Paid media efficiency: How to cut waste and improve ROAS

We’re being pushed harder than ever — expected to hit bigger revenue targets with the same or smaller PPC budgets. Even with flat budgets, rising platform costs mean we’re effectively facing a budget cut.

• Average CPCs have risen by as much as 40%, with an average of 3.74%, per Wordstream. Certain periods, such as Black Friday, see much higher increases.
• Teams are experiencing budget cuts, with average marketing budgets flatlining at 7.7%, according to Gartner.
• Our own account audits show that 20-30% of most accounts’ spend is quietly underperforming.

This is the reality of paid media in 2026. But it isn’t all bad news. Efficiency isn’t just about spending less, it’s about spending smarter. Here’s how to find the waste, fix the fundamentals, and get maximum return from every dollar you invest.

Why efficiency has become the priority

Paid media has shifted dramatically over the last few years, with a greater focus on automation, which has led to hidden data. In parallel, businesses are freezing or reducing budgets while expanding revenue targets, and we’re seeing inflation hit CPCs across most industries, with accounts across our portfolio averaging 10% increases year on year, depending on the industry.

With the expansion into AI-driven automation, this has pushed us further into smart bidding strategies, meaning that where CPCs are rising, you have to be clever with the levers you pull to curtail or minimize these increases.

Meanwhile, customers are spreading their attention across more platforms than ever before, switching between screens and devices, and frequently double-screening.

The question for many businesses is no longer “how do we spend more?” but “how do we get maximum return from every dollar we spend?” Getting that answer right starts with an honest look at where money is being lost.

Auditing for waste: The 20-30% rule

One of the most important (and uncomfortable) truths in paid media is that aggregate metrics hide wasted spend in plain sight.

• A campaign with a 600% ROAS average might have a single product consuming 20% of the budget at just 300%.
• An untouched search term report can contain dozens of irrelevant queries burning through spend, especially when broad match keywords or Performance Max campaigns are in play.
• Settings or targeting that made sense when you first launched your campaigns may not do so now. Consumer behavior shifts, and business objectives develop and change over time. Are your ROAS targets still reflective, for example?

Common waste zones to investigate include:

• Zero-conversion products or keywords.
• Low ROAS/CPL outliers.
• High spend, low ROAS/CPL.

Zero-conversion products or keywords

Products or keywords that receive spend but generate no conversions are generally loss-making. Before drawing this conclusion, apply impression, click, and spend thresholds to ensure sufficient data. 

If a product or keyword has surpassed your target, look to stop spend in these areas. You also want to assess for seasonality and review other contributing factors such as:

• Search term relevance.
• Checkout funnels.
• Competitive advantage.

Low ROAS/CPL outliers

Products consistently below your viable ROAS/CPL threshold are often hidden within blended campaign performance. Use performance bucketing, and set more aggressive targets to control spend and CPCs for these areas.

High spend, low ROAS/CPL

High visibility with low return is a common and costly pattern. Optimize your product feed, and apply more aggressive targets to bring these in line. Again, these products will benefit from implementing product bucketing.

Beyond products, a thorough audit should cover:

• Account-level settings (such as content suitability, scheduling, landing page quality, and device performance).
• Campaign-level detail (including search term reports, cannibalization, negative keyword coverage, bid strategy alignment, and asset performance). 

AI tools can significantly accelerate this analysis. Feeding your data into a well-prompted model can surface patterns that would take hours to identify manually. AI can also help visualize data more clearly and break it down into manageable, easy-to-understand segments.

Full-funnel thinking: Where should your budget sit?

When budgets are tight, funnel prioritization becomes critical. Not all spend is equal, and the hierarchy matters.

Conversion (retargeting, branded terms, exact match)

This is where the highest intent and highest return live. Protect this budget as much as you can, but also assess whether other channels can pick up some of this slack. For example:

• Do you need to spend on brand searches, or can you capture this organically? 
• Can you re-engage better through email?

Consideration (generic search, shopping, social)

For established brands, this is where the majority of the budget will sit, supporting the pipeline. These users have an active need for your product, and you should prioritize appearing for these searches/users. Again, consider the need for paid ads. 

• If you are strong organically, with low competition, can you cut back? 
• Which keywords and products is your budget best spent promoting?

Awareness (social, display, video, audio)

Valuable for long-term brand building, but is usually the first area to be trimmed when budgets are under pressure. 

You should try to maintain a level of branding, or you end up passing the issues down the road, as you are unable to build a future pipeline. In Google Ads, campaign types like Performance Max allow full-funnel targeting.

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Creative is a must-have, not a nice-to-have

Creative is no longer just a brand awareness nice-to-have. It’s directly correlated to campaign success.

Google and Meta campaigns rely heavily on creative variation to test and optimize. Without sufficient variants, the system runs out of testing capability, and performance plateaus over time as frequency increases.

Campaign types such as Performance Max (Google Ads), GMV Max (TikTok), and Advantage+ (Meta) are heavily restricted without sufficient creative. This results in inefficient spending.

• Variety is a system requirement: Platforms need multiple creative variations to identify what works for each auction, audience, and placement. If you don’t supply enough variety, you risk performance decline.
• Fatigue is accelerating: With AI-generated content flooding the digital landscape, audiences are tiring of ads faster than ever. For most categories, refreshing creative at least every four to six weeks is now the baseline.
• Quality beats quantity: Variation is valuable, but one clear, well-crafted message will outperform ten low-quality. Know the purpose of each ad, and who it’s for before.

AI can support creative production, but strong messaging and strategic clarity still matter most.

Attribution and measurement: Getting honest about what works

Platform attribution has become more fragmented and broken over the years, but many advertisers are unsure how to address this and move forward.

Elements such as cross-device behaviors, iOS privacy changes, consent mode, and GDPR, modeled data, plus the platform’s bias toward claiming conversion credit mean that in-platform numbers should be treated as optimization signals, and not sources of truth.

Using blended metrics gives a cleaner picture of actual efficiency, and can help you establish how your paid media efforts are working:

• Marketing efficiency ratio (MER): Total revenue divided by total ad spend. A single, honest view of overall paid media efficiency.
• New customer acquisition cost (nCAC): Total spend divided by the number of new customers acquired. Shifts focus from retention to business growth.
• CLV:CAC ratio: Sets a strategic ceiling on customer acquisition costs. A ratio of 3:1 or above is the benchmark to aim for.

Building a reliable measurement framework follows a clear sequence: fix your base tracking first, build a blended view of performance, use in-platform data for optimization signals only, and apply incrementality testing when making significant budget decisions.

Incrementality testing allows you to use treatment and holdout groups to clearly establish whether a new campaign or platform launch, for example, has added incremental value.

Automation and AI: Efficiency with guardrails

AI and automation offer real efficiency gains, but only when applied with thought and control. The biggest mistake is automating decisions that require strategic judgment, or removing human oversight from areas where context matters.

Safe to automate:

• Bidding strategies.
• Budget pacing alerts.
• Data-backed budget adjustments.
• Product labeling and exclusions.
• Scheduled reporting and data visualization.
• Competitor ad monitoring.

Keep human oversight:

• Channel strategy.
• Audience targeting.
• Creative strategy.
• Targets and KPIs.
• Campaign launches.
• Interpreting significant performance changes.

Scripts for product bucketing are a particularly high-value area of automation. Automatically labeling products based on performance criteria allows for continuous, data-driven management without manual intervention.

Performance Max: When to use it (and when not to)

PMax works well when you have a strong product feed, sufficient conversion volume, high-quality assets, clear audience signals, an appropriate budget, and effective conversion measurement in place.

Without these conditions, the risks can be high, and can hide troublesome metrics among the averages. This can include:

• Cannibalization of brand search.
• Over-indexing on existing customers.
• Loss of product-level control.

Get the foundations right before leaning into automation.

Getting the most from AI bidding strategies

Choosing the right bidding strategy matters as much as setting it up correctly:

Strategy	When to use	Watch out for
Target ROAS	30+ conversions/month with a clear ROAS target	Too high throttles spend; too low creates wasted traffic
Target CPA	Lead generation, where dynamic revenue isn’t tracked	Works best with consistent CPA; wrong targets cause delivery to spiral
Maximize Conversion Value	When you lack sufficient data to set a ROAS target	No bid ceiling, monitor CPCs and budget closely
Maximize Clicks	Upper funnel only, where traffic volume is the goal	Ignores the bottom of the funnel entirely

The highest-leverage moves for paid media efficiency

If your paid media budget is under pressure, the highest-leverage moves are:

• Run a waste audit: Find the 20-30% that’s underperforming.
• Protect lower-funnel spend: Conversion-focused campaigns should be the last to be cut.
• Refresh creative more frequently: Creative fatigue is costing performance in ways that aren’t always visible in the numbers.
• Move to blended measurement: Get honest about what’s working across channels, not just within platform dashboards.
• Automate selectively: Use AI for what it does well, and keep human judgment where it counts.

Done well, efficiency can give you a competitive advantage, and it’s available to any team willing to look honestly at where their spend is actually going.

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