9 Ways Marketing Wastes Budget

People outside marketing often mistakenly think the entire marketing budget is allocated toward campaigns. There is normally significant non-campaign investment in things like travel, postage, office supplies, and technology. Knowing how much of your budget is dedicated to achieving your strategic campaigns and goals enables you to communicate budget distribution within and outside the team, and it helps everyone better understand the significance of aligning investments.

Ways Marketing Wastes Budget


Here are nine key ways that marketing loses money in the marketing budget. We know these are both real and significant because we onboard and manage hundreds of real marketing budgets, and our marketing database shows us the facts.

1. Not reviewing the marketing budget regularly

A marketing team should spend every last cent of its budget in the most thoughtful way possible, not
a penny more. Marketing teams that don’t regularly review and maintain the status of their budgets don’t have a chance of doing this. Most months, they will overspend or underspend, culminating in a major miss by the end of the year.

One of our customers reported that before using our platform, her team reached the end of the fiscal year to be told by finance that they had underspent by tens of thousands of dollars on a budget of less than $1,000,000. That money could have delivered meaningful business results. The VP of Marketing didn’t know, because they didn’t have a process and platform that supported a current view of the marketing ins and outs.

2. Not reviewing the budget as a team

We requested a customer bring their entire marketing team to a training session. During the meeting, as we reviewed their budget, a budget owner piped up, “This is awesome. I didn’t even realize I had a $50,000 budget in Q2.”

Why didn’t that person know? This was a smart team run by a strong VP of Marketing. There were a few reasons, but the main one was that they did not review the budget as a whole team. There were people with buying power and budget responsibility who didn’t know what they were empowered to spend and when.

Related: Creating a Marketing Budget That Can Be Justified


3. Budget spread over multiple worksheets

A customer walked us through their budget spreadsheet before onboarding with us. It looked like a work of art. Beautifully laid out. Formulas pulling data from other worksheets. A separate worksheet for each budget owner, entering their data into a common template. The problem was that the totals on the individual worksheets didn’t match the totals on the summary worksheet. And the totals on the individual worksheets didn’t add up to the full budget target.

It required forensic analysis and some black-belt spreadsheet skills to figure out all the errors. The problem is spreadsheets fail silently. If someone hard-codes a number on top of a formula in one cell, enters a number as text in another, or inserts a row that’s not included in a formula in another, multiple little piles of wasted budget are distributed throughout the complex spreadsheet, hidden in plain sight. Every incremental worksheet or spreadsheet, and every incremental user working in the spreadsheet, increases the frequency and likelihood of errors.

4. Poor visibility into the budget

One budget we onboarded had run out of funds for two of its four divisions at the end of the eighth month of the fiscal year. Every penny in the last third of the year was 100% over budget. The budget owner didn’t know this because their spreadsheet, provided by finance, was so complex that it was genuinely difficult to understand what was contained within it. Knowing that less than 50% of marketers can assign and track campaign expenses, you must have full visibility into your marketing budget.

5. Stranded budget in completed campaigns and closed expenses

One company realized that it had 23% of its budget still available to spend. That’s not great. Worse, they had only two weeks left in their budget year to spend it—an impossible task. That 23% was an accumulation of numerous small differences between planned and actual expenses and small underspends in completed campaigns that had accrued throughout the year.

Just like the vacation money jar, they added up to a significant total. They could have added tremendous business value if they’d been easily visible to everyone on the team.

6. Inaccurate budget tracking lost to a use-it-or-lose policy

One of our customers routinely lost between 5% and 10% of her budget each year because it was difficult to spend her budget in time with the existing budget management tools. This customer didn’t have a current view of what had been spent, so she was nervous about overspending as she approached the end of the quarter. Once the expenses were reconciled, any remaining budget was lost for good. Data from our OMI survey also states that only 40% of marketers have a system to identify and reallocate unused budgets.

7. Overpaying due to multiple rush orders

Rush charges occur (most of the time, at least) when a poorly planned expense is incurred. “Poorly planned” means the team finds itself making an investment in something services-based without leaving time to negotiate a fair price. Common examples of this are prints, designs, and booths needed for events. Typically the marketing team will find itself overpaying by at least 10% for such expenses.

8. Not reconciling expenses with finance

One prospect who did not become a customer (you’ll see why in a minute) was a CMO who told us that
he did not reconcile any expenses in his multi-million dollar annual budget. We expressed surprise that this was so, since he acknowledged he had no way of knowing his current expenditure accurately. His outlier status was confirmed when he stated that he was okay if the budget was “within about 20% of the target by the end of the year.” If your company is okay with your budget being 20% inaccurate, then careful budget management is clearly not a priority.

Unfortunately, this is quite common as discovered in our OMI survey, less than 50% of marketers reconcile their marketing expenses with finance on a weekly or monthly basis. To top that off, only 40% of marketers can accurately report marketing campaigns and finance budget structure/GL codes.

9. Making mistakes in expense reconciliation

One of our customers generated a 19% budget inaccuracy by adding up the planned and actual expenses—all thanks to a spreadsheet design error. While this is a gross error, there are numerous manual expense reconciliation errors that occur over a year, such as failing to close expenses, closing them for the wrong amount, accepting expenses from other departments, logging expenses in the incorrect currency, and so on. Every one of these errors leaves a small pile of wasted budget.

Companies consistently generate cumulative budget risks of 15%-25% annually due to an aggregation of the issues above, over the fiscal year. In other words, they lose 0.8% – 2.1% of their monthly budget to the Law of Small Change. There is a tremendous opportunity to reclaim that lost budget – the marketing equivalent of a free vacation. After all, who wouldn’t like a 15-25% budget increase?



Dan Faulkner is co-author of The Next CMO: a guide to operational marketing excellence, and the CTO of Planful, where he is responsible for the technical strategy and delivery of the world’s first AI-powered marketing performance management platform. Dan has 25 years of high-tech experience, spanning research and development, product management, strategy, and general management. He has deep international experience, having led businesses in Europe, Asia, North America, and South America, delivering complex AI solutions at scale to numerous industries. Dan holds a Bachelor’s degree in Linguistics, and Masters degrees in Speech & Language Processing, and Marketing. He has completed studies in Strategy Implementation at Wharton.

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