Brands are wasting hundreds of millions in digital ad spend during the holiday season, according to a new analysis by CreativeX, a technology company powering creative decision-making for the world’s largest brands.
The analysis, which assessed over 3.9 million ads from 2021-2022, from 400+ brands across 10 different industries including retail, food and beverage, and consumer packaged goods, found that brands spent over $600m worldwide on ads that are not digitally suitable during a critical time of the year for marketers. Extrapolating this to 2023’s ad spend figures, over $73bn is forecasted to be wasted on digitally suboptimal ads in Q4 2023.
Previous research conducted by CreativeX found that, in 2020 and 2021, more than 50% of digital ad spend was put behind image and video ads that were not optimised to their digital environment ($700m out of $1.2m analysed). A year later, almost as much budget has been wasted in Q4 alone.
For many brands, the last quarter of the year accounts for more than 50% of their annual revenue and a disproportionate allocation of their annual media budget (approximately 30% of total worldwide ad spend). It’s a crucial opportunity for brands to attract consumers as buying intent peaks during Black Friday, Cyber Monday, Christmas, Hanukkah and Kwanzaa celebrations.
While brands spend millions bringing their holiday campaign ideas to life, they falter at the last mile before their ads reach their digital destination. The habitual reuse of made-for-TV content on digital platforms means that ads are not suitably adapted to their digital environments and fail to incorporate basic fit-for-platform creative best practices that maximise the likelihood of the message’s cut through. Millions are invested in ads that do not include any branding in the first three to five seconds (the average view-length of a digital video), are formatted incorrectly, or fail to include subtitles or supers in media environments where 90%+ of videos are watched without sound, all basic creative quality criteria that’s been shown to deliver better performance on digital.
Anastasia Leng, founder and CEO of CreativeX, said: “Creative teams have toiled hard all year to deliver break-through holiday campaigns and tap into consumers’ heightened intent to purchase. Sadly, the impact of their work is minimised by the last executional leg of the journey: adapting 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.”
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