Brands wasted nearly $100 million in digital ad spend in the first quarter of 2024, Next&Co’s quarterly Digital Media Wastage report has revealed.
Wasted digital advertising spend reached $97.1 million between January and March this year – an average of 42 per cent across total audited digital media spend. The report said the most digital ad spend was wasted on Meta’s platforms Facebook and Instagram, although these are two of the largest platforms that attract a large chunk of digital ad investment.
The figure is slightly down on the same time last year, where overall ad spend wastage reached $104 million for the quarter, comprising 43 per cent of the overall digital media spend.
Despite the dip in figures, the data shows brands are still wasting significant advertising dollars.
Next&Co’s annual Digital Media Wastage report found that brands wasted a record $6.149 billion in 2023, representing nearly half (43 per cent) of the $14.1 billion invested in digital advertising Australia-wide.
The data, compiled from Next&Co’s Prometheus proprietary media auditing tool, represents the millions of advertising dollars that failed to further digital advertising objectives across a range of verticals, including real estate, retail, insurance, finance and FMCG. This includes ad fraud.
In the first quarter of 2024, 33 companies were audited, with digital ad budgets of between $500,000 and $21 million, including multinational (45 per cent), national (35 per cent), ASX-listed (10 per cent), and SME (10 per cent) companies.
Retail brands record most wastage
The retail sector recorded the highest amount of wasted digital ad dollars for the first quarter of the year, at $28.1 million. The figure, however, is down on the same period in 2023, where retail brands notched up $40.6 million in wasted advertising spend.
The finance sector came in second in the first quarter of 2024, at $26.2 million, followed by insurance ($12.6 million), education ($11.6 million), health ($9.7 million) and real estate ($8.7 million).
Across digital media platforms, the most first quarter 2024 ad spend was wasted on Meta’s Facebook and Instagram platforms at $49.5 million – an increase on the $45 million recorded in the same period in 2023.
Additionally, $38.8 million was wasted on Google, while $6.8 million was wasted on LinkedIn and $1.9 million on Bing.
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 simply addressed efficiency in their media spending.
“Wasted advertising dollars have a flow-on effect across the business, affecting everything from day-to-day operations to recruitment, production and more. Brands could improve their overall budget and costs by investing in better understanding their digital advertising platforms and audiences.
“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.”
