Stat of the Week. Nonworking spend, meaning agency fees, content production, marketing technology, data and analytics, campaign strategy, measurement, and overhead, runs at 20% to 45% of the total marketing budget across industries. It’s also the part of the budget that rarely gets scrutinized with the same rigor as media. (BCG, June 2025.)
The request to cut costs usually comes before there’s a real plan. When revenue drops and budgets tighten, marketing is told to do more with less. This often leads to debates about how much to cut, but rarely does anyone ask what the budget actually includes.
Asking what makes up the budget is more helpful and leads to better answers. In a tough year, arguing to keep the same budget size rarely works. Instead, focus on changing how the budget is used. The funds you need are already there.
The default approach is measurably expensive
Let’s look at the usual reaction, since it’s worth considering. A 2023 BCG brand analysis found that cutting marketing budgets during uncertain times causes long-term harm to sales growth, conversion, market share, and shareholder return (BCG, June 2025). The harm doesn’t show up right away. Savings appear in the current quarter, but the real costs show up in later years.
This doesn’t mean marketing budgets can’t be reduced. The key point is that cutting everything by the same percentage removes both valuable demand generation and waste, often before anyone decides what’s what. In a tough year, you still need to find savings, but simply cutting by a flat percentage is the least thoughtful way to do it.
A fifth to nearly half of potential savings sits outside media
There’s a clear answer to what makes up the budget, and it’s often bigger than teams expect. BCG says nonworking spend makes up 20% to 45% of the total budget, including agency fees, production, marketing tech, data, analytics, campaign strategy, measurement, and overhead (BCG, June 2025). Working spend, which is the media itself, usually makes up 55% to 80%. These ranges overlap, so they don’t add up to 100%. BCG also points out that returns are usually measured in the working spend.
McKinsey makes a similar distinction within media spending. Working media spending depends on how many people see your ads, how often, and the quality of those ads. Nonworking media spending covers the creative, production, and research that go into making the ads, and isn’t tied to how many people see them (McKinsey, 2018). BCG’s definition is broader, including marketing tech, data, measurement, and overhead, but McKinsey’s version is a more focused look at media spending.
These two definitions help explain a common habit in budget planning. The part of the budget that’s measured gets reviewed every quarter, while the unmeasured part is often left alone, year after year. This can lead to a fifth to nearly half of spending being based on old habits. BCG gives both ranges but doesn’t share its sample or survey details, so you’ll need to check your own numbers. Most teams haven’t done this analysis.
Where the nonworking money actually goes
The ways to save money aren’t flashy. BCG points out that many costs come from old processes that haven’t been reviewed in years. Their list starts with combining vendors, especially where advertising and marketing agencies overlap (BCG, June 2025). It also includes reviewing internal processes like how brand briefs are developed, setting rules for production versus media spending, and changing the operating model, such as bringing some work in-house or offshoring simple tasks.
McKinsey’s zero-based approach shows what these savings can add up to. One EU consumer goods company reviewed over 50 spending categories and improved spending efficiency by 15%, with more than 70% of the savings coming from nonworking media levers (McKinsey, 2018). This is just one example, reported by McKinsey, but it shows that these results are possible. The key takeaway is that most of the savings came from outside the media spend.
Content production is another area BCG highlights, where some brands spend too much on work that doesn’t reach many people. Accenture’s work with Telefónica shows how automation can help: they produced over 300 pieces from a simple template in two days, compared to about 40 assets in several weeks before (Accenture). Accenture says this saved 83% in costs. While asset count and marketing value aren’t the same, this example shows how much production costs can drop with better design.
When one hotel group had a slow first half, they cut 12% from media spending in every market, thinking it was fair to share the pain. But they left agency fees, retainers, and production untouched, since those didn’t have clear performance numbers. The cut only affected the measured part of the budget. A year later, nonworking spend made up a bigger share of a smaller budget, making things worse. The savings just went into the general budget and didn’t fund anything specific. No one was careless; they just cut the easiest line.
Reallocate, then lock it in
Most programs miss the final step. If savings aren’t quickly reassigned, they quietly disappear into the general budget, turning the whole process into just another budget cut with extra paperwork.
BCG gives an example from a global apparel and footwear company. Over a year, the company tracked its spending, found savings in both working and nonworking areas, and redirected those savings to social content and brand-building (BCG, June 2025). The key was making sure the new allocation was built into their operating model, so it would last through future planning cycles.
Reinvesting savings also helps make your case internally. You can show where a fifth of the budget was going and suggest a better use for it. This is a stronger argument than just asking to keep your current budget.
Two things to accomplish before the planning cycle starts
Check your budget split. Ask finance for your working and nonworking totals from the last two years, as a percentage of the budget. Most marketing teams haven’t seen this breakdown. The trend is more important than the exact numbers, since a rising nonworking share means old habits are shaping your budget.
Decide what you’ll do with the savings before you propose a cut. Clearly state what the freed-up money will fund, with a specific number, in the same meeting where you suggest the reduction. Savings with a clear purpose are more likely to last through the planning cycle.
Being told to do more with less is common in tough years, but it’s not all bad. This challenge forces marketing teams to ask important questions they might otherwise avoid. Teams that tackle it often end up with a budget that’s only a little smaller but much better organized.
If you had to cut one budget line, which would it be? And what would you use those savings for? Share your answers.
Sources
BCG, “For CMOs, the Future Starts with Smarter Spending,” June 2025 (BCG states the 20–45% nonworking range, the 55–80% working range, and the nonworking lever list bare, with no disclosed sample or survey base; the only survey disclosed in the article is a separate GenAI C-suite poll, and BCG’s one methodological tag, “in our experience,” is attached to a different claim, the 10–30% total-spend unlock, which this article does not use. The 2023 brand-analysis finding on cutting during uncertainty is BCG’s own prior research, cited within this article. The four-part program is one client’s case, not a prescribed BCG method).
McKinsey, “Zero-based productivity—Marketing: Measure, allocate, and invest marketing dollars more effectively,” August 2018 (the working/nonworking definition, which McKinsey scopes explicitly to media spending; the 15% efficiency gain with more than 70% of opportunities from nonworking media levers is a single unnamed EU consumer-packaged-goods client, realized and self-reported by McKinsey, labeled as such in-article).
Accenture, “Telefónica paints the town with “Kisses”,” undated (vendor-authored case study, n=1, published by the firm that delivered the work; no methodology, baseline, or measurement window disclosed. Only the 300-pieces-in-two-days versus 40-in-several-weeks comparison and the campaign-scoped 83% cost saving are used).