Betting operators have a lot to think about when considering the best way to advertise their services and which channels to use. Firstly, there is a conundrum when it comes to getting the balance right in terms of advertising. Are operators trying to gain maximum exposure? Secure the most easily acquirable customers? Garner the most online traffic?
The statistical research company Epom conducted a series of surveys to glean insight into the gaming’s biggest players’ thoughts about advertising channels, in all their forms. Most operators care purely about customer acquisition as a measure of performance. On these grounds, affiliates and paid searches topped charts for ‘best performing’ advertising channels.
At present, there are several dominant affiliates in the US market, including Catena Media, Better Collective, XLMedia and Gambling.com Group. Catena Media reported $117.9m in revenue for FY2022, an annual increase of 7%. The affiliate has long been making inroads into the American market by purchasing several sports betting and gambling websites. In 2016, it acquired AskGamblers.com for $17.1m, before selling it to GiG in January 2023. AskGamblers.com is a fantastic property for various reasons. Through its Casino Complaint Service, $26m of delayed, unfairly confiscated and otherwise unpaid money has been returned to over 9,873 players. For this reason, among others, the site is trusted by hardcore US gamblers who will follow the online leads generated by the site – taking them straight to the betting operators who have partnered with it.
One big name that has ensnared the services of Catena is Betway, who put pen to pad with the affiliate in 2020. Speaking on this partnership, Catena Media Director of Commercial Gloria Cereda commented, “We can provide operators with quality leads that deliver globally from Europe, to the US and LatAm, combined with this kind of framework agreement it means local commercial deals can be done quickly and seamlessly to the benefit of all.”Trusted affiliates such as Catena offer big operators a kind of ‘shortcut’ into newly opened markets. It has already built the audience base, and all an operator such as Betway needs to do is attach its name to the affiliate and see lead-generated figures skyrocket. Look at Massachusetts (where sports betting launched on March 10), where the affiliate is in prime position to take advantage of this particular vertical’s debut. As well as national brands such as Lineups.com and TheLines.com, it has its own regional website in the Bay State – PlayMA.com.
Betting operators were hungry to enter the Massachusetts sports betting market, as the state boasts some of the US’ most famous sporting franchises, such as the Boston Celtics, the Red Sox and the Patriots. So, if affiliates and paid searches are the most desired advertising channels which ones are the least?
THE ANTISOCIAL NETWORK
When asked ‘Which advertising channels are the worst performing in your current marketing strategy,’ operators overwhelmingly concluded that social media was the weakest link. Facebook and Instagram adverts took 47.1% of the share, while TikTok ads had 23.5%. Combined, all forms of social media were hit with an unwelcome majority share of 88.2% in this category. It is unsurprising that platforms designed for millennials and Zoomers are not going to appeal to the more mature, solvent audience that betting operators are targeting.
At G2E 2022, Barstool Sportsbook CEO Erika Nardini took to the stage to argue for the importance of social media. She said the worst thing the gambling industry could do was to go the way of the airline and credit card industries, and stick to the ‘traditional’ forms of advertising. In her keynote speech, she said: “If you want your brand to gain the attention you need to know how to use social media to get it.”However, Nardini evidently doesn’t speak for the gambling industry when we take a look at Epom’s figures. There are more downsides to social media channels – other than their perceived ‘gimmickiness.’ There are many different forms of social media, making it a highly competitive field, with low feasibility due – in part – to strict requirements. What’s more, there is the associated upkeep intrinsic to social media. Operators need to manually or automatically update campaigns multiple times a day, and with the data they currently have on hand, betting operators may not think social media advertising is worth it.
How exactly does the financial arrangement between betting companies and affiliates work? There are two main systems that operators use, which are revenue-sharing models (rev-share) and cost-per-acquisition (CPA), with the former being seen as a superior deal for affiliate companies. With CPA, they are paid for every customer they deliver to a betting company, while with a rev-share system, they are guaranteed a payout – especially when they partner with the likes of Betway. With the second-most popular channel for operators – paid searches – the financial arrangement is always done via pay-per-click (PPC) whereby the operator pays search engines to bump their adverts higher up on their platforms.
DraftKings provides a 35% cut to its affiliate programs, with the affiliate choosing between a CPA or rev share model depending on their preference. Affiliates can create YouTube channels or websites to promote the company’s content and adorn the DraftKings banner at the top of their landing pages. Major operators such as Betway still want their own employees in charge of buying the media that drives traffic to their services.
This graph demonstrates that betting companies prefer to buy display traffic using hybrid methods of advertising. Most operators surveyed (35%) said they had an in-house media buying team and also used a third-party platform to advertise. Meanwhile, 29.4% said they have an in-house server or demand-side platform (DSP) as well as an in-house media buying team. Only 17% delegated all advertising responsibilities to an outside advertisement agency or network. Turning its attention to software, Epom asked the surveyees: ‘What challenges do you currently face with your in-house software as a betting company?’ The answers to this question were very mixed. Some betting operators said they were in full control of their media buying and were satisfied with it, with some saying they used native tools that didn’t require any software at all.
There were complaints, though, with criticism about the ability to track in-house marketing performance. Others give negative feedback regarding a disparity in first-party data that makes scoring or registering conversions difficult. Epom also reported that operators wished for more from their in-house systems: in some cases, more precise control over daily/weekly budget pacing to match seasonal engagement. Others complained that traffic spikes during big games could slow their operations or even result in downtime for their online platforms.
However, respondents generally agreed that DSP and ad-server offers (that are operated by their in-house teams) were very effective in serving media ads. Likewise, they had no major challenges in collaborating with third-party agencies, rather just a few hiccups. Betting operators suggested that they wished for improved tracking of ad serving results and also complained about heavy workloads that were required to meet US regulations. When discussing in-house advertising, ad servers are an obvious priority for betting companies. One message is clear: the technology that places adverts on their sites, mobile apps and other forms of media must be impeccable and there is room for improvement. They want more configuration flexibility, which in turn grants them more engagement with potential customers.
MAIN TAKEAWAYSIn today’s market, affiliate marketing and PPC are still the top choices for ad channels among dominant betting operators. Programmatic advertising is on an upward trajectory but will take a while to become the lead runner of the pack.
In-house media teams are held in high esteem by operators, whether they outsource advertising or not. When operators rely on their own employees for the purchasing of ad media they have a greater degree of control. This system also allows them to have full visibility regarding who their partners are, where their campaigns run and how their budget is being expended. Reliable toolkits for advertising channels are of paramount importance to operators and they report trusting third-party server ads and white-label DSPs the most. Epom predicts that this trend will continue in 2023 and beyond.