Technologies are described herein for reducing network bandwidth utilization during file transfer. An application or another type of program identifies embedded objects in a file. The application then replaces the embedded objects with corresponding unique placeholder objects that are more highly compressible than the embedded objects. The application then compresses the file containing the unique placeholder objects. The application then transmits the compressed file to a network service that provides functionality for converting the file format of the file or for processing the file in another manner. The processed file generated by the network service also includes the unique placeholder objects. When the application receives the processed file from the network service, the application replaces the unique placeholder objects in the processed file with the embedded objects from the original file. The application can then open the processed file for viewing, editing, or another purpose.