Brands 'wasting $73 billion of ad spend on unsuitable digital ads' during festive period

Over the past two years, brands around the world have spent more than $600 million (£482 million) on “digitally unsuitable” ads in the last quarter of the year.

Extrapolated to 2023, the total “wasted” adspend for this year, globally, is expected to run to a total of $73 billion (£59 billion).

This is according to predictions from creative data company CreativeX.

CreativeX’s calculations are based on its own research, which found that in 2020 and 2021, more than 50% of digital ad spend was put behind ads that were not “optimised to their digital environment."

The company analysed more than 3.9 million ads, supported by more than $3.6 billion in ad spend, from 2021 and 2022 to arrive at the $600 million figure.

By "unsuitable" it means, for example, ads do not include branding in the first three to five seconds of the film, or they fail to include subtitles when shown on media where most watch without sound. 

The analysis included digital adspend data for 2021 and 2022 from 141 markets, including the UK and US. 2023’s forecast is based on Dentsu’s expectation that $424.3 billion would be spent on digital ads across the year–30% of which is expected in the last quarter alone.

In November and December 2021 and 2022, 61% of all the UK’s digital ad spend was wasted–a total of $22.4 million (£18 million), according to CreativeX.

The US, by comparison wasted $288.9 million (£227 million) in November and December 2021 and 2022–65% of the total spend.

Globally, the average percentage of waste was 61%.

In what is set to be a blockbuster season for UK brands as leading retailers including John Lewis, Asda, Coca-Cola and Marks & Spencer make their seasonal debuts, CreativeX founder and chief executive Anastasia Leng cautioned against agencies falling at the last hurdle.

“Creative teams have toiled hard all year to deliver breakthrough holiday campaigns and tap into consumers’ heightened intent to purchase,” she said. “Sadly, the impact of their work is minimised by the last executional leg of the journey: Qdapting creative assets to align them to the digital media environments they’re intended for. 

“These small tweaks increase an ad’s creative quality score and media effectiveness, and during a year of heightened budget scrutiny, it may just give marketing teams something to be joyful about.”

The latest data from the Advertising Association and WARC predicts that Christmas 2023 will be bumper season for the UK ad market as spend is on track to rise 4.8% compared to last year to a total of $11.8 billion (£9.5 billion).