Brands threw away a record $6.149 billion digital advertising dollars in 2023, up more than 17%, according to Next & Co’s annual Digital Media Wastage report.
This represented more than four out of ten (43%) dollars of the $14.1 billion invested in digital advertising nationally.
Next&Co audited more than 400 companies with digital ad budgets of between $500,000 to $21 million, including multinational (23%), national (31%), ASX-listed (24%), and SME (22%) companies.
The retail sector recorded the highest amount of wasted digital ad dollars for the second year in a row, with more than $155 million of wasted ad spend. The figure eclipses the $80.4 million wasted by retailers in 2022.
The professional services was the next highest at $120 million, followed by and the finance sector at $102 million.
Nearly half (49%) of the digital ad dollars wasted in 2023 were spent on Google at $167 million, up significantly on the $109 million recorded in 2022.
Another 41% was wasted on Meta’s Facebook and Instagram platforms reaching $140 million – another rise on the $119 million wasted on the channels last year.
“In the face of a looming economic downturn, where spending is likely to decline across the board, advertisers will need to be strategic with their budgets to maximise returns," says Next&Co Co-Founder, John Vlasakakis.
“The annual figures are startling, revealing that of every $10 spent on digital ad spend, $4 is wasted. This data shows that brands are still throwing away billions of critical advertising dollars by failing to understand best practice data use and running campaigns that don’t deliver a strong ROI.
“Many brands are relying too heavily on AI and automation to drive their spend, without understanding the platforms and how to best use the data they have.
“According to the IAB Australia Online Advertising Expenditure Report prepared by PwC we know online advertising grew 7.8% to $3.732 billion in Australia in the September quarter compared to the same three months last year. Yet we are still seeing significant wastage.
“As we head into the new year, businesses need to undertake an independent assessment of how their ad spend is delivering and look to make changes – fast. Now is the time for brands to really hone their data sets and use t data strategically to tap into previous customers and build new audiences.”
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