60% of Digital Marketing Dollars Are Wasted on Poor Targeting

The Problem Is Not Effort, It’s Precision

Many financial institutions continue to struggle to connect spend with results. Campaigns launch on time. Creative looks polished. Channels are active. Still, performance lags expectations.

Industry research suggests that up to 60% of digital marketing dollars are wasted, largely due to poor targeting, poorly-timed outreach, or messages delivered to the wrong audience.

Where the 60% Comes From

Research from management and advisory firms has consistently shown that a significant portion of marketing spend fails to produce measurable impact. The root causes are rarely creative or channel-related. Instead, they stem from:

• Overly broad audience definitions
• Reliance on static demographics
• Limited insight into timing or readiness

In financial services, these challenges are magnified. Products are complex. Customer needs change quickly. And broad outreach strategies often prioritize reach over intent.

Why Financial Institutions Are Especially Vulnerable

Many banks still rely on familiar targeting approaches:

• Purchased prospect lists
• Age, income, or geography-based segmentation
• Product-agnostic campaigns

While these methods feel safe, they often overlook a critical factor: readiness.

Two customers with identical demographics may be in very different financial situations. One may be actively considering a new product. The other may not be remotely interested. When both receive the same message, waste increases.

Why Better Offers Do Not Fix Poor Targeting

When performance disappoints, the instinct is often to adjust the offer or refresh creative. While these changes can help at the margins, they rarely solve the underlying problem.Without better targeting:

• Increased frequency amplifies waste
• New creative reaches the same unqualified audience
• Additional channels multiply inefficiency

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A “qualified prospect” is not the same as a ready customer.Eligibility answers the question: Can this customer buy?
Readiness answers the question: Is this customer likely to act now?

‍Readiness is signaled through:

• Account behavior
• Product usage patterns
• Balance changes
• Life-stage indicators
• Financial activity over time

A $9B financial institution set a goal to generate $50 million in HELOC line increases. Rather than relying on broad prospect outreach, the bank focused on identifying households most likely to act.

The strategy used four planned communication waves, starting with existing customers and expanding only where data indicated readiness. By the third wave, the program had already delivered $56 million in approved increases, with momentum toward $74 million by year-end.

The key shifts were straightforward:

• Start with existing customers, where ROI is highest and data is strongest
• Model likelihood of need, using equity, product usage, and behavior—not demographics alone
• Coordinate channels, so mail, email, digital, and retargeting reinforced each other
• Use specific numbers, such as available line amounts, to improve relevance

By narrowing the audience to those most likely to respond, the institution reduced wasted outreach while accelerating performance, showing that precision, not scale, is often the most effective way to grow.

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Improving targeting does not require larger budgets. In many cases, reducing waste delivers greater impact than increasing spend.

• Better targeting raises engagement
• Higher engagement improves conversion
• Improved conversion lowers cost per account