Australia's digital advertising sector wasted a record $6 billion in ad spend in 2023, according to Next&Co's annual Digital Media Wastage report.

The latest result represents a 17% increase from the previous year and accounts for 43% of the $14.1 billion invested in digital advertising nationally in 2023.

The data, collated from Next&Co’s quarterly Digital Media Wastage reports, audited over 400 companies with digital ad budgets ranging from $500,000 to $21 million. The retail sector emerged as the biggest culprit for the second consecutive year, with over $155 million of wasted ad spend.

Nearly half (49%) of the digital ad dollars wasted in 2023 were spent on Google, amounting to $167 million. This figure is a significant increase from 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," Next&Co Co-Founder, John Vlasakakis, commented. "Of every $10 spent on digital ad spend, $4 is wasted."

Vlasakakis warned 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. He also accused many of relying too heavily on AI and automation to drive spend decision making "without understanding the platforms and how to best use the data they have".

"Now is the time for brands to really hone their data sets and use data strategically to tap into previous customers and build new audiences.”

Next&Co aims to be the agency to do this via its auditing platform, Prometheus, which has been utilised by over 500 companies across Australia. It provides a score out of 100 on the overall performance of each metric and the exact dollar figure of ad spend wastage.