Last bets for advertising agencies

Chris Pash
By Chris Pash | 30 June 2023
Credit: Pascal Swier via Unsplash

The advertising industry and its agencies are being challenged from within by its own staff and many don’t want to work on briefs involving gambling. 

One local chief executive running the Australian arm of a large agency, who didn’t want to be named, told AdNews there's a real social conscience now within the business, especially among early career staff. 

“People are questioning and challenging briefs now in a way that they didn’t 20 years ago," the CEO said. 

“They don’t want to work on gambling clients.” 

The kickback is part of a widespread push from staff -- the average age is 32, according to the Media Federation of Australia -- who want agencies to have purpose, support sustainable development and stay away from what they see as industries harming society or the environment.

The big global agencies contacted by AdNews didn’t want to go on the record about the parliamentary inquiry recommended ban on gambling advertising in Australia, a proposal which appears to be supported by all sides of politics. 

The money from gambling advertising, which has grown by around 13% compound a year over the last 15 years, hitting $300 million in 2022 from $53 million in 2007, has seeped into the industry. And there’s no upside, even for those agencies without direct clients, to go public. 

The move against gambling advertising is growing globally. In the UK, the Premier League is to end shirt sponsorship by gambling firms by the end of the 2025/26 season and the British government is looking at law reform for wagering advertising.

The Guardian has already decided not to accept gambling advertising. In Australia, the big media players, such as Nine Entertainment and Seven West Media, with broadcast rights for live sport, have betting painted in every corner or player's jersey. 

Industry bodies, such as radio’s CRA and FreeTV, describing themselves as being unfairly treated, are predictably arguing for calm. 

However, some of the independent agencies are calling time on gambling advertising. 

Joel Trethowan, managing director at Independent media agency Alchemy One, says it’s crucial to take a step back from the industry's concerns about revenue loss, and the characterisation of this measure as extreme, to understand the broader social responsibility of the media industry. 

“Gambling ads have become pervasive in various media platforms, normalising and promoting an industry that profits from individuals' vulnerability,” he says. 

“The negative impact of gambling on individuals and families cannot be overlooked. Addiction, financial ruin, and psychological distress are just a few of the consequences faced by those affected."

Adrian Roeling, managing partner at Hatched, as a parent, is a big fan of increased regulation of gaming advertising.

"I’d be particularly happy to see increased regulation in channels like TikTok where children are at risk of increased exposure to gambling advertising," he says.

"Years ago Hatched made a conscious decision to decline any invitation to pitch on gaming business after consultation with our staff.

"However a blanket ban on all gaming advertising feels heavy handed and a somewhat blunt approach. Especially when a lot more could be done in the initial instance to improve advertising guidelines in many aspects, including targeting, investment levels, and data usage."

A ban would mean about $300 million sucked out of the advertising ecosystem, about $180 million of it from free-to-air television, according to estimates by investment bank Morgan Stanley.

Linear television is already under pressure, seeing substantial dips in advertising spend following a post pandemic lockdown bump. 

Both Seven West Media and Nine Entertainment have identified a weaker market this year and the disappearance of gambling advertising would have a meaningful impact on both the ASX-listed media groups. Analysts estimate gambling ads make up around 6%, or $180 million, of TV ad revenues of $3.2 billion.

One of the largest accounts, Tabcorp, Australia's biggest multichannel wagering brand, changed hands early this year.

M&C Saatchi, after three years of holding the TAB creative account, declined an invitation to re-pitch.

Justin Graham, CEO M&C Saatchi ANUZ, then didn’t give a reason. However, M&C Saatchi currently doesn’t have wagering clients.

Tabcorp then appointed Accenture Song agency of record for brand strategy, platform and creative, and Ogilvy as agency of record for 1-1 customer experience.

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