Are Betting Brands Increasing Their Online Spend?

Posted by Harry Kane on Friday, December 28, 2018

In recent times, few expanding markets have showcased as much growth as the gambling industry. This peaked in the year ending September 2017, as the sector generated a gross gambling yield (GGY) of £13.9 billion during this period and grew by 0.7% on the previous 12 months.

At the same time, the online gambling GGY reached a record amount of £4.9 billion, as this niche grew to account for 35% of the industry as a whole.

Such growth brings significant challenges, however, particularly in terms of market saturation and the way in which brands advertise themselves to customers. Make no mistake; the UK Gambling Commission (UKGC) and various advertising authorities have already moved to regulate television and other forms of advertising in the marketplace, while several firms have been sanctioned as new measures have been introduced to govern best practice.

In this post, we’ll look at the impact of these new regulations, while asking whether or not this will see betting brands increase their digital marketing spend.

Online Gambling and Advertising – The Story so Far

It was back in the autumn of 2017 that the UKGC announced its intentions to regulate the way in which gambling brands advertise on television and a host of other mediums. This was part of the commission’s core strategic objectives through 2021, which sought to safeguard vulnerable gamblers and the reputation of the industry as a whole.

Almost immediately, this left four betting firms facing fines over the publication of promotional ads that were disguised as news articles. The content of these pieces focused on the narrative of a gambler who has cleared his debts and paid for his wife’s medical treatment by playing online casino games while including direct links to online casinos in the body of the text.

After receiving a number of complaints, the Advertising Standards Authority (ASA) and the UKGC moved to sanction the firms in question, in a belief that they’d used affiliate marketers to create and share this content (although this claim was vehemently denied by the relevant gambling brands).

More recently, the advertising regulatory body (the Committee of Advertising Practice) has moved to ban adverts that may appeal to problem gamblers, with a particular focus on targeted in-play sports betting offers aired during live events.

Part of a new code of conduct, gambling brands must now refrain from promotional messages as a way of promoting in-play betting markets, particularly if they adopt an active tone that creates a sense of urgency among gamblers.

This follows hot on the heels of the World Cup in Russia, which took place over the summer and captured the attention of the UKGC and advertising industry regulators. Market leading brands such as Skybet, Betfair, Paddy Power and Bet365 were among the biggest advertisers during the tournament, with in-play messages prominent during many of the live games.

According to an independent body of research that analysed 11 games broadcast on ITV, a total of 62 out of 66 ad breaks featured one or more gambling message. As a result, it has been suggested that the proliferation of gambling ads on television (often pre-watershed) has normalised gambling among young and vulnerable individuals, while deliberately targeting people and compelling them to access live betting markets.

As a result, it’s little wonder that regulators have sought to clamp down on this practice, in a bid to stop trivialising gambling and help the UKGC to achieve its aim of safeguarding potentially vulnerable customers.

The Ad Clampdown – How Have Gambling Brands Reacted?

Even before the UKGC and various advertising brands announced the clampdown last year, it’s fair to say that online casinos and gambling brands may have sensed a change in the regulatory climate.

More specifically, it seems as though operators have sought to incrementally increase their online advertising spend over the course of the last three years or more.

This is borne out by statistics toom with the Gambling Advertising and Marketing Spend in Great Britain 2014-17 report offering a relevant case in point. Additionally, this sum was almost 50% more than the 2014 digital spend of £400 million. Not only this, but the latest figure has also grown to be £513 million more than the industry’s TV advertising spend, suggesting that operators are looking to adapt their marketing strategy in a bit to suit the regulatory climate and the core behaviour of customers.

This also marked a shift away from live ventures, which has been a significant trend in the industry for a while now. So while it makes sense that operators should be looking to reduce their

TV advertising spend given the recent clampdown, brands such as William Hill have already reduced their reliance on this channel while also selling it lucrative pitches and racing venues nationwide.

This trend is hard to ignore, and it certainly hints at the advertising strategy likely to be adopted by operators in the future.

The Last Word – Is There Another Reason Why Betting Brands Are Increasing Their Digital Spend?

Of course, some may argue that the decision of operators to increase their online advertising spend while reducing their TV budget is little more than a coincidence, but this seems unlikely given the way in which the corresponding numbers have progressed in recent years. Whether this is solely the result of the new restrictions placed on TV advertising is another matter, however, as there may be other factors in play here (if you’ll pardon this pun).

During the aforementioned World Cup, for example, we saw that the UK’s leading gambling brands fail to effectively engage their customers or trigger social interactions despite their significant TV spend. These operators certainly fell short of iconic brands such as Nike and Coca-Cola, while the key takeaway here is that betting firms struggled to achieve a viable ROI on the television marketing budget.

As a result, it could be argued that operators are simply adjusting their advertising budgets in a bid to meet the changing behaviour of their customers. More specifically, there’s clearly a focus on creating digital and online customer journeys, while the decision of regulators to crack down on TV advertising will have served to sharpen this over the course of the last year.