Digital ad spend waste in the April to June quarter is down more than $30 million on the first quarter of 2023, but brands are still wasting nearly half of their advertising dollars each quarter, Next&Co’s latest quarterly Digital Media Wastage report has revealed.
Advertisers threw away $77.1 million of their ad spend budgets last quarter, which represents an average of 40% wastage across total audited media spend, compared to more than $104 million between January and March 2023.
Despite the decline, average wastage remains on-par with 2022 figures, which revealed 41% of overall digital ad spend was wasted across the year.
The latest data, collated from April to June 2023, represents the millions of dollars that failed to further digital advertising commercial objectives over the past three months across the real estate, finance, retail, health, insurance and education sectors.
In the past quarter, Next & Co audited 33 companies with digital ad budgets of between $500,000 to $21 million, including multinational (42%), national (33%), ASX-listed (13%), and SME (12%) companies.
Retail brands top the wastage list
The data, compiled from Next&Co’s Prometheus proprietary media auditing tool, found retail brands wasted the most digital ad dollars at $25.4 million, followed by finance at $22.3 million, insurance at $12.3 million and health at $7.7 million. Education and real estate brands had the least waste at $5.3 million and $3.8 million respectively.
Google tops media channel waste
Across digital media channels over the last quarter, most digital ad spend was wasted on Google at $33.9 million, followed by Facebook ($31 million), LinkedIn ($7.7 million) and Bing ($3.8 million).
Next&Co Co-founder, John Vlasakakis, said: “As we enter the new financial year, many brands will be taking stock of their advertising budgets, particularly amid ever-increasing economic and inflationary pressures. The latest data shows there is still plenty of room for improvement in terms of how brands are spending their advertising dollars.
“As we head into campaign planning for the biggest retail events of the year, with Black Friday, Cyber Monday and Christmas, businesses need to get a sound understanding of the efficacy of their digital ad spend, and a better measure of return on investment.
“An independent audit of overall planned spend and past spend can reveal insights into where wastage is occurring, how to get better campaign optimisation and results, and how dollars can be best spent. The new financial year will be about businesses working smarter, not harder, particularly as budgets come under pressure, making every ad dollar count in the coming months.”
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.
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.