The Hidden Waste in Your Media Spend: What We’ve Learned from 700+ Audits
by Kylie Carrasco •
In over 700 audits this year, I haven’t found a single brand without wasted media spend. It’s likely impossible to run a perfectly incremental media plan, but the waste I see—from $5M startups to $5B enterprises—is mind-blowing.
Most brands are overspending by around 25%. Some know it and don’t see a solution; others think every dollar is essential. But the reality is, advertising is often a “necessary evil”—and more often, it’s just a “profit parasite.”
How to Spot Wasted Spend
It’s simpler than you think to know if your ads are working or just bleeding cash. Here’s a quick gut-check with LTV (lifetime value) and CAC (customer acquisition cost):
- Calculate marginal LTV per customer.
- Calculate true CAC.
- Divide LTV by CAC.
- Ratio below 1.25: You’re overspending.
- Ratio above 2x: You’re probably safe, but I’d still bet there’s waste to trim.
The Quick Gut-Check for Media Waste
One more test to flag overspend:
- Trend CAC and ad spend over time.
- If they’re in lockstep, you’re likely overspending.
- A weak correlation? Dig deeper.
The Incrementality Test: Simple, Effective, and Eye-Opening
Once you’ve flagged that you’re in the “possibly over-spent” category, you should run an incrementality test:
- 7-figure brands: Turn off ads in half your markets.
- $10M-$30M brands: Choose stable states or DMAs.
- $30M+ brands: Run a proper predictive analysis by geo
Skip testing individual channels. Turn off all media in your test markets, leave it on in control markets, and monitor total revenue and new customer trends over the next 30-60 days:
- Revenue holds steady: Overspending confirmed.
- Revenue drops: Media spend is working, but relying only on new customer acquisition is another red flag for growth.
Don’t Overthink It
Incrementality testing can get complex. Too many brands rush into Bayesian models or collinearity analysis. Unless you’re above $10M annually, it’s overkill. This basic test is better than nothing.
What to do Next
If this sounds valuable—or exhausting—reach out. We’ve done hundreds of these audits and can do one for your brand for free. Don’t keep funding a profit parasite—let’s make your ad spend drive real growth.
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