Retailers are wasting an average of £19,000 a month on ineffective digital marketing, according to new research from product performance management platform ROI Hunter.
The survey, which polled 200 UK retail marketing decision makers, discovered retailers are spending an average of £52,000 a month on digital advertising with 37% spent, on average, on ineffective channels. This equates to £228,000 of wasted budget a year, with Twitter considered the most unsuccessful channel for digital ads, followed by Tik Tok.
The research follows a recent call from the UK government for businesses to cut marketing costs to deliver lower prices for consumers. Over half of retail marketers surveyed believe they regularly waste marketing budget on digital ads that don’t deliver meaningful results, likely caused by a lack of visibility and data to inform decision-making.
The lack of control by retail marketers is particularly evident when it comes to dynamic ads. Nearly half (49%) say they lack visibility and 44% admit a lack of control, which could result in underperforming products being promoted across social selling networks like Google and Facebook. Four in 10 retail marketers also say that they don’t understand how much revenue or sales is driven from their digital advertising.
“Wasted budget or overspend is becoming a huge problem. Retailers are increasingly shifting marketing budgets to digital channels but are unable to optimise their dynamic campaigns for profitability because of a lack of actionable SKU-level insights,” says Karel Schindler, CEO at ROI Hunter. “Without seeing the full picture, retailers are using their dynamic ads to promote items that are already discounted, or that drive engagement but not sales. Huge improvements could be gained simply with access to the right data.”
Pressure is also rising on retail marketers to improve the effectiveness of campaigns, with 53% of retail marketers saying they have felt greater pressure from the board to improve ROI over the past 12 months. Over half say it has become harder to compete online since the pandemic, and 57% believe that digital marketing is seen as a drain on budget by business leaders.
To learn more, download the full report ‘The Retail Advertising Effectiveness Report 2022’ here.