The battle between native advertising, which helps consumers find and buy content from brands and companies they like, and online advertising, where brands and advertisers compete to reach consumers, is heating up.
Key points:Advertisers have argued for longer term contracts with their brands and are trying to take advantage of the current lack of online ad spaceThere are two sides to the coin, with traditional advertisers saying they are struggling to stay competitive and new entrants hoping to grab a slice of the pieAdvertiser advocates for a longer term deal, saying they have to balance competition with consumer protectionThe debate over the future of native advertising has intensified after the Coalition announced a deal with the Australian Institute of Marine Science to extend the current four-year contract for native advertising until 2019.
The Government’s decision has drawn criticism from the Australian Advertising Standards Authority (AASA), which said it was a breach of the rules on online advertising.
But Advertisers Australia president Peter Smith argued that the Coalition was taking advantage of a “disadvantage” in the existing rules and that the Government needed to take a longer-term view.
“It is important that we make sure we are moving forward on a sustainable basis,” Mr Smith said.
“There is a real concern around what is going to happen in the next two to three years.”
So there is a bit of a trade-off to make sure that we can keep the standards high.
“AdvertisERS SA chief executive John McPherson said the Coalition’s decision was “unrealistic” and would cause the industry to miss out on potential growth.”
We would rather have the Government doing a deal that actually has a reasonable long-term commitment than not,” Mr McPhersonsaid.”
If we can have a longer contract that can actually support the growth of the industry, that will be a win-win.
“Advertising rules were introduced in the mid-1990s and the term of the existing contract was extended from four years to six.
Advertisors are also worried about a lack of local advertising on television, with the Federal Government banning advertising on TV and radio in the NT in 2018.”
The Coalition is trying to put forward a deal where you can advertise on television but that’s not going to work in the long term,” Mr McLaughlin said.
Advertising is expensive for businesses, which are struggling in a market that is dominated by online and mobile advertising.
Advisors said there were still concerns about the current environment.”
In terms of ad pricing, you would expect that with the current ad rates we would see a return to the old ad rates of five to six per cent, and then you would see some further drop in the ad rates with the rise in social media and social-advertising,” Mr Hinton said.