Brands wasted over $6 billion in misplaced digital ads last year
Brands spent over $6 billion on ineffective digital advertising in 2023, with close to half of the $14.1 billion digital ad spend across Australia wasted.
This is according to Next&Co’s annual Digital Media Wastage report, which notes that $6.149 billion was wasted on digital ad spend that “failed to further digital advertising objectives”, up more than 17% on 2022.
Next&Co — whose auditing platform Prometheus measures advertising KPIs against actual results — looked at more than 400 companies with digital advertising budget between $500,000 and $21 million. Among these companies is a mix of multinationals (23%), nationals (31%), ASX-listed companies (24%), and small to medium businesses (22%).
The retail sector recorded the highest amount of wasted digital ad dollars, contributing more than $155 million in wasted ad spend. The professional services industry wasted $120 million across 2023, while the finance sector wasted $102 million.
Google ads accounted for 49% of the wasted advertising dollars, with another 41% wasted across Meta’s Facebook and Instagram platforms.
“The annual figures are startling, revealing that of every $10 spent on digital ad spend, $4 is wasted,” Next&Co co-founder, John Vlasakakis, said.
“This data shows that brands are still throwing away billions of critical advertising dollars by failing to understand best practice data use and running campaigns that don’t deliver a strong ROI.”
Vlasakakis notes brands are “relying too heavily on AI and automation to drive their spend, without understanding the platforms and how to best use the data they have”.
Online advertising grew 7.8% year-on-year, according to the IAB Australia Online Advertising Expenditure Report, but Vlasakakis notes a lot of this is still being wasted.
“As we head into the new year, businesses need to undertake an independent assessment of how their ad spend is delivering and look to make changes – fast,” he said.
“Now is the time for brands to really hone their data sets and use data strategically to tap into previous customers and build new audiences.”
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Nathan Jolly is the Deputy Editor of Mumbrella. He joined the team in July, 2023.
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