What are wastage?

In advertising, the definition of wastage or dispersion is when a marketing measure reaches people who do not belong to the target group. They are often not interested in the advertised product or it is not an option for them for various reasons. The lower the wastage, the more effective the marketing activities are.

The higher the wastage, the higher the actually avoidable costs of advertising material. The ideal marketing measure shows almost no wastage and only reaches people who belong to the direct target group.

Through targeted measures and planning, such as targeting, segmentation or a precise target group analysis, wastage can be reduced right from the start. Choosing the right medium is also extremely important. Internet grouches, for example, tend not to be reached through social media campaigns.

Target group analysis and addressing

At the beginning of every marketing measure there is a detailed target group analysis. This also serves to minimize wastage. First, a distinction should be made between target group analysis and target group definition. When defining target groups, a group of people is determined and narrowed down who are relevant for the company as potential customers. In the target group analysis, specific data and details are collected about this group. The definition of the target group should always come before the analysis, after all, you cannot analyze what you do not know.

In marketing, a target group is a group of people who react differently or more homogeneously to advertising measures than the overall market. Target groups initially have similarities in purchasing behavior. With methods of market research and behavior analysis, the behavior of the special target group can be analyzed and thus partially predicted. The more precisely the target group has been narrowed down and analyzed, the easier it is to design marketing measures that reach this target group.

The following characteristics determine the target group in B2C markets:

  • demographic characteristics (age, gender, family status, place of residence, etc.)
  • socio-economic characteristics (level of education, salary, occupation, etc.)
  • psychographic characteristics (attitude, motivation, opinion, etc.)
  • Buying behavior (price sensitivity, buying range, etc.)

Anyone who knows where their own target group is and which products they are consuming can advertise their own products precisely and with the least possible wastage. This reduces the costs for advertising measures.

The target group analysis also results in specifications for a targeted target group approach. Different social groups also require different approaches. This starts with simple decisions such as the Duzen or Siezen, the chosen tonality, color language, etc.. If mistakes are made here, the targeted target group does not feel addressed and wastage increases. In online marketing in particular, where targeting can actually target the selected target groups precisely, such inaccuracies or misjudgments are more than annoying.

Scatter losses and online marketing

In online marketing, target groups can sometimes be addressed much more precisely and with less wastage than in traditional media. Individual approach can take place in the following ways, among others:

  • Personalized Ads
  • Personalized landing pages
  • Personalized email marketing

In the best case scenario, wastage is reduced to a minimum because visitors or customers are presented with exactly the offers they are looking for. He is also addressed exactly as he expects, is used to and would like to be addressed.

The measurement of success is also better in online marketing than in offline marketing, which also reduces the avoidance of future wastage. Monitoring tools and tracking processes can be used to precisely check how potential customers react to advertising measures or how the route to a designated landing page can be traced. Of course, the data protection aspect must always be taken into account, because many tools work with cookies, which are increasingly restricted in their evaluation.

Less wastage through SEO

According to gradphysics.com, the search engine optimization (SEO)in itself significantly reduces wastage. The more precisely a website is optimized for certain keywords, the higher the probability that only prospects who are also looking for exactly these products will land on it. An Internet user who ends up on a page that does not offer exactly the products or services that he expected with his search query can therefore be viewed as wastage, since it is highly likely that he will jump off immediately. Successful search engine optimization therefore not only creates new contacts within the target group, but also massively reduces wastage. In the next step, points such as optimized usability and conversion optimization also play a role, as this means that even fewer potential customers drop out.

Examples of low and high wastage: newsletters vs. TV advertising

Ideally, TV advertising can reach millions of viewers. But of course the costs and wastage are correspondingly high here. Over half of the TV viewers switch to advertising or switch off, only nine percent stay during the commercial break. (Source: https://de.wikipedia.org/wiki/Fernsehwerbung#Zahlen_zur_Fernsehwerbung) Even with this group, however, there are still considerable wastage, as the targeted target group is rarely completely congruent with the actual audience group.

In contrast, many online marketing tools are much more efficient, for example email marketing via newsletters. The costs are significantly lower here, even if recipient lists are associated with costs. Depending on the industry, click rates between two and nine percent are achieved. More on this in the study on click rates and open rates in email marketing by Sendinblue.

What are wastage