pay others.

Overpaying can become costly very quickly, particularly if affiliate partners bid on your brand terms, and you allow coupon code partners on your program.

More back of the envelope maths here, but if you’re a big brand and you launch a partnership program, it’s not unusual to generate 1,000 new sales per month. Paying everyone 20% instead of 2.5% can cost you a lot of dollars per month.

The same logic applies for middle of funnel partners. Should the rate you pay these partners ranking for your brand + review have the same CPA as someone who’s introduced a user for the first time?

Don’t get me wrong, BOF and MOF partners provide tremendous value to businesses. They play a role in the purchase journey, but getting them on the correct rate is critical.

Tech Stack Audits

Operating (and paying) for multiple tools that do the same job (like loyalty), not implementing sunset flows or list cleaning practices thus mailing a significant number of contacts that produce low to no revenue (requiring higher plans than needed), using MMS over SMS without testing for all campaigns (which is typically 3x the cost). These are all examples of some tech stack mismanagement we have seen this year.

Add in unhygienic coupon code strategies allowing people to simply google to get 20% off, and the costs start to become huge.

Too often growth managers are hearing about shiny new tools and accepting the $100-$200 per month cost as “petty cash.” However, these tool costs add up. Without a defined tech stack with clear objectives, and justifiable costs, you’re probably spending thousands if not tens of thousands of unnecessary dollars per year.

Summary

All the above costs can probably be justified with associated revenue. This is what platforms do! They surface data to tell you’re getting huge value from the tool.

More scrutiny is required.

At Your10k, we scrutinise everything through the lens of incrementality. If you want to see how we can save your business money next year, fill out the form on the contact us page.