What you need to know:

• Next&Co says $3bn, or 32 per cent, of the Australian digital ad market is likely wasted spend.
• It reached the headline figure after analysing 300 advertiser budgets using its proprietary media auditing tool Prometheus, which it is now launching.
• The tool analyses digital spend on Google, Facebook, LinkedIn and Bing, and provides a score out of 100 based on the chosen metric.  

Businesses should ask their agencies the hard questions, or continue blowing around a third of their digital ad dollars, according to Melbourne-based performance agency Next&Co.

The firm analysed digital spend across more than 300 advertisers – from SMEs to ASX-listed multinationals – and found that, on average, 32 per cent is wasted each year. That equates to around $3 billion across the market.

Next&Co is using that analysis and headline figure to launch its Prometheus platform, which the outfit said uses inbuilt KPIs like leads, customer conversions, ROI and reach to provides a score out of 100 on the overall performance of each metric. It then calculates the exact amount of media dollars wasted.

John Vlasakakis, Next&Co’s Head of Organic search, said Prometheus has been in testing for the past 12 months and claimed a financial services brand found "in one minute" that more than $300,000 in annual digital spend with one platform was being wasted.

“It shone a light on the lacklustre performance and lack of service the client was receiving from its agency.”

Prometheus measures efficiency of digital spend across Google, Facebook, LinkedIn and Bing, and negotiations are ongoing to integrate TikTok and Snapchat to the platform. It can be used with any digital publisher using an Application Programming Interface (API), including catch-up TV, according to the firm.

Next&Co said the tool can predict how many conversions advertisers could achieve, make creative recommendations and suggest improvements to cost-per-acquisition (CPA).