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.
Polling up to 200 UK retail marketing ‘decision makers’, the survey found that retailers are spending an average of £52,000 a month on digital advertising with 37% spent on ‘ineffective channels’. This is equal to £228,000 of wasted budget a year.
According to ROI Hunter, Twitter and TikTok are considered to be the most unsuccessful channels for digital ads.
The research follows a recent call from the government to spend less on marketing and more on lowering prices amid the cost of living crisis.
Up to half of the retail marketers surveyed by the product performance firm believed that they 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.
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While 49% said they lack visibility with regards to dynamic ads, 44% admitted a lack of control which could result in under-performing products being promoted across social selling networks like Google and Facebook.
Four in ten retail marketers also claimed that they do not 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 SKU-level profitability because of a lack of actionable SKU-level insights,” ROI Hunter CEO Karel Schindler said.
“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.”
Over half (53%) of retail marketers also admitted to feeling great pressure, with 57% also saying that digital marketing is seen as a drain on budget by business leaders.
