SMEs Are Wasting up to 60% of Their Marketing and How to Fix It

March 2025

Wasting 60% of your marketing? Here are 12 of the main reasons contributing to marketing waste within SMEs and how to fix them.  

Marketing is a critical investment for UK small and medium-sized enterprises (SMEs), but a significant portion is wasted through inefficiencies and poor resource allocation focusing on the wrong things. According to research by Proxima, up to 60% of marketing budgets are wasted due to inefficiencies in execution and planning (Proxima: Eliminate Waste and Complexity in Your Digital Advertising Budget). When reflecting on an SME's marketing, it is common to see unclear marketing priorities, poorly executed or mismanaged campaigns, ineffective use of marketing channels, or failing to leverage modern marketing tools effectively (including automation and AI).

From Epitomise's perspective of working with c.100 SMEs, there are 12 common areas of marketing waste and these, along with how to fix them, are detailed below. Addressing this waste and redirecting the resources can drive significant growth with no additional investment. 

1.     Lack of Strategic Planning and Measurement

No plan, no tracking, and vague objectives create an environment ripe for marketing waste. The adage “if you fail to plan, you plan to fail” holds true; without strategy and measurement, overspending and inefficiency are almost guaranteed.

A Marketing Week survey in 2024 found that roughly two-thirds of SMEs have no marketing plan at all startupsmagazine.co.uk.

Similarly, a 2023 UK Marketing Maturity Report of ~2,000 SME decision-makers revealed 67% had no marketing action plan and over half had no business plan gatwickdiamondbusiness.com.

The result is ad-hoc campaigns and scattergun tactics that dilute efforts and often fail to yield results – essentially, budget spent in the dark with no direction.

How to fix it:

• Develop a clear marketing strategy with SMART objectives (Specific, Measurable, Achievable, Relevant, Time-bound).
• Set KPIs and track progress with analytics tools.
• Regularly review performance and adjust your strategy based on data.

 2.     Failing to Measure Outcomes Effectively

Most SMEs do not know or measure their marketing key performance indicators (KPIs) and therefore have no idea which activities are delivering or contributing to waste.

Only 25% of the ~2,000 SME decision-makers in the above survey, had clearly defined marketing performance measures. And, only 28% of SMEs generate enough leads to hit growth, many are likely spending on campaigns that under-deliver but aren’t being corrected due to lack of data.

The waste from this blind spending is significant. Marketers themselves acknowledge the problem: in one survey, nearly half of retail marketers admitted they waste budget on digital ads that don’t yield meaningful results marketing-beat.co.uk, often due to poor visibility into performance.

How to fix it:

• Define key metrics such as cost per lead (CPL), return on ad spend (ROAS), and conversion rates.
• Use Google Analytics, CRM software, and UTM tracking to monitor results.
• Regularly analyse reports to identify and double down on successful marketing efforts.

 3.     The Misuse of Specialist Resource

If an SME doesn’t define goals or KPIs for campaigns, especially those run by third-party agencies, it may keep pouring money in without seeing returns, paying for activity instead of results.

SMEs often hire agencies or vendors for help, but only 27% set clear objectives for those engagements gatwickdiamondbusiness.com.

Without accountability, an SME might pay a marketing agency a monthly fee for vague deliverables. For instance, an SME could be paying an SEO agency for content and links, but if no one is checking whether search rankings or site traffic are improving, that retainer can continue for months with poor results – a direct waste of budget.

So, 27% of SMEs set objectives for agencies butthe rest may not even know if their outsourced marketing is working. Little surprise that 50% of salespeople in companies aren’t satisfied with their firm’s marketing efforts mdgsolutions.com – misalignment like this indicates marketing money being spent that isn’t driving the leads sales need, a form of inefficiency often due to poor coordination of external and internal teams.

How to fix it:

• Set clear deliverables for any external agency.
• Use performance-based contracts to align incentives.
• Regularly review agency results and demand transparency.

 4.     Wasted Spend in Digital Advertising

While online ads can be highly effective, many SMEs struggle to execute them efficiently, leading to substantial waste on clicks and impressions that don’t convert.

Ad fraud and invalid traffic also eat into budgets. Even if an SME runs well-targeted campaigns, a portion of online ads will inevitably be shown to bots or click farms.

One analysis of hundreds of small business ad accounts found about 25% of pay-per-click (PPC) budget is wasted due to managerial and strategic errors searchengineland.com.

In many cases, SMEs “set and forget” their campaigns – for example, WordStream’s review of 500 SMB Google Ads accounts revealed less than half had conversion tracking in place searchengineland.com. If you’re not even tracking leads or sales from your ads, it’s likely much of that spend is not doing anything useful.The same study tied the 25% inefficiency directly to lack of active campaign management searchengineland.com.

In short, a quarter of search advertising spend goes down the drain because busy SMEs aren’t optimising keywords, ads, and bids regularly.

How to fix it:

• Implement conversion tracking and continuously optimise campaigns.
• Use negative keywords and geotargeting to filter out irrelevant traffic.
• Regularly review and optimise bids, keywords, and ad placements.

 5.     Using Platforms that Don’t Reach Target Customers

A common issue, many SMEs jump onto trendy platforms or spread spend across many channels even if their target customers aren’t there.

When money flows into the wrong channels, the return is minimal. Without careful channel selection and audience targeting, resources and spend quickly becoming waste.

Recent research reinforces how digital ad budget can vanish on ineffective channels. A 2022 survey of 200 UK retail marketing decision-makers found retailers spend 37% of their digital ad spend on “ineffective” channels marketing-beat.co.uk.

How to fix it:

• Conduct market research to determine where your audience is most active.
• Focus budget on proven channels rather than experimenting widely.
• Use A/B testing to identify top-performing channels.

 6.     Social Media and Content Marketing Inefficiencies

Social media and content marketing are attractive to SMEs because they promise low-cost outreach, but these areas can become time and budget sinks if not done wisely.

The vast majority of UK small businesses now favour online channels – over 80% use social media to market their business bmmagazine.co.uk – yet not all are seeing a solid return for their efforts.

A common mistake is treating social media as “free” marketing and pouring hours into it without a plan. The outcome is often lots of posts, tweets or videos that reach few of the intended audience. For instance, an SME might post the same content across Twitter, Facebook, Instagram and LinkedIn without tailoring to each platform or considering if their target customer is active there. Such scattergun posting dilutes the impact and wastes the owner’s limited time startupsmagazine.co.uk. In fact, small business owners cite non-work distractions and jumping between apps as major time-wasters – nearly 30% admit they waste time just searching for info or duplicating messages across platforms salesforce.com. All those five-minute tasks of reposting or checking multiple social feeds add up to lost hours that aren’t driving growth.

Another inefficiency is over-spending on social advertising without clear ROI. Social media is the most-used paid channel among SMEs iabuk.com, but it’s also an area many find challenging to execute. The IAB UK’s SME study noted that while lots of small businesses are using paid social, there is high demand for guidance on running effective campaigns iabuk.com.

How to fix it:

• Focus on one or two high-impact platforms.
• Schedule posts using automation tools like Hootsuite.
• Track engagement and conversion metrics, not just likes.

 7.     Understanding Target Audiences and How to Target/Reach them

A lack of audience research and targeting plagues both social and content initiatives. If an SME hasn’t clearly defined its target audience, its social media posts and content may be too generic to drive engagement or conversions.

Marketing agencies observe that not knowing your audience leads to ads that “don’t reach the right people” and thus waste your budget convertwithkurt.co.uk. If your message isn’t reaching the intended audience, it simply won’t drive any action or engagement meaning you wasted time and money producing it.

Businesses suspect that nearly a third of their marketing data is inaccurate on average mdgsolutions.com. Bad data (e.g. wrong customer information, misconfigured analytics, etc.) leads directly to bad budget decisions. 91% of firms believe poor data quality causes wasted marketing spend mdgsolutions.com.

For SMEs, this might manifest as outdated customer lists (leading to mailers or emails sent to dead ends), or misreading website analytics and investing in the wrong campaign.

How to fix it:

• Cleanse and update customer data regularly.
• Use lookalike audiences and retargeting to improve precision.
• Ensure analytics and CRM data are correctly configured.

 8.     Underutilised Tools, Apps, and Misused Services

Many small firms invest in software, subscriptions, or agency services but then fail to utilise them fully, effectively overspending for value they never receive.

A clear example is customer relationship management (CRM) systems: by 2023 about 40% of SMEs had a CRM in place that was used effectively by sales and marketing gatwickdiamondbusiness.com, which means 60% did not. Paying for a CRM license (or any marketing software) and not using it to drive sales is wasted spend. If leads collected from marketing campaigns languish in a database with no follow-up because the CRM isn’t embraced, the marketing effort that generated those leads is squandered too. Likewise, many SMEs use only a fraction of their email marketing or analytics tools’ capabilities, essentially underutilising what they paid for.

Small companies often adopt multiple apps for email, social posting, customer chat, etc., which can lead to fragmented workflows. A recent Slack/Salesforce survey found the average small business owner juggles four different digital tools daily, and this contributes to inefficiency – 29% end up repeating messages across platforms and 30% spend time searching in the wrong place for information salesforce.com.  

In marketing terms, that could mean manually copying the same announcement to Facebook, Twitter, LinkedIn, and email, instead of using an integrated scheduler – eating up time. Or digging through various inboxes to find a customer inquiry. While this is more about resource (time) waste than pure budget waste, it highlights how poor integration and process can drain productivity that could be better spent on strategic marketing thinking. Every hour an SME owner spends struggling with disparate tools is an hour not spent on value-adding marketing activities.

How to fix it:

• Audit all software subscriptions and cancel underutilized tools.
• Train staff to maximise CRM and automation capabilities.
• Use integrated tools to streamline processes.

 9.     Failing to Embrace Artificial Intelligence

Not using or appropriately using generative artificial intelligence to enhance marketing process efficiency results in wasted spend that could be directed to higher returning priorities.

UK SMEs can prevent waste and enhance ROI by strategically adopting generative and predictive AI in their marketing. The stats make a compelling case: from cutting wasted ad spend nielsen.com , to ensuring the majority of your content actually gets used knexusai.com, to leveraging data that 70% of peers struggle with venasolutions.com, to automating tasks and saving 30% or more in costs invespcro.com – AI addresses all these pain points.

By using AI for smarter ad targeting, faster content creation, deeper customer insight, and streamlined workflows, SMEs can reallocate wasted resources into productive marketing that drives growth.

The reward isn’t just in cost savings, but in higher revenues and a stronger competitive position. In a world where marketing budgets are tight and every effort must count, AI is becoming not just a “nice-to-have” but a must-have for small business marketing success. The message is clear: adopt AI and turn marketing inefficiencies into marketing wins, or risk being outpaced by those who do.

AI adoption drives better outcomes for each pound invested. Personalisation and predictive targeting (powered by AI) yield more sales per campaign; generative AI slashes content costs while maintaining or even improving quality; analytics AI finds insights that boost conversion rates; and automation ensures no marketing opportunity is missed due to human limitations. When all these efficiencies are added up, the overall marketing ROI can increase dramatically. It’s telling that more than half of UK SMBs say they are excited to use AI to save time (60% surveyed) and one in five are already using it to improve marketing campaigns enterprisenation.com. They recognize that AI is key to doing more with less. Even small case studies show how effective it can be – for example, several UK SMEs cited earlier (Thread, PhoenixFire, etc.) have used AI to punch above their weight, achieving results on par with larger competitors. AI is essentially an equaliser, giving small businesses access to capabilities (like advanced data analysis or content generation) that were once the domain of big firms with big budgets.

How to fix it:

• Use AI-powered ad targeting to optimise campaigns.
• Leverage chatbots and automated responses to improve customer interactions.
• Implement AI-driven content creation tools to reduce costs.

 10.            Ineffective Company Email Lists

In an effort to get quick results, some SMEs buy email lists or bulk leads. Not only can this be legally dubious under GDPR, it’s also highly ineffective. Industry experts warn that buying email lists is “costly, ineffective, and often illegal” constantcontact.com.

These lists often contain uninterested or fake contacts, leading to extremely low response rates – essentially throwing money at a list and getting nothing back (or worse, getting your domain flagged as spam). It’s a classic example of marketing budget literally yielding no return and even causing harm. SMEs who spend on such shortcuts usually learn the hard way that the money would have been better spent building an opt-in audience or nurturing existing leads.

How to fix it:

• Build an organic email list with opt-in subscribers.
• Segment your list and personalise emails.
• Use A/B testing to improve open and conversion rates.

 11.            Traditional Marketing Waste

A number of businesses will still invest in traditional marketing such as print ads, direct mail, events, local radio, etc. These can work in certain sectors and circumstances, but they also carry higher costs and often less measurable results, making waste a risk.

76% of small businesses do all their marketing online, and 14% still use offline methods like print or events bmmagazine.co.uk. Spending on a newspaper ad or mass-mail flyer often yields a poor return compared to the precision of digital. For those 24% or so who still budget for traditional ads, there’s a danger of overspending on broad-reach media that don’t hit the mark. For example, a local SME might pay hundreds for a print ad that simply gets lost in a magazine or sponsor a trade show booth at great expense but generate only a handful of leads. Without careful targeting (e.g., a very niche publication or a well-chosen event), traditional advertising can become a money pit in the SME context.

Promotional materials and miscellaneous marketing expenses can also generate waste if not managed. Many small companies have closets full of old brochures, branded giveaways, or outdated signage – all money spent on materials that never got fully used. This often stems from over-ordering or not adapting to fast-changing information. For instance, printing 5,000 flyers for a campaign and then changing the offer a month later makes the remaining flyers useless. That money is effectively burned. Similarly, producing an expensive corporate video or glossy brochure might seem like a good idea, but if it doesn’t resonate with customers or gets minimal distribution, the ROI is negative. SMEs must be cautious with big-ticket traditional marketing projects; a lean test-and-learn approach is preferable to avoid large sunk costs.

How to fix it:

• Shift budget from broad reach print ads to digital targeting.
• Use QR codes and tracking links to measure offline effectiveness.
• Optimize event spend by prioritising ROI-driven participation.

 12.            Misallocation Across Channels

SMEs or inexperienced marketers can sometimes be tempted to try a bit of everything – a little print, some Google Ads, a Facebook page, a LinkedIn campaign – without fully funding any one channel to success.

This ‘spray and pray’ approach often means each channel underperforms, and the overall spend doesn’t translate to meaningful results.

It’s inefficient because fixed costs or minimum spends in each channel eat up budget without the benefit of scale. A smarter allocation (backing the winners by doubling down on what works best) would prevent that kind of wastage. In essence, chasing every possible marketing avenue can lead to diminishing returns if an SME lacks the resources to execute each well.

Focusing budget on a few high-performing channels rather than thinly spreading across everything can deliver better results and reduce waste mailchimp.com.

How to fix it:

• Identify your top-performing channels and double down on them.
• Reduce spend on low-performing initiatives.
• Regularly review ROI and reallocate funds accordingly.

Conclusion

Across digital, social, and traditional channels, UK SMEs have faced a common challenge: ensuring their marketing spend isn’t wasted. Key areas of waste include unplanned, unmeasured campaigns; under-optimised digital ads (often losing 25%+ of spend to poor management or ad fraud); scattershot social media efforts that consume time for little return; money spent on agencies, tools, or lists without proper utilisation; and legacy spends on traditional marketing that don’t pull their weight. The cost of these missteps is not just measured in pounds wasted, but also in missed growth opportunities and weaker ROI.

For SMEs operating on tight budgets, cutting out these wastes can free up precious resources. Adopt a clear marketing plan and set performance metrics, focus on data quality and tracking to inform every pound spent, be selective about channels (invest where your audience is, and do it well, rather than everywhere poorly); carefully use generative AI to support execution; and regularly review what’s working versus what’s not. In a climate where every marketing pound matters more than ever, tackling these inefficiencies is crucial. SMEs can reallocate wasted budget into effective strategies – improving their marketing ROI and driving better business results, instead of letting hard-earned funds slip away on ineffective tactics.