$5 billion in ad spend wasted in 2022

Jason Pollock
By Jason Pollock | 25 January 2023
John Vlasakakis

Advertisers threw away $5.46 billion of digital ad spend budgets in 2022, Next&Co’s annual Digital Media Wastage report has revealed.

The figure represents 41% of overall digital ad spend of $13.9 billion spent on digital ad campaigns in 2022 and is significantly up on the $3 billion wasted in 2021.

The data, collated from Next & Co’s quarterly Digital Media Wastage reports, represents the billions of dollars that failed to further digital advertising commercial objectives in 2022, across the real estate, finance, pharmaceutical, insurance, retail and FMCG sectors.

Last year, Next & Co audited 198 companies with digital ad budgets of between $500,000 to $27 million, including ASX-listed (15%), multinational (39%), national (27%) and SME (19%) companies.

The data, compiled from Next&Co’s Prometheus proprietary media auditing tool, found retail brands wasted the most digital ad dollars in 2022 at $80.4 million, followed by finance at $72.6 million and FMCGs at $21.4 million.

Across digital media channels last year, most digital ad spend was wasted on Facebook at $119 million and Google at $109 million.

Next&Co Co-founder, John Vlasakakis, said: “With advertising costs increasing year-on-year, brands are struggling to keep up with the innovations most advertising platforms offer. It shows many businesses’ internal resources are not across best practice or are running advertising that isn’t profitable or sustainable. For example, brands are still struggling to adapt to the impact that the IOS 14.5 operating system and later releases have on Facebook’s advertising platform.

“The 2022 data shows ad spend wastage continues to grow, despite brands facing mounting costs of advertising. The data is shocking – it shows that brands really need to deep-dive into their spending and 2023 campaign planning, and ensure their digital ads are really delivering results. A lot of brands will feel the pain this year due to not acquiring customers at a cheaper rate in 2022 and, as a result, it will stunt growth this year.

“An action point for brands in 2023 is to get an independent assessment of how their ad spend is delivering, and only scale their spend if it can maintain or increase profits."

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