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3 Leaks in Your Digital Marketing Budget You'll Want to Plug Today Why go after users who have no intention of buying from you?

By Jay Friedman Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.


Drip, drip, drip. Digital media is the most measurable medium marketers have ever used, but it's also the most complex. As a result, just knowing what to measure or where to look can be difficult, and elude even the savviest digital marketers. Three specific aspects of digital media are measurable yet easily overlooked, ultimately causing approximately 10 percent of desktop/mobile display and video budgets to leak. The good news is: Budgets don't have to leak.

Related: 5 Digital-Marketing Tactics to Ditch in 2016

Where's the leakage coming from? Here are several trouble spots:

1. Uncontrolled frequency

Reach and frequency of ad campaigns have dominated media-effectiveness discussions since the beginning of mass media, "reach" meaning the percentage of an audience universe that sees an ad, and "frequency" meaning how many times a certain user sees the ad.

But marketers may be leaking money out of their digital budgets -- likely around 4 percent across each campaign -- due to mismanaged frequency in targeting consumers. Here's the problem: Digital targeting is typically based on "either/or" frequency caps. That means that for each campaign, there can be a daily cap of "x" number of impressions served per day, or a campaign cap of "x" number of impressions served per campaign.

You're certainly familiar with those online ads you see for that product you just looked at online but didn't buy. The ads seem to "follow you around" relentlessly. In fact, they're being repeatedly served to you and other users who have already been exposed to the product but have no intention of taking action; so, why do marketers continue to serve these "nonbuyers" such ads?

While the overall ROI is still there, marketers can and should mathematically identify frequency cutoffs and eliminate this waste.

According to my company, Goodway Group, solving this issue algorithmically can eliminate approximately 4 percent of waste within a campaign budget, by channeling impressions beyond a user's "cutoff" point to users who have been underexposed to the marketer's message. Four percent doesn't sound like a lot, but when you have a $10 million digital ad campaign, that $400,000 can represent a lot of wasted opportunity.

2. Untargeted behaviors in the path to purchase

Just as re-targeting (discussed above) is popular with marketers, so is behavioral targeting. Been shopping for a Ford F-150 lately? You may start to see ads for the Chevy Silverado. And identifying obvious targets like this is easy. But what other characteristics are marketers missing?

One classic example from nearly a decade ago saw an HDTV manufacturer initially target only "TV shoppers," then find that a significant portion of its converting audience members had a military profile. It was later found that the timing of the HDTV campaign had coincided with that of an annual military bonus, which was driving a military-heavy portion of the audience to become HDTV buyers.

Had the manufacturer not been paying attention to the other behaviors and characteristics driving the purchases, it never would have learned about this quirky coincidence, or been in a position to take advantage of it.

The hidden problem here is that reporting on these untargeted behaviors typically focuses only on the untargeted behaviors from the last impression served prior to the user converting. And these untargeted behaviors -- in terms of industries with long consideration cycles, such as automotive or healthcare -- aren't representative of consumers' behavioral profile when they initially started their purchase consideration.

Related: 5 Ways To Optimize Your Digital Marketing Budget

My company looked at the untargeted behaviors, from the full path to purchase, and improved performance across entire campaigns an average 4 percent just by extending the untargeted behaviors' look-back and applying it forward.

That's noteworthy because adding up the costs of uncontrolled frequency and untargeted behaviors alone amounts to an alarming 8 percent of a digital budget leakage that's already gone down the drain.

3. Fraud analysis

The topic of digital fraud has been covered six ways to Sunday. Looking to solve another leak, my company teamed up with Pixalate to identify suspicious and unproductive traffic that other quality-control vendors hadn't detected. That partnership saved clients approximately 2 percent through the implementation of daily automation that removes suspected fraudulent IP addresses and problematic sites.

Going forward

Uncontrolled frequency, untargeted behaviors and fraud analysis make up a 10 percent leak in marketers' digital budgets. Digital media is hyper-dimensional. There are truly hundreds of facets and multiple lenses through which we can look at campaigns.

Related: 3 Tips for Digital Marketing on a Budget

Identifying the co-variance across all of these variables is so far impossible, but finding and fixing one leak at a time can add up to meaningful savings for marketers willing to make the effort.

Jay Friedman

COO of Goodway Group

Jay Friedman is the COO of Goodway Group, a managed-services programmatic partner to local, regional and Fortune 500 brand agencies headquartered in Jenkintown, Pa. He is also the author of 30 Days to Digital Media Expertise and 30 Days to Digital, available through Amazon and Scribd. Currently residing in Plano, Texas, Friedman is a dynamic and engaging professional speaker.

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