News

Over $100 million ‘wasted’ in digital advertising in first quarter of 2024

Over $100 million in digital ad spend went to waste in the first three months of 2024, which accounts for 42% of the total audited digital media spend.

According to new data by digital media agency Next&Co, this represents a 3.85% decline compared to the same period in 2023. 

In terms of industry, retail brands recorded the biggest quarterly ad spend wastage ($28.1 million), with finance companies following closely behind ($26.2 million). Insurance companies took the third spot, with $12.6 million, then the education sector, with $11.6 million.  

The Digital Media Wastage report also revealed that nearly half ($49.5 million) of these unnecessary ads were on Meta’s Facebook and Instagram platforms. Additionally, $38.8 million was squandered on Google, $6.8 million on LinkedIn and $1.9 million on the search engine platform, Bing. 

Complied by Next&Co’s Prometheus proprietary media auditing tool, the data represents the millions of advertising dollars that failed to further digital advertising objectives. 

Next&Co co-founder John Vlasakakis said given the current economic climate, with the cost-of-living crisis affecting overall consumer spending and advertising budgets, brands could be doing so much better if they addressed efficiency in their media spending.

“Businesses need to undertake an independent assessment of how their ad spend is delivering – this audit effectively enables a brand to become ‘recession proof’ by significantly cutting back on wasted ad dollars.”

Next&Co founders Nick Grinberg and John Vlasakakis

However, Gai Le Roy, CEO of IAB Australia – the peak trade association for online advertising in Australia said, at first glance, the wastage calculation of the report seems quite simplistic based on every impression needing an outcome rather than based on synergy across platforms and ad activity.

“I would recommend marketers and agencies review their investment decisions and assessment against the IAB Australia Measurement Framework, the Australian Digital Advertising Practices, as agreed by the IAB, MFA and the Digital Ad Fraud Handbook, she said. 

Gai Le Roy (photo credit: LinkedIn)

 

Next&Co. dispute LeRoy’s definition, telling Mumbrella: “Next &Co uses its Prometheus media auditing tool and wastage is defined as “any cost accrued from digital advertising that has zero influence on any touch point of the conversion journey.

“In addition, Next&Co has a proprietary algorithm which also can determine this for awareness media and well as direct response media. The wastage calculated also includes ad fraud.”

Over 500 Australian companies utilise the platform to monitor how much and where their ad spend is being wasted across various platforms.  

ADVERTISEMENT

Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.

 

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing.