Working vs. Non-Working Marketing Spend: A CFO’s Guide to Hidden Profit in Your Marketing Budget

In this post, you’ll learn how to identify working vs. non-working marketing spend and how doing so can change the way you see the marketing budget forever.

But first, let’s look at a common issue CFOs of mid-sized companies have.

Your marketing team says they need more budget. Your CFO instincts tell you they need to be more disciplined.

Here’s what neither of you may see: up to 80% of your marketing dollars may never reach customers.

The problem isn’t about your marketing team’s competency or whether to invest in marketing.

Structural inefficiency plagues most small businesses and mid-market companies, draining hundreds of thousands of dollars annually.

The distinction between working and non-working marketing spend shows where those dollars disappear and how to redirect them without changing your total marketing budget.

As one example, a 2025 Secured Research study cited in Small Business Finance Insights analyzed 175 commercial finance organizations and found top-quartile performers achieved 73% lower customer acquisition costs (CAC) and added 2–3 points to their bottom line.

These companies didn’t spend more. They optimized existing marketing dollar allocation.

“Top performers recovered CAC in 7.4 months vs. 19.2 months for bottom quartile…and captured 3.8x the industry average in new business.”

— Secured Research, SB-FI.com

What is working vs. non-working marketing spend?

Working spend represents dollars that directly create customer impressions, engagement, or conversion. For example, when you invest $50K in LinkedIn ads that generate 200 qualified leads, that’s working spend. The money reached prospects and moved them through your funnel.

Non-working spend represents dollars consumed before reaching any customer. These are the indirect marketing costs incurred in producing, coordinating, revising, and managing marketing activities rather than the activities themselves.

For a typical $500K campaign budget, you might assume most of that marketing investment goes toward customer-facing activities. But the reality often looks different.

Agency fees and management overhead consume $75K of the budget. Creative development costs for rework due to unclear messaging take another $60K. A mid-campaign pivot to correct positioning wastes another $45K. Marketing technology and integration work cost $35K.

What reaches customers? Around $285K, or 57% of your marketing expenditure.

Four categories of non-working losses

Non-working costs accumulate in four categories in mid-market companies.

Process tax

Process tax refers to money lost from lack of clarity.

Expert research shows this “tax” represents about 15-20% of marketing spend.

Examples of this expense include rework, revisions, and do-overs due to unclear brand direction. Also included is the cost of producing scrapped content, creative assets undergoing multiple changes, and repositioned campaigns.

Vendor friction

Vendor friction accounts for another 10-15% of wasted money, including overlapping tools, agency costs, and coordination expenses.

Many mid-market companies work with multiple marketing agencies or freelancers without a unified brand direction, leading to duplication and wasted effort.

Strategic churn

Strategic churn consumes 8-12% of financial resources when marketers abandon initiatives or pivot mid-campaign due to unclear marketing strategy. The result is a constant cycle of trial and error instead of executing based on a defined brand position.

Misalignment between marketing and sales

Another 5-10% of waste occurs when sales teams don’t use marketing content or follow up on campaigns because they don’t reflect how deals close. When your brand strategy doesn’t align with your go-to-market execution, marketing creates assets that sales never use.

Mid-market companies struggle with this issue more than larger businesses. Unlike enterprises with dedicated brand teams and processes, mid-market companies lack the infrastructure to prevent these leaks. However, this can be good news because the problem is easier to fix once discovered.

Brand clarity as your financial control point

Most CFOs don’t realize that non-working spend isn’t fundamentally a marketing problem.

It’s a brand clarity problem with financial consequences.

When your brand strategy is vague, inconsistent, or outdated, the marketing team creates different campaign approaches because they don’t know which positioning will resonate with the target audience.

Two approaches get vetoed after you’ve invested in creative development. Sales rejects marketing’s messaging because it’s “not how we actually sell,” leaving content and assets unused.

Agency A and contractor B produce conflicting materials, requiring a project manager to reconcile everything, adding overhead. Your CMO changes direction every quarter, looking for “what works,” and more waste accumulates.

A brand audit is a financial diagnostic that maps every dollar to one of three categories:

• Brand-aligned and working

• Brand-aligned but non-working

• Misaligned and wasted

A brand audit reveals decision points where non-working dollars enter your system and quantifies the cost of brand confusion.

Let’s use a typical mid-market company with a $5M marketing budget as an example.

Before a brand audit, working spend (the budget portion directly reaching customers through paid, owned, and earned media) is around 55%. That means only $2.75M is customer-facing.

After the brand audit, resources have been allocated. The company expects 70–75% of its budget to classify as working spend, meaning $3.5M–$3.75M is reaching prospective customers.

That’s up to $1M in additional customer-facing activity without increasing budget. If audit fees reach $75,000, the return on investment on the brand audit is 1,233.33%.

Here’s the brand audit ROI calculation:

1. Working Spend Improvement

• Before audit: 55% of $5M = $2.75M

• After audit: 75% of $5M = $3.75M

• Gain: $3.75M − $2.75M = $1M in additional customer-facing activity

2. Audit Cost

Cost: $75,000

3. Net Profit

Net gain = $1M − $75K = $925,000

4. Correct ROI Formula

ROI = (Net Profit / Cost of Investment) × 100 ROI = ($925,000 / $75,000) × 100 ROI = 12.3333 × 100

ROI = 1,233.33%

The impact flows directly to core metrics. Studies show that brand clarity and strategic alignment can reduce customer acquisition cost (CAC) by 30–35% by eliminating friction, misaligned messaging, and wasted spend.

When marketing dollars work harder, fewer are needed to acquire each customer.

The three questions every CFO should ask

Three questions will reveal if you have a non-working spend problem and quantify its impact.

“What percentage of our spend reaches customers?”

This reveals the working to non-working ratio. Best-in-class mid-sized companies achieve 70-75% working spend. You can’t reduce non-working spend if your team can’t answer this with data.

Categorize every line item: Paid media channels counts as working. Agency fees for account management are non-working. Advertising production costs are working. Production spending on scrapped concepts is non-working. Marketing technology platforms are non-working unless they directly generate customer touchpoints.

“What’s the cost to fix brand misalignment issues?”

Look for rework and revision costs and approval times. Slower approvals cost more.

When creative agencies charge more for “revisions” than original content, you’re paying for brand confusion.

Using multiple agencies without a unified brand direction wastes resources because each vendor interprets your brand differently, resulting in conflicting materials.

“Which marketing investments are driving our best customers?”

If marketing can’t identify which investments convert valuable customer segments, non-working spend becomes invisible. Brand clarity makes attribution reliable by creating consistent customer journeys.

When prospects see the same value proposition in your ads, website, and sales conversations, you create measurable paths from marketing investment to closed revenue.

How to commission a brand audit

You have two approaches to answer the three questions above.

The internal approach involves a two-week collaboration between marketing and finance. Finance brings the P&L perspective and spend categorization while the marketing team brings campaign knowledge and performance data. Together, you map every dollar and classify it as working or non-working.

With the external approach, you hire a brand audit firm for objective analysis. This works well for board-level credibility or when your team lacks time.

The cost for a professional audit varies from $15K-50K or more, depending on company size and marketing complexity.

In contrast to the typical 20-50% annual waste recovery, the ROI on an audit makes this one of the fastest-payback analyses.

The audit deliverable should show your spend, from total budget to customer impact, and a reallocation plan to redirect recovered dollars into high-performing channels.

Converting non-working to working spend: The 90-day budget action plan

Once you identify non-working spend in your budget, three immediate actions create momentum.

First, establish the working spend ratio as a KPI, alongside CAC and LTV. What gets measured gets managed.

Next, consolidate brand decision-making so one voice owns positioning, messaging, and visual identity. Diffused brand authority is the biggest driver of non-working spend.

Implement a brand alignment gate where no creative spending is approved without alignment to your core brand strategy.

Within 30 days, audit your agency and vendor roster for redundancy. Mid-sized companies find consolidation opportunities. Shut down resource-consuming projects despite misalignment. Standardize brand assets like templates and messaging frameworks to eliminate redundant custom work.

The 60-90 day transformation redirects recovered dollars into proven channels for top-performing acquisition, expansion, and retention programs.

Renegotiate agency relationships around marketing performance instead of activity, tying compensation to outcomes. Standardize this process for future vendor contracts.

Whether you’re selling software, services, or consumer goods, brand clarity improves revenue flow. Reallocating the existing budget—not increasing it—can unlock efficiency, reduce acquisition costs, and expand margins.

Making marketing a measurable investment

CFOs who master working and non-working spend must have the brand clarity that fuels change.

The strategic advantages compound over time. While competitors debate their budgets, you’re optimizing every dollar. While others chalk up 40-50% of non-working spend as “the cost of doing business,” you’re putting 75% of your budget in front of customers. That efficiency gap creates market share growth that’s hard for competitors to match.

Start with the three questions above. Commission the audit, internal or external. You’ll have your answer and roadmap within 30 days.

Companies that treat brand clarity as financial discipline instead of a creative process turn marketing into a competitive advantage.