Advertisers have wasted a record $123 million digital advertising dollars in the second quarter of 2024 – one of the highest quarterly amounts ever recorded, Next&Co’s quarterly Digital Media Wastage report has revealed.
The figure is up a whopping $25 million on last quarter’s ad wastage data and nearly $50 million on the same time last year.
The Q2 data, released by Next&Co, shows wasted digital advertising spend totalled $123.1 million between April and June this year, representing an average of 44 per cent across total audited digital media spend.
The latest ad wastage figure is one of the highest quarterly amounts recorded since the report’s inception, with quarterly ad wastage usually sitting between $70 million to $110 million. 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.
In the second quarter of 2024, 37 companies with digital ad budgets of between $500,000 and $21 million were audited, including multinational (42 per cent), national (357), ASX-listed (11 per cent), and SME (10 per cent) companies.
Retail brands continue to top ad spend wastage
For the second consecutive quarter, the retail sector recorded the highest amount of wasted digital ad dollars again at $48 million. Despite an overall decline in retail spending nationally, retail brands are wasting more advertising dollars than ever – the latest figure is up $20 million on the first quarter data, and more than $8 million in the same period last year. The finance sector recorded the next highest ad wastage figure at $32 million, followed by real estate ($16 million), insurance ($11 million), health ($8.6 million) and education ($7.3 million)
Google tops digital media channel waste list
For the first time in 2024, Google has topped the digital media channel waste list among media channels. In Q2, $55.4 million was wasted on Google advertising – up nearly $20 million on the previous quarter.
Meta’s Facebook and Instagram platforms came in a close second at $52.9 million, which was also up nearly $3 million in Q1, and nearly $7 million in the same period last year. Additionally, $8.6 million was wasted on Bing and $6.1 million on LinkedIn.
“It’s astounding that, given the national cost-of-living crisis impacting consumer spending and shrinking advertising budgets nationwide, digital advertising spend wastage has peaked in the last few months. The digital ad spend waste trend line is definitely moving in the wrong direction and this is concerning,” said John Vlasakakis, Next&Co co-founder.
“Now more than ever, brands need to look closely at their ad performance and really understand their wastage levels. There is no room for wasted advertising dollars – brands must ensure every dollar they are spending is delivering results. In this economic climate, understanding the exact ROI on your advertising spend could be the difference in maintaining client confidence and short and long-term success”.
Next&Co’s auditing platform Prometheus has been used by hundreds of companies across Australia. It can tell advertisers exactly how much, and where, ad spend is being wasted on their digital platforms.
Prometheus has in-built KPIs for 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 is prepared for each.
Prometheus can also predict how many conversions advertisers could potentially achieve and make creative and CPA (cost per acquisition) improvement recommendations.
