As digital advertising expenditure reaches new records, advertisers continue to waste their ad dollars, with more than $134.3 million set to be wasted in the January to March 2022 quarter, an average of 40% media spend waste, according to the latest Next&Co Digital Media Wastage Report.
The latest data eclipses the digital ad spend wastage figure of $104.3 million for the six months between July and December last year.
In its latest report, independent digital media agency Next & Co audited 81 companies with digital ad budgets of between $500,000 to $39 million across a mix of ASX-listed, multinational, national and SME companies.
The data, compiled from Next&Co’s Prometheus proprietary media auditing tool, found that brands in the retail sector will report the most digital ad spend wastage, of almost $31 million.
It was followed by insurance at $28 million, finance ($25.5 million), real estate ($18.8 million), education ($16 million), and health ($14.7 million).
Across digital media channels, the most digital ad spend will be wasted on Facebook at $52 million, followed by Google at $43 million, LinkedIn at $28 million, and Bing at 10.7 million.
During 2021 Next&Co reported that $3 billion of digital ad spend was wasted annually, failing to be effective in achieving digital advertising commercial objectives.
Next&Co Co-founder, John Vlasakakis, said: “It’s alarming to see higher levels of digital ad spend wastage this year, especially as digital spend soared to new highs in 2021, surging by 35% to reach almost $13 billion.
“Prometheus has now audited more than 500 brands, with all showing varying levels of wastage across industry categories – brands need to become more aware of the dangers complacency breeds.
Spending smarter and not harder needs to be the attitude amongst brands of all sizes as this is how scale and company growth can be achieved.
“Procurement also needs to provide more negotiating power to marketing. For example, the fact that one financial services provider had procurement negotiate the cheapest rate but allowed for a clause for the agency to never be audited during their three-year term gobsmacked me, if that isn’t a red flag, I don’t know what is. Digital marketing activity isn’t occurring above board, and they are now powerless to take action.”
Next&Co’s auditing platform Prometheus has now been used by more than 500 companies across Australia. It has the ability to tell advertisers exactly how much, and where, ad spend is being wasted on their digital platforms.
Prometheus has in-built KPIs advertisers, including leads, customer conversions, ROI, and reach, enabling brands to choose their targets across each metric. The auditing tool then determines the exact wastage of their total annual digital spend in dollars and where that wastage is occurring, campaign-by-campaign, and on a creative level.
It provides a score out of 100 on the overall performance of each metric and the exact dollar figure of ad spend wastage. The data is then individually audited for each type of advertising activity run within the tool and an individual score prepared for each.
Prometheus can also predict how many conversions advertisers could potentially achieve and make creative and CPA (cost per acquisition) improvement recommendations.