An average of 39 per cent, or around $54.3 million, in digital media advertising expenditure was wasted in between July and September this year, according to the latest quarterly Next&Co Digital Media Wastage Report.
The data is compiled from Next&Co’s recently launched Prometheus proprietary media auditing tool, which in an initial analysis, found that almost a third – or $3 billion – of digital ad spend was wasted annually.
The 1 July to 30 September 2021 report audited 67 brands from the pharmaceutical, real estate, finance, retail, insurance and education sectors, across ASX-listed, multinational, national and SME companies. Media budgets for these companies ranged from $500,000 to $27 million.
Wastage in the retail sector was largest at more than $15 million. It was followed by finance, with $12.7 million wasted, real estate ($10.3 million), insurance ($8 million), pharmaceuticals ($4.8 million) and education ($2.7 million).
Across digital media channels, the most digital ad spend was wasted on Facebook at $25 million, then Google at $20 million, Bing at $8 million and LinkedIn at $4 million.
Next&Co Co-founder, John Vlasakakis, said the wastage problem highlighted a critical issue in the market.
“Many brands are simply spending their digital advertising budgets in the wrong places and not harnessing the right platforms for their campaigns,” he said.
“The answer is regular, independent media auditing. These audits allow companies to find the spend that is not attributed to a conversion, and then look for opportunities to scale their media spend in areas that are working. Audits are all about providing brands with an immediate and long-term roadmap for performance and channel strategy – it allows them to really consider whether their current agency is delivering results and if not, find new avenues to pursue.”
Auditing platform Prometheus has now been used by more than 300 companies. 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.
The Next&Co Digital Media Wastage reports will be released quarterly.
