• Working spend refers to the actual media inventory costs to expose advertising assets to the consumer. This typically includes paid media such as display advertising, paid search, social media advertising, email marketing etc.
• Non-working spend refers to all resources involved in the development and creation of plans, purchasing, and assets against business and marketing goals. This can include agency fees, content production costs, market research, customer insights generation, MarTech, partnerships, and sponsorship right fees. Salaries and benefits for employees involved in digital marketing are typically overhead non-working spend.

In essence, working spend is directly related to the distribution and exposure of advertising assets, while non-working spend is associated with the behind-the-scenes activities that support these advertising efforts. Therefore, working spend directly influences the reach and visibility of the campaign, impacting the number of potential customers who seethe campaign. Non-working spend is crucial for the strategic planning and execution of the campaign, ensuring that the advertising assets are well-targeted, relevant, and effective. The equilibrium between working and non-working expenditures in a digital marketing campaign is crucial for its success.

Too much emphasis on working spend without sufficient non-working spend may result in a wide-reaching but poorly planned and ineffective campaign. Conversely, excessive non-working spend without adequate working spend may result in a well-planned campaign that fails to reach a sufficient audience.

Although it varies by nature of business and stage of growth, an 80:20 working to non-working ratio , as a rule of thumb, is considered a standard optimization to ensure both the reach and effectiveness of the campaign.

As businesses scale,non-working spend should grow at a slower rate than revenue and working spend.However, this does not always happen due to a myriad of reasons. Businesses with more than 25% non-working spend typically have potential for optimization without compromising marketing effectiveness. Below are six key levers for improving non-working spend:

Let's add a source if this is external; if it's one of our "rules of thumb", would call that out specifically

1. Streamline processes: By improving efficiency in the planning and execution processes, a company can reduce non-working spend. This could involve using project management tools, improving communication, and reducing unnecessary meetings.
2. Leverage technology: Using marketing automation tools can help reduce the time and resources required for campaign planning and execution, thereby reducing non-working spend.
3. Optimize agency relationships: By consolidating agency relationships, a company can reduce the cost of non-working spend by negotiating better rates with agencies and reducing administrative overhead.
4. In-house production: By bringing some aspects of the campaign production in-house, a company can reduce costs. This could involve creating content, designing graphics, or managing social media channels.
5. Use of templates: Using templates for content creation and design can reduce the time and resources required, thereby reducing non-working spend.
6. Internal training and audits: Training and development of the company’s marketing team and regular audits of the marketing processes and spend could also improve efficiency and reduce waste.

• Step 1: Build a  current state fact base by developing a breakdown of historical non-working spend and interviewing stakeholders responsible for each spend bucket to understand current state processes.
• ‍Step 2: Identify and size opportunities by reviewing agency contracts and current state spending by row/activity to develop hypotheses on opportunities. You also need to source opportunities from key client stakeholders and size those while assigning risk to each opportunity.
• Step 3: Plan, execute and reflect. Prioritize a few opportunities based on size and risk,and develop a plan to realize efficiency gains. Regularly review progress and reflect on learnings before the next iteration or moving on to the next opportunity on the list.