Rethinking Working and Non-Working Spend

While the terminology of “working” and “non-working” spend might suggest a straightforward evaluation of costs, the reality is much more nuanced. The debate over an ideal ratio for advertising spend evolves as marketing practices and media landscapes adapt to market complexity and consumer behavior.

The distinction between working and non-working spend becomes blurred in digital and social media marketing, where content creation and media placement are increasingly integrated. For instance, the content creation for digital platforms can often be as crucial as the media buying itself because digital platforms also serve as content channels.

Some marketers advocate for reducing non-working spend, viewing it as inefficient if it consumes too large a portion of the overall budget. The rationale is to maximize the portion of the budget directly impacting the audience, which is considered more directly productive or “working”.

In 2021, the World Federation of Advertisers (WFA) pointed to an average working spend ratio of 7:3, and this closely reflects R3’s independent benchmarks. From our work with marketers globally, the working to non-working ratio of 70-15-15, where 70% of ATL spend is dedicated to media, with the rest allocated to fees and production, is a good a rule to follow.

It is important to consider that the correct balance between working and non-working spend will vary by company and campaign, influenced by factors like the marketing channels used, the nature of the product or service, and the specific goals of the campaign. Ultimately, best-in-class modern marketing requires flexibility and a meaningful understanding of how each type of spend contributes to overall goals​.