Seeing marketing spend deliver a loss is incredibly frustrating, but thankfully, often fixable. Many Australian small and medium enterprises experience this, especially when growth slows or market conditions change. The key is rapid diagnosis and decisive action. We’ve seen time and again that ignoring a negative return on investment (ROI) only makes the problem worse, draining valuable resources that could be used for profitable growth.

The first step is to stop guessing and start measuring. Too many businesses rely on ‘vanity metrics’ – things that *look* good but don’t translate to sales. We need to focus on true ROI: profit generated divided by marketing cost. If you aren’t tracking this for each campaign, channel, and even ad set, that’s where we start. Accurate attribution modelling is crucial – understanding which touchpoints actually led to a conversion.

Here are some specific actions to take when ROI dips into the red:

• Pause Poor Performers: This sounds obvious, but it’s often overlooked. Immediately halt spending on campaigns or channels consistently delivering negative ROI. Don’t fall in love with your ideas; data dictates what works.
• Refine Targeting: Are you reaching the right audience? A broad net catches a lot of irrelevant traffic. We recommend revisiting your customer personas and using more precise targeting options within platforms like Google Ads and Facebook/Instagram. Consider lookalike audiences based on your best customers.
• Review Your Offer: Sometimes the problem isn’t the marketing, it’s what you’re selling or how you’re presenting it. Is your offer compelling? Is your pricing competitive? A weak offer will undermine even the best marketing efforts.
• Optimise Landing Pages: Sending traffic to a poorly designed or irrelevant landing page is a guaranteed ROI killer. Ensure your landing pages are clear, concise, and directly related to the ad or content that brought the visitor there. Focus on a single, clear call to action.

Don’t underestimate the power of A/B testing. Continuously testing different ad copy, visuals, and landing page elements allows us to incrementally improve performance. While the benefits of these changes might not be immediately apparent, consistent optimisation will compound over time, delivering significant gains. Looking ahead to 2026 and 2027, this continuous improvement mindset will be even more critical as competition intensifies.

The outcome of these actions should be a clear understanding of what’s working and what isn’t, and a marketing strategy focused on profitable growth. If you’re still struggling, consider engaging a marketing consultant for an independent audit of your campaigns. A fresh perspective can often identify opportunities you’ve missed.