Brands’ are wasting $73bn of adspend on unsuitable digital ads during festive period

Over the last two years, global brands have spent over $600 million (£482 million) on ads that are deemed “digitally unsuitable” during the final quarter of the year. Extrapolating this trend to 2023, the anticipated total global ad spend wastage for this year is estimated to reach $73 billion (£59 billion).

A creative technology company’s analysis, which evaluated more than 3.9 million ads from 2021-2022 across 10 different industries, including retail, food and beverage, and consumer packaged goods, revealed that brands globally invested over $600 million in ads not suited for digital platforms during a crucial period for marketers. Projecting this trend to 2023, it is predicted that over $73 billion will be squandered on suboptimal digital ads in Q4.

Earlier research in 2020 and 2021 disclosed that over 50% of digital ad spend supported image and video ads that were not optimized for digital environments ($700 million out of $1.2 million analyzed). In the subsequent year, a similar amount of budget was wasted in Q4 alone.

For many brands, the final quarter contributes to over 50% of their annual revenue and an uneven share of their yearly media budget (around 30% of total worldwide ad spend). This period is a pivotal opportunity for brands to engage consumers, especially with heightened buying intent during Black Friday, Cyber Monday, Christmas, Hanukkah, and Kwanzaa celebrations.

Despite investing millions in bringing holiday campaign ideas to life, brands stumble in the last stretch before their ads reach their digital destination. The routine repurposing of TV-made content on digital platforms means that ads are inadequately adapted to their digital surroundings. They often neglect fundamental fit-for-platform creative best practices crucial for maximizing message impact. Millions are poured into ads lacking branding in the initial 3-5 seconds (the average view length of a digital video), displaying incorrect formats, or lacking subtitles or supers in media environments where over 90% of videos are watched without sound. These are basic creative quality criteria proven to enhance performance on digital platforms.