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Andre Kempe,


Admiral Media,

Oct 17, 2021

4 mistakes will waste your advertising budget

Along with a good product, a good pricing strategy, and proper distribution, you must have an effective advertising budget to achieve your company’s growth goals. But many companies fail in this area. Because they make mistakes one after another – wasting advertising budget.  Advertising is an important aspect of any company’s strategy. It is the only way to let your customers know about your product. However, planning and allocating advertising budgets isn’t an easy job. And marketers make a lot of mistakes that waste their budgets, which sets them short of achieving their targets. The Digital Age has changed everything. While online advertising can spur on new ideas, countless companies are still making some of the same mistakes they made in the Stone Age. From bad campaigns to phantom traffic. In this article, you will learn 4 mistakes that will waste your advertising budget. And that you need to be aware of if you want to make the most out of it.

You spend on ads with wrong or no event mapping

When you are spending money on advertising, you want to make sure this is highly targeted. So that it brings in the highest return on ad spend. You should know exactly which individuals to target. How many of these individuals are visiting specific web pages, using specific devices or software, the time they are using. More importantly, you will need to leverage this in the process of optimizing. And here I’m not talking about the campaign settings or ad copy only. But the algorithm working in the background, targeting those individuals and displaying your ad with the hope that they take the needed action, signup action for example. The way any ad algorithm works will differ from one platform to the other, but they all have something in common which is – anonymously – tracking what the user does on other websites, building a profile of user behavior, using the data in that profile to serve very personalized ads, then use your campaign settings, targeting settings and the ad copy to serve those personalized ads to the right user at the right time. Here comes the Event Mapping. It is very important for every algorithm. As it gives the needed signals for the algorithm to serve you the ads you need when you need them. Also, it is very important for you to measure the return on your ad spend. But how does that work? We won’t dive into the technical part of how to actually set this up, but Event Mapping is simply sending user actions or in-app events from your app to a measurement tool which in turn sends it to your ad channel. In practice, this is the act of telling Facebook Ads or Google Ads that this action means that a user has registered for your Bike rental service. And this is what everyone calls tracking.

Don’t panic!

Ad platforms don’t really track you the bad way, but they just leverage your online activity to serve you personalized ads.  Here is an example that just happened to me today. I was in Barcelona, Placa Catalonia with a couple of friends, and we wanted to rent bikes from Bicing – a local bike rental service – and just like everyone would do, we all started searching online to find the website, check prices, download the app, and rent bikes. However, I ended up renting an electric scooter instead of a bike. The offer was better, and I don’t need to paddle a lot, right? So, I rented the e-scooter and we went to the beach.  After a couple of minutes, I decided to check social media, and I saw an ad from Bicing offering me a 20% discount. I got motivated to rent a bike from Bicing and so I did. My action here – the app registration – was later sent from the measurement partner to the ad channel to be used in retargeting me to actually do a rental action that drives actual revenue to Bicing. Your advertising budget can be wasted if you don’t have the right event mapping and tracking in place. This will leave you blind on how much is the return on your ad spend and won’t help the algorithm in understanding your campaign or targeting the right people at the right time.

Targeting a small audience size

The main goal of the advertisers is to catch as many potential customers as they can by offering attractive deals and luring them with glamorous offers, and then these people become loyal customers of the product or service. In the past, this was very simple. Target as many people as possible through billboards or TV ads and hope for a percentage to buy your product or service. By that time, companies were hiring local advertisers or marketers because the job needed local experience and a lot of gut feeling. This changed in the modern world, where advertising is built on data. This means that advertisers understand how their customers behave and who they are more than ever before. Marketing teams no longer rely on gut feeling when creating an ad; instead, they base their advertisements on data. While it is still possible to target everyone, but this approach isn’t preferred in the new age of advertising. However, this approach has a not-so-negative side. It’s not enough for companies to know what data to use, to have the tools to collect and process this data to be used in creating marketing strategies. But to have enough data and to target suitable audience size. Learn More: Ad Budget Calculator

Targeting a small audience size comes with 2 bad outcomes as follows

1. High costs → Most ad channels offer auction-based campaigns. Where you and other companies compete in an auction to win an ad impression. You don’t necessarily pay per impression because an ad channel could allow a pay-per-click “PPC” model. If your audience size is small, you will be bidding or simply auctioning on the same audience many times against various other brands at the same time. This means you will have to increase your bids. Which will eventually increase your Cost Per 1000 Impression and Cost Per Click and leads to higher Cost Per Action. 2. High Creative Fatigue → Ads are your queen and they’re your first impression or elevator pitch, whatever you want to name them. You get seconds or even less to hook someone’s attention. And get them interested in just reading your ads with the hope that they click on them. Good ads will perform. But what most marketers forget is the frequency a user sees the same ad within the same day, week, or month. Targeting a small audience size will cause a high frequency. Simply ad channels will keep serving the same ads to the same people as long as your campaign is targeting them and live with enough bids and budget.

You have 2 problems to solve

The first is user’s interest because they will get tired of seeing the same ad over and over again, but this is fixable, change your ads more frequently, but then you get hit by the second problem which is the cost and the work behind creating these new ads finding and testing new winning ads that gets their attention again.

Prioritize only new customers

It’s undeniable that pressure will increase on you, marketers, to boost the numbers. One of the biggest challenges that many marketers are facing is having prospects willing to buy at any cost.  As a result, achieving new leads for your sales funnel will become more challenging because your prospects are getting warier about sharing their contact information with unfamiliar brands. In addition to that, companies grow by continually adding new users and retaining existing ones, but simply gaining a new customer is not always the right way. Research shows that a 5% increase in customer retention rates could increase your profits by 25%. In addition to that, it will cost you about five times more to gain a new customer compared to retaining an existing one.  This doesn’t mean you should stop looking for prospects. But it does mean you should take time before opening a new campaign and spending a portion of your budget. Maybe targeting those who engaged before will drive higher returns and bring you close to your advertising targets.

Experimenting too much

Advertisers are always looking for new experiments. It’s that part of the job that helps in achieving advertising targets as well as finding new opportunities to decrease ad costs. Every advertiser can say that they love testing new ad tech, platforms, or event campaigns. Companies live or die, and testing is the way to make your overall performance as stable as possible.  If you’re not trying new ads or trying different messaging, then chances are you’re going to fall into a plateau. So it can be helpful to keep running tests, and that is why we do it! However, there is a negative side to too much experimentation. Just like the scientific method is reliant on the quality of the initial question and hypothesis, so is experimentation reliant on the hypothesis and implementation. But advertisers sometimes forget to take into account how much they spend on experiments, what was the return on each of these experiments, and how much time they spent experimenting with a bad hypothesis. Trying many hypotheses at the same time will only distract you from your main objective. You will spend too much time and budget trying to make all of them work instead of spending the majority of your efforts on one (or maybe two if it makes sense).  By focusing on the hypothesis that’s high quality and relevant to your current performance, you will be able to learn faster and spend less time debugging your experiments. Also, you will maximize your return on each experiment and potentially find that big thing that will take your advertising to the next level.


Each of us has a great advertising campaign in mind. However, there are a lot of factors that determine whether that campaign is going to be successful or not. And many of those variables cannot be controlled.  Even the best advertisers have landed on the other side of the spectrum as their campaigns fail to achieve their goals. We all make mistakes, but the best ones are the ones balancing between their wins and losses and efficiently managing their advertising budget to reach their targets.  That’s it for this one, see you in the next article. Ciao!

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