The Hidden Cost of Wasted Ad Spend—and How to Fix It

For food and beverage brands navigating tight margins, short purchase cycles, and omnichannel complexity, wasted ad spend can be especially damaging. There’s nothing more painful than spending big on paid media and getting little in return. For DTC brands chasing scale, wasted ad spend is more than a budget issue—it’s a threat to your growth trajectory, EBITDA, and investor confidence.

But here’s the truth: most wasted ad spend isn’t the result of incompetence. It comes from outdated assumptions, misaligned KPIs, and a lack of clarity about what’s actually driving incremental growth.

Ben Dutter, SVP of Strategy at Power Digital, put it best in his recent post:

“We saved a client $6M in wasted ad spend while keeping revenue flat.”

For executives, that’s not just a line about efficiency—it’s about protecting enterprise value. Wasted media spend doesn’t just hurt performance marketing. For a $20M brand, even a 10% inefficiency can represent a $2M EBITDA hit. That’s margin erosion that boards and CFOs feel immediately.

Ready to learn more? This blog breaks down how to reduce marketing waste by identifying hidden inefficiencies and reallocating capital into programs that accelerate profitable growth.

ROAS is the default metric for many marketers. But alone, it tells an incomplete story. It can reward non-incremental revenue, double-count brand awareness, and mask inefficient spend on already-converted users.

As we share in 10 CPG Marketing Mistakes to Avoid, relying too heavily on ROAS can stall scale. Brands with “great ROAS” often underperform on actual profit.

The fix? Pair ROAS with:

Those three metrics form the backbone of efficient, data-driven growth.

Incrementality testing answers the most important question in performance marketing: What would happen if you didn’t spend this money?

In the case Dutter shared, a high-end loungewear brand had scaled rapidly and was spending heavily across Meta and Google. On paper, ROAS looked solid. But incrementality testing showed that most of the Google spend was cannibalizing organic or brand traffic.

By cutting spend 40% YOY and reallocating to higher-impact areas, the brand preserved revenue and drastically improved margin.

Dutter adds:

“A lot of people talk about using incrementality testing for growth, unlocking scale, finding opportunities, etc. But, more often than not I find that many brands are just straight up burning cash. Improved margin and cash flow is the cornerstone of a healthy business, and THAT is what allows them to make big bets to unlock scale beyond 8 figures of revenue.”

And here’s the part many CMOs overlook: the goal isn’t just to cut—it’s to reinvest wisely. Recovered ad dollars should be immediately reallocated to high-impact areas such as:

This shift reframes incrementality testing from a defensive exercise to an offensive growth lever. It’s not just about protecting margin—it’s about positioning the brand to capture the next wave of growth.

Want to see how channel diversification impacts efficiency? Check out our Digital Marketing Services that combine media strategy with financial modeling.

Google is a critical channel. But it’s also one of the easiest to over-invest in, especially for branded search. Many DTC brands continue to bid aggressively on their own brand terms under the guise of “protecting the funnel.” But when margin is tight, this often leads to double-counting sales that would have happened anyway.

Use attribution modeling and search query analysis to determine how much of that branded traffic is actually incremental.

If you’re spending more than 20% of your budget on branded terms, it’s time to ask if that spend is driving growth or just reinforcing convenience.

One of the biggest sources of wasted spend is misalignment between media mix and business objectives.

If you’re aiming to:

And for omnichannel brands, the media mix extends beyond DTC. Retail media networks (e.g., Instacart, Amazon DSP) can complement retention strategies by re-engaging high-value buyers where they naturally shop. Whether reinforcing brand loyalty in-store or nudging replenishment online, these platforms extend the customer lifecycle beyond your DTC funnel.

If you’re stuck in Meta and Google with 90% of your budget, you’re likely missing incremental wins. TikTok, influencer, affiliate, OTT, and retail media can all add efficiency and scale when layered strategically.

A diversified media mix protects your brand from platform volatility and improves cross-channel lift. It also forces better creative, smarter segmentation, and real learning loops.

Performance isn’t just about spending. It’s about storytelling.

For a deeper dive into how data-backed creative testing can eliminate inefficiencies and unlock ROI, check out our guide to Data-Driven Creative for D2C Brands.

Brands that treat creative as an afterthought burn budget fast. Creative testing and iteration should be part of your media planning, not just an execution layer.

Sometimes growth doesn’t look like a revenue spike. Sometimes it looks like this:

That’s real, operational growth. And it creates the foundation for scale that lasts.

Wasted ad spend isn’t just a financial problem. It’s a clarity problem. When you know what drives incrementality, what channels build margin, and how creative connects to revenue, you make better bets. When marketing, finance, and executive teams align on what performance actually means, you unlock faster decisions and higher-impact investments.

At Power Digital, we help DTC brands eliminate waste, maximize performance, and invest with conviction. Explore our Digital Marketing Services or connect with a Digital Marketing Agency that turns your ad budget into strategic firepower.