Budget & ROI
Where marketing budgets leak: the data behind wasted spend.
Most marketing waste isn't one big mistake. It's a series of small leaks: fees nobody reads, placements nobody sees, tools nobody uses and creative nobody remembers. Here's what the research says about each one, and how to find and fix them in your own budget.
Leaders often ask us some version of the same question: how much of our marketing budget is wasted? The honest answer is that nobody can give you a single number without looking. The often-quoted line that half of advertising is wasted is a saying, not a statistic.
What we can do is point to where independent research has measured waste, and show you how to check for the same leaks in your own spend.
The budget context: flat money, higher expectations
Gartner's 2025 CMO Spend Survey found that marketing budgets held at 7.7% of company revenue, flat from 2024, according to Marketing Brew's coverage in May 2025. Paid media took about 31% of budgets, with martech, labour and agencies each taking roughly a fifth. The same coverage reported that 39% of CMOs planned to cut agency budgets.
The 2026 survey showed little change. Budgets rose only slightly to 7.8% of revenue, and 56% of CMOs said they lacked the budget to deliver their 2026 strategies, as reported by Communicate Online in May 2026.
A caveat for Canadian readers: Gartner surveys around 400 marketing leaders in North America, the UK and Europe, most at companies with more than US$1 billion in revenue. Smaller and mid-sized Canadian businesses often spend a different share. Use it as context, not a target.
If budgets aren't growing, money for new priorities has to come from somewhere. Waste is the least painful place to find it.
Leak 1: the programmatic supply chain
Programmatic advertising buys ad space automatically across thousands of websites. It's efficient in theory, but every step between your budget and the screen takes a cut, and quality varies enormously.
The Association of National Advertisers (ANA) studied this in detail. Its December 2023 Programmatic Media Supply Chain Transparency Study, covering 21 advertisers and 12 supply chain companies, found that:
- Only 36% of every dollar entering a demand-side platform effectively reached the consumer.
- 29% went to DSP and SSP fees and other transaction costs.
- 35% went to non-viewable, invalid, non-measurable or made-for-advertising inventory.
- The ANA estimated a US$22 billion efficiency opportunity in the US$88 billion open-web programmatic market.
The ANA has since tracked progress through a quarterly benchmark. Its Q1 2026 benchmark, released in May 2026, put the share of programmatic spend delivering quality impressions at 43.3%. Higher-performing advertisers converted 54.0% of spend into qualified impressions, versus 32.1% for lower performers, the widest gap the benchmark has recorded. The gap between careful and careless buyers is growing.
Made-for-advertising sites
Made-for-advertising (MFA) sites exist mainly to sell ad impressions. In the ANA's June 2023 first look at its study, MFA sites accounted for 21% of impressions and 15% of spend, and the average campaign ran across 44,000 websites. Industry pressure has cut MFA exposure sharply since then; the ANA's Q1 2026 benchmark measured it at 1.1%, up from 0.4% to 0.6% through 2025. If you don't control where your ads run, you can't assume you're in the improved group.
Leak 2: invalid traffic and ad fraud
Ad fraud estimates vary widely, and many headline figures come from vendors selling fraud protection. Treat them carefully. One useful, clearly defined measure comes from verification company Integral Ad Science. Its Media Quality Report, published in May 2025, estimated that ad fraud in campaigns without fraud mitigation reached 10.9% by the end of 2024, compared with 0.7% for campaigns using anti-fraud technology.
The lesson isn't the exact percentage. Unprotected buying carries a much higher risk of paying for bots and fake clicks.
Leak 3: martech you pay for and don't use
Software is one of the quieter leaks. Gartner's 2023 Marketing Technology Survey found that marketers used just 33% of their martech stack's capabilities, down from 42% in 2022 and 58% in 2020, as reported by MarTech in 2024 and Chief Martec in 2023. With martech taking around a fifth of marketing budgets in Gartner's 2025 spend data, unused licences and overlapping tools add up quickly.
Common culprits are duplicate tools bought by different teams, enterprise tiers bought for features nobody set up, and automation platforms used as basic email senders. Our guide to what to automate in marketing covers how to get more from what you already pay for.
Leak 4: creative that doesn't work hard enough
Media gets most of the scrutiny, but creative often decides whether spend pays off. A 2017 Nielsen and Nielsen Catalina Solutions study found that creative quality contributed as much to in-market success as all other factors combined. When creative was strong, it drove up to 80% of the result for traditional TV and 89% for digital. The research is older and focused on consumer goods, but the principle holds: weak creative makes every media dollar work harder for less.
Spending is also under pressure from short-term thinking. Nielsen's 2025 Annual Marketing Report found 54% of global marketers planned to cut ad spending in 2025. Cuts made without evidence often hit brand-building first, because its returns are slower and harder to attribute.
Leak 5: measurement that rewards the wrong things
Some of the biggest leaks hide behind good-looking numbers. Retargeting and branded search often take credit for customers who would have bought anyway, while channels that create new demand look weak. If you can't trust your attribution, you'll keep funding what looks efficient rather than what's effective. We cover this in why your marketing numbers don't add up.
Find the leaks: a checklist
| Area | What to check | Warning sign |
|---|---|---|
| Programmatic | Placement reports, number of domains, fees per layer, MFA and IVT rates | Thousands of unknown sites; nobody can explain the fee stack |
| Fraud and quality | Verification in place, viewability, bot filtering, lead quality in CRM | Cheap clicks, high bounce, junk leads |
| Search | Search terms, branded vs. non-branded spend, match types | Paying heavily for your own brand name with no test of incrementality |
| Retargeting | Frequency, audience size, holdout results | Very high ROAS on a small audience that was already buying |
| Martech | Licences, active users, features in use, overlapping tools | Seats nobody logs into; two tools doing one job |
| Agencies | Scope, fees vs. hours, markups, who owns accounts and data | Each agency recommends more of its own channel |
| Creative | Age of ads, testing cadence, consistency of brand cues | Same ads for months; no structured testing |
For the paid media side, our performance marketing audit checklist goes deeper on each check.
A 90-day reallocation approach
Days 1 to 30: Find and stop the obvious leaks
Run the checklist above. Pull placement and fee reports, audit martech licences and reconcile platform results with real revenue. Cut spend that can't show it reaches real people: unknown sites, unprotected inventory and unused tools. Set up a blended metric, like total revenue divided by total marketing spend, so you can see the overall effect of changes.
Days 31 to 60: Test what you can't prove
For channels that look strong but may not be incremental, such as retargeting or branded search, run holdout or geographic tests. Tighten programmatic buying to a shorter list of trusted sellers; the ANA's 2023 study suggested 75 to 100. Refresh tired creative and start a simple testing rhythm.
Days 61 to 90: Move money in stages
Shift savings toward what tests show is working, in steps rather than all at once, and watch your blended metric. Agree with leadership on the budget rules going forward: what gets funded, what gets tested and what gets cut. This is where a clear digital strategy earns its keep, because it tells you what the money is meant to achieve.
A note on the evidence: much of the research above is US-based and focused on larger advertisers. The patterns apply in Canada, but the exact percentages in your budget will differ. That's why the audit matters more than the benchmarks.
How Three Dots Brands approaches this
We help brands in Toronto and across Canada find where budget is leaking and put it where it works. Using our Think, Plan, Execute approach, we audit spend, contracts, tools and measurement, build a reallocation plan leadership can stand behind, then help execute it with your team and partners. If you want a quick read on where your budget might be leaking, start with our marketing diagnostic.
Frequently asked questions
How much of a marketing budget is typically wasted?
There is no reliable single figure, and claims like half of all marketing is wasted are not based on measurement. What research does show is waste in specific areas. For example, the ANA's 2023 study found only 36% of each programmatic dollar entering a demand-side platform effectively reached consumers. The only way to know your number is to audit your own channels, contracts and tools.
What percentage of revenue should a company spend on marketing?
Gartner's CMO Spend Survey put average marketing budgets at 7.7% of company revenue in 2025 and 7.8% in 2026, among mostly large companies in North America and Europe. The right level for you depends on your growth goals, margins, category and stage. Benchmarks are a sense check, not a target.
How do I reduce wasted ad spend without hurting growth?
Start by cutting spend that can't show it reaches real people, such as low-quality programmatic inventory and unprotected placements. Then test whether channels like retargeting and branded search are truly incremental before cutting them. Move savings in stages into what tests prove works, and track a blended business metric so you can see the overall effect.
What are made-for-advertising sites?
Made-for-advertising sites are websites built mainly to sell ad impressions rather than to serve readers. They often have heavy ad loads, recycled content and paid traffic. They can look cheap and score well on some metrics, but they rarely deliver real attention. In the ANA's 2023 study they accounted for 21% of impressions and 15% of spend.
Sources
- Marketing Brew, "Marketing budgets stagnate from 2024 to 2025" (Gartner 2025 CMO Spend Survey), 2025
- Gartner, "Gartner 2025 CMO Spend Survey reveals marketing budgets have flatlined at 7.7% of overall company revenue", 2025
- Communicate Online, "CMOs increase AI spending despite limited readiness, Gartner finds" (Gartner 2026 CMO Spend Survey), 2026
- ANA, "ANA provides first look at in-depth programmatic media transparency study", 2023
- ANA, "ANA releases part 2 of comprehensive programmatic media buying study", 2023
- ANA, "ANA Programmatic Transparency Benchmark reveals widening gap between top and bottom advertisers", 2026
- Integral Ad Science, "Media Quality Report, 20th edition", 2025
- MarTech, "How marketers can help boost martech utilization", 2024
- Chief Martec, "Martech utilization problems: how to diagnose and remedy them", 2023
- Nielsen, "Perspectives: Want a successful ad? Get creative", 2017
- Nielsen, "Nielsen releases its 2025 Annual Marketing Report", 2025
Data limitations: most studies cited are US or global, skew toward large advertisers, and use different definitions of waste and quality. Fraud figures are estimates from a verification vendor. The Gartner figures are taken from published coverage of Gartner's surveys. Figures are the most recent we could verify as of October 2026.