In a shocking revelation, Next&Co's annual Digital Media Wastage report has revealed that advertisers squandered a staggering £4.3 billion of their digital ad spend budgets in 2022.
This amount accounts for 41% of the total £10.2 billion allocated to digital ad campaigns, marking a significant increase from the £2.3 billion wasted in 2021. The data analysed from Next&Co's quarterly Digital Media Wastage reports includes various sectors, featuring real estate, finance, pharmaceutical, insurance, retail, and FMCG.
Which industries are most affected?
The figures paint a bleak picture of the billions of pounds that failed to contribute to the intended commercial objectives of digital advertising in 2022. Next&Co conducted audits on 198 companies last year, spanning different scales and industries. These companies possessed digital ad budgets ranging from £400,000 to £25 million, with a breakdown consisting of ASX-listed companies (15%), multinational corporations (39%), national businesses (27%), and SMEs (19%).
Checking out the data using Next&Co's Prometheus media auditing tool, it was revealed that retail brands topped the list of wasting digital ad pounds in 2022, squandering a staggering £63.4 million. The finance sector followed closely behind, wasting £56 million, while FMCG contributed to the wastage with £16 million.
Which advertising channels are most affected?
When considering digital media channels, the two giants, Facebook and Google, accounted for the majority of wasted ad spend.
Facebook alone wasted £94 million, closely followed by Google at £86 million. John Vlasakakis, Co-founder of Next&Co, highlighted the challenges faced by brands in coping with the ever-increasing advertising costs and keeping pace with the innovations offered by advertising platforms. He emphasised the need for businesses to adopt best practices and ensure that their advertising endeavours are profitable and sustainable. For instance, brands are struggling to adapt to the impact of the IOS 14.5 operating system and subsequent releases on Facebook's advertising platform.
How to prevent ad spend wastage in your paid digital advertising campaigns
Despite the rising costs, the data from 2022 has shown that ad spend wastage is still an issue for businesses. In order to prevent ad spend wastage, brands must delve deep into their spending and meticulously plan their future campaigns to ensure their digital ads yield desirable results. Failing to acquire customers at a lower cost year on year will hamper growth, and numerous brands will undoubtedly feel the repercussions.
Considering these findings, it’s imperative for businesses to take control of their digital ad strategies, optimise their campaigns, and channel their resources effectively to maximise returns.
The wastage of £4.3 billion in digital ad spend budgets in 2022 shifts the focus onto efficiency. By critically evaluating spending patterns and adopting a data-driven approach, businesses can mitigate wastage and pave the way for growth and success in the digital advertising landscape.
Here at M3, we’re experts in creating effective paid social media and PPC campaigns, following a data driven approach, ensuring that your ad budgets are spent effectively. To find out more about how we can help you build your paid digital advertising strategy, contact us for a free proposal.
