Gambling on a marketing return

When the Betting and Gaming Council (BGC) announced its members were instigating a voluntary ban on all TV and radio advertising for a six-week period in May, it was an acknowledgement of how central gambling marketing is to public perception of the industry and how it views its efforts with regard to responsible gaming.

It wasn’t coincidental, of course, that this period of abstention occurred when there was barely any sport taking place. Without big sporting events to latch on to, the central reason to market sports betting to the mass market had all but disappeared.

But gaming was also affected by the voluntary move with Gamesys, in particular, taking the step of announcing an end to its daytime TV advertising and sponsorships in the UK and also halting all other untargeted customer marketing.

Pre-lockdown, the BGC’s members accounted for approximately 50% of all betting and gaming TV and radio advertising (the National Lottery and other society lotteries accounts for the rest) and with other forms of gambling marketing also taking a back seat, it meant that much of the marketing spend earmarked for the second quarter will have remained unspent.

Dry powder in the parlance. “Wherever possible, the marketing budget would have been cut or frozen during lockdown,” confirms Andy May, a marketing consultant to the gambling industry who previously worked as European director at Betfair and marketing director at Ladbrokes. “Any variable or discretional spend would be paused.”

Yet, if the pause button has been in action since March, the situation now that elite sport has returned (albeit behind closed doors) is more nuanced than saying operators will be springing out of the traps with a renewed marketing vigour.

To an extent, this will be driven by many in the market hoping to repair some of the damage that has been done to the bottom line during lockdown, says May. “I think it unlikely we will see a big increase in marketing spend across the rest of 2020 as operators will be keen to keep costs low to offset the losses from lockdown,” he adds.

Sail we must

This is, of course, a period like no other and certainly it is unlike anything ever faced before by the online gambling sector. Being able to understand and react to what happens next will necessarily mean that all existing marketing and promotional plans and strategies will need to be revised.

“An agile approach will be needed to gauge the level of marketing spend for each company, with channels reviewed regularly and budgets shifted between channels depending on performance,” says Toby Oddy, chief executive at Digital Fuel Marketing.

“It will be more important than ever for companies to have an effective working relationship with their agency or in-house paid team,” he adds. “This will ensure they can work together to focus budgets, move with market changes and ensure a solution that meets customers’ expectations at an affordable level of spend.”

Total marketing spend will be just one piece of the post-lockdown puzzle. “With the inevitable lapse and churn of customers, the marketing departments of bookies will be chomping at the bit to get back out there,” says marketing consultant at Brand Architects Harry Lang. “However, some will take their counsel and not join the inevitable land grab.”

Lang is referring to how the debate around gambling marketing has developed, not just in the UK but also further afield. Bans on advertising are now a fact in Italy and Spain and similar measures have been threatened by politicians in other countries, including Denmark and Sweden.

It is in the UK, however, where the anti-gambling lobby has got the bit between its teeth. Taking advantage of media-stoked public fears over gambling during the pandemic (and the BGC’s own move on advertising), the leading lights of the Gambling Related Harm All Party Parliamentary Group have called for an end to all gambling marketing of whatever stripe.

The recent GRH-APPG report put forward a ban on all gambling advertising as one of the key recommendations, a call which was unsurprisingly rejected by the Advertising Association. “At this time, we believe a total ban is not necessary – such an action has wide implications, particularly for the support of sports across media channels, something enjoyed by millions of people right across the UK,” said AA chief executive Stephen Woodford.

Michael Dugher, chief executive at the BGC, says his members are not opposed to considering further advertising restrictions, but they are firmly opposed to a prohibitionist stance being taken saying it would have widespread negative consequences. “A ban would be devastating for all sports, the broadcasters, and in a globally competitive market would put our legally licensed members on a par with illegal black-market operators with no possible way to differentiate their companies,” he says.

Michael Dugher, BGC

The sector will have to wait until the government’s promised Gambling Act review to see whether a ban on marketing is on the menu. But ahead of any actual legislative moves, the ramping up of the rhetoric means the operators are treading on eggshells as far as what they should do next.

“Operators are currently in a no-win situation,” says Fintan Costello, managing director at BonusFinder. “In these unprecedented times with everything going on in the world, a traditional TV ad promoting gambling can come across as out of touch and insensitive, while if they choose to not advertise at all and their competitors do, they will lose market share.”

The consumer perception of any marketing campaign with the wider public will be important with the potential for long-term brand damage needing to be balanced against the short-term goal of reigniting customer activity.

“Of course, a lot of revenue has not been generated in the last few months and quite rightly businesses need to get moving again to stay alive,” says Oddy. “This is a tough one to balance, but companies should ensure they adhere to the regulations.”

Michael Dugher, chief executive at the BGC, says its members are more than aware of their responsibilities at what remains a sensitive time, adding that they will also dedicate 20% of their ad space to safer gambling promotion. “It is important that we strike the right balance between protecting our members’ right to advertise and addressing concerns about the volume of advertising,” he adds.

Finding the audience

Balance will also apply to how the companies respond to a resumption of general marketing activity. At an operational level, Oddy believes there will be more of a focus on targeted efforts and on where bookmakers are more likely to find their audience.

“With the increase in real-time data and tracking provided through other below-the-line marketing channels, it’s clear that more of brands’ media budgets will be aligned to channels where a clear return on investment can be identified and targeted,” he says.

“The growth in mobile streaming services and companies such as Amazon Prime winning rights to show English Premier League matches will also have an impact on where brands look to invest budgets in the coming months. Digital also affords the advertisers full control on spend which is not quite so straightforward with traditional channels such as TV.”

In part, this also reflects a switch that has taken place in recent years in various regulated markets where the focus now falls on customer retention rather than acquisition, with operators “recognising the importance of retaining customers they already have and reducing churn”, says May.

“Sophisticated real-time CRM systems are helping drive customer engagement levels and personalisation ensures messages are timely and relevant to the customer,” he adds. “Advertising still has its place but is not the be-all-and-end-all it used to be.”

Indeed, anecdotal evidence regarding the return of elite sports would suggest that many consumers are finding their way back to their preferred sportsbook offering without very much by way of marketing activity to entice them.

For evidence, we can look at the late June trading update from 888 which, along with reporting a 35% year-on-year increase in average daily revenue, also trumpeted a ‘better-than-expected customer reaction’ to the return of sports events in June with the sport-betting revenue run-rate ahead of this time last year.

But it is in gaming where 888 has enjoyed the most success, even during the worst of the lockdown, which it attributed to the boost to its customer acquisition achieved in 2019. Oddy says that for gaming-led brands, the focus right now should indeed be on emulating that achievement.

“The path to acquisition involves multiple touch points, building and maintaining brand awareness will stand gaming-only operators in good stead for the peak of acquisition,” he says. “Let’s not also forget that there are still good volumes available now, and high-intent search being shown.”

“What the post-lockdown situation has shown a particular light on is the importance of having invested in your brand and having focused on customer loyalty,” says Costello. “Top-of-mind awareness is more important than ever.”

Inevitably, however, this is likely to play into the hands of the established operators. May concludes that the current pressures, including any moves to further restrict marketing by the authorities, will have a deadening effect on competition.

“It will become very difficult for new entrants to gain a foothold in the UK and for the smaller brands to achieve growth, so we can expect to see the large get stronger and many of the smaller operators disappear from the market over time,” he suggests.