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Over SG$1bn in digital ad spend wasted in SEA during Q1 2022

Over SG$1bn in digital ad spend wasted in SEA during Q1 2022

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Over SG$1 billion in digital ad spend was wasted in Southeast Asia during the first quarter of 2022, according to statistics from Melbourne-based digital media agency Next&Co. In Asia Pacific, more than SG$137.4 million was wasted during the period, an average of 41% media spend waste. According to Next&Co, the data eclipses digital ad spend wastage in Australia, which reached SG$134.3 million, or 40% in the first quarter. 

While Next&Co does not have data for specific Southeast Asia markets such as Malaysia and Indonesia, co-founder John Vlasakakis told MARKETING-INTERACTIVE that Singapore waste is on average at 42%, higher than any region it has audited.

Next&Co audited 81 companies with digital ad budgets of between SG$500,000 to SG$39 million across a mix of publicly listed, multinational, national, and SME companies. The data, compiled from Next&Co’s Prometheus proprietary media auditing tool, found that brands in the retail sector will report the most digital ad spend wastage, of almost SG$32 million. It was followed by insurance at SG$28 million, finance (SG$26.5 million), real estate (SG$19.8 million), education (SG$16 million), and health (SG$14.7 million)

In Southeast Asia, the finance and retail sectors had the biggest wastage and Vlasakakis attributed this to the culture in these industries where brands get consumed with competitor insights and have the mentality of spending more to get more ROI.

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To prevent digital ad spend wastage, Vlasakakis said brands can undertake more active assessments and audit activity to assess if their digital investment is effective. "Digital media requires a lot of heavy lifting even with automation so it's important for brands to keep their finger on the pulse and always look to be efficient before they just spend more," he added.

Procurement can also help the marketing team by providing more negotiating power. For example, Vlasakakis said the fact that one financial services provider had procurement negotiate the cheapest rate but allowed for a clause for the agency to never be audited during their three-year term gobsmacked him. "If that isn’t a red flag, I don’t know what is. Digital marketing activity isn’t occurring above board, and they are now powerless to take action," he added.

When asked how the marketing and procurement departments can form a seamless and effective relationship, Vlasakakis told MARKETING-INTERACTIVE that brands need to focus on who is going to put performance at risk and guarantee the best ROI for the brand and not just focus on who is going to be the cheapest. "As they say, if you pay peanuts you get monkeys!" he added.

Photo courtesy: 123RF

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