Next&Co: Advertisers waste record $123 million in digital ad spend

Australian advertisers wasted $123.1 million in digital advertising in Q2 of 2024, one of the highest quarterly amounts recorded, according to independent performance agency Next&Co’s quarterly Digital Media Wastage report.

This figure is up $25 million from last quarter’s ad wastage data and nearly $50 million YoY. According to Next&Co, it is one of the highest quarterly amounts recorded since the report’s inception, with figures usually sitting between $70 million to $110 million.

The data represents millions of advertising dollars that failed to further digital advertising objectives across various verticals, including real estate, retail, insurance, finance, and FMCG. The $123.1 million represented an average of 44% of total audited digital media spend.

The data was gathered by Next&Co’s proprietary media auditing tool, Prometheus. Thirty-seven companies with digital ad budgets between $500,000 and $21 million were audited, including multinational (42%), national (37%), ASX-listed (11%), and SME (10%) companies.

Next&Co co-founder, John Vlasakakis, said: "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," he continued.

"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."

According to the report, the retail sector recorded the highest amount of wasted digital ad dollars for a consecutive quarter, totalling $48 million. The number is up $20 million QoQ and over $8 million YoY.

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).

The report further highlighted that Google topped the digital media channel waste list among media channels for the first time. In Q2, $55.4 million was wasted on Google advertising, up nearly $20 million from the previous quarter.

Meta’s Facebook and Instagram platforms were a close second at $52.9 million, up nearly $3 million from Q1 and nearly $7 million YoY. Additionally, $8.6 million was wasted on Bing, and $6.1 million on LinkedIn.

The report follows last month's announcement from IAB Australia, which urged the Australian advertising industry to take Made for Advertising (MFA) sites more seriously and work collaboratively to minimise ad spend on these sites and with any associated participants.

The trade association issued a Made for Advertising guidance paper with clear definitions and recommendations, describing MFAs as a blatant waste of investment for brands that expose their ad campaigns to such sites.

See also: IAB urges industry to reduce ad spend on Made for Advertising sites

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Top Image: Next&Co founders Nick Grinberg & John Vlasakakis