The lull before the storm: filling the summer sports betting gap
With no major international tournament this summer and football’s growing popularity seemingly knowing no bounds, the biennial drought looks more acute than ever for bookmakers.
Scott Longley looks at how bookmakers are planning to keep punters betting through June and July as increasing pressure on above-the-line channels accelerates their adaptation to a marketing landscape increasingly driven by product and personalisation.
With this year’s Champions League final out of the way at the start of June and the next football season not truly up and running until the start of August, bookmakers are facing the prospect once again of a long hot summer without a major football tournament.
With the popularity of football seemingly knowing no bounds, the biennial drought becomes ever more acute as bookmakers across Europe search for alternatives to keep their customer base happy and, importantly, still betting through the bulk of June and July.
For an example of the degree to which a major summer football tournament has an impact on revenues, we can look at the detail provided recently by the Spanish regulator where it breaks down sports betting GGR month-by-month (see Figure 1).
In the three months leading up to the beginning of last year’s European Championships tournament in France, total sports betting GGR trended downwards from €20.61m in March, and down to €14.2m in April and €16.9m in May.
Then, as the tournament kicked off, the total zoomed back up to €22.4m in June, before settling back for the remainder of the summer at €16.38 in July and €18.2m in August; before finally hitting its stride again in September, when it once again rose to €21.6m.
But the story from these figures isn’t necessarily the degree to which the market receives a shot in the arm when a tournament is taking place. Rather, it is the extent to which total revenues hold up – even in such a football-mad country such as Spain – long after the footballers have hit the beach.
As the Spanish figures show, there is clearly enough in terms of other events taking place during the summer to mean the precipitate fall in revenues does not amount to a complete collapse.
Still, a 26% fall-off between June and July demonstrates that for many customers, the nature of the sporting calendar means their habits alter in sync, and sometimes dramatically.
In their response to these changes operators should be hoping to modify rather that completely overhaul their offer to the customer, suggests Neale Deeley, managing director of virtual sports at Betradar.
He suggests operators should beware the trap of offering, for instance, major golf tournaments to punters that only want to bet on football. “Our reasoning is obvious,” he argues. “The substitute for football is football, not another sport where they might have no interest. That is why virtuals work well.”
In marketing terms, Deeley suggests the successful operators will be the ones using the quieter summer months for more below-the-line promotional activities aimed at promoting non-seasonal products, such as virtuals and esports.
He adds that marketing virtuals to punters during the summer, particularly those without a major international football tournament, “has the dual benefit of keeping punters active with the brand — reducing the chances that they will lapse — while also generating revenue from a fixed-margin product”.
Below-the-line in focus
It makes sense that when the football calendar works against the operators, the marketing that is effective is below-the-line. Deeley at Sportradar says he sees evidence that operators that successfully work the digital and affiliate marketing channels will see significant boosts to their virtual sports revenues.
Below-the-line also works for those brands looking to cross-sell from their existing land-based betting shop estates. Omnichannel is by some measures one of the cheapest methods of acquiring new players and a large part of that push is driven by customer use of land-based betting’s newest product, the self-service betting terminal (SSBT).
John Pettit, managing director for the UK, Ireland and Australia at the largest SSBT provider in the market Playtech BGT Sports, admits the majority of SSBT revenues come from football but makes the obvious point that though there may not be a major tournament going on this summer, there is still football on offer from around the world.
“There is a diversity of football,” he says. “We have over 120 leagues available through our machines.” Indeed, according to Ladbrokes Coral’s last results statement in March, the SSBT content available across the two retail estates helped drive a 12% increase in football stakes in the land-based arena.
Playtech BGT Sports just recently announced it has successfully deployed more than 450 in-shop tablets to Coral shops in the UK and Pettit points out that the SSBT is a way of “digitising the retail environment”.
SSBTs are a gateway to online. “The success of SSBTs dispels some of the myths about retail customers,” he adds. “It can be the first step in the omnichannel journey. For instance, a significant proportion of revenues via an SSBT comes from in-play – and that can’t really be done over the counter.”
Again, according to Ladbrokes Coral, between the two previously separate brands the total online sign-ups via their Coral Connect and Grid loyalty schemes is now over a million.
And these customers come to the online environment cheaply; the cost per acquisition is just £20 (which represents the value of the bonus handed over to retail staff for every sign-up that registers) and their lifetime value has been calculated as being worth over twice that of customers acquired via non-multichannel means.
It’s all about the content
Alongside the in-play facility, where SSBTs also have an advantage is the two 22-inch screens that are a part of the cabinet product, a facility that as Pettit mentions gives operators the opportunity to put much more content in front of the customer.
In UK terms, he points out this is particularly useful when it comes to the horseracing product that BGT has recently introduced, which includes content from the Racing Post.
Others in the purely online space similarly bang the drum for content being a part of the answer to the questions being posed about seasonal client retention.
Providing greater levels of contextual content points the way to helping operators gain a greater understanding of each individual consumer, says Nathan Rothschild, co-founder and director at iSport Genius, which provides a consumer-facing data service for operators including Ladbrokes in Australia and Unibet.
“If you know from the betting history that someone’s inclination is to bet on the English Premier League, then you should be trying to sell them on different leagues and competitions,” he says. “With a bit of a nudge, it can be fruitful to point punters in the direction of the Under-20 and Under-21 competitions that have been taking place or the Major League Soccer (MLS) in the States.”
Contextual information – or what Rothschild calls “data nuggets” – can help guide consumers and provide enough information to encourage them to get involved.
“The understanding has developed within the industry within the last 12 months that you need good quality insights, that are relevant and that are relatively deep,” he adds. “So a combination of personalisation and really good insights is where you are really going to convert users and trigger additional betting activity.”
Another company which has recently announced an initiative in the area of content is betting operator Pinnacle, which recently announced the launch of its ‘Betting Tools’ offering. Although Harry Lang, marketing director, points out the timing of the launch this summer is purely coincidental. “We launched now because we were ready, not because we had some space to fill,” he says.
More broadly, Lang says the fact that personalisation has become something of a buzzword “is a shame as that runs the risk of diminishing its importance and potential”.
“We’re constantly developing our understanding of our customer segments and individual bettor needs at a granular level and it was insights gleaned from this customer analysis that led to the development of Betting Tools,” he says.
“To the question of loyalty, with Pinnacle they’ll recognise the value they receive across all sports and at the same time be less motivated by short-term bonuses with prohibitive terms and conditions. So yes, I believe an informed punter is always likely to have greater degree of loyalty to an operator that educates them, treats them fairly and delivers consistent value.”
A request from the near future
As all schoolchildren know, the problem with the summer is it’s soon over. For the online bookmakers they will be more pleased to see the back of June and July and look ahead to the start of August when European football’s new seasons hove into view.
It is the point at which, we can assume, the larger marketing budgets begin to be wielded once more, albeit this year with a couple of caveats. In the UK, for instance, it might be about to get harder for the big spenders to truly leverage their marketing clout given that the ongoing governmental triennial review is looking at potentially banning gambling TV advertising before the 9pm watershed.
Meanwhile, it was announced in late June that the English FA is cutting all ties with betting companies, and notably its headline sponsorship with Ladbrokes.
On top of that, in Belgium in mid-June it was reported that the government is considering instituting new rules to ban gambling TV advertising around sporting events, alongside not being able to advertise any gambling before 8pm.
Yet, away from the glimmer of the TV screens the battle for customers will be as fierce as ever, and one area where competition is already hotting up is related to the aforementioned drive towards personalisation. Sky Bet has been leading the charge with its ‘Request-a-Bet’ product – essentially an opportunity for punters to make up bets which the bookies will, within reason, construct for them.
Sky Bet has already been followed by me-too products from William Hill, Paddy Power and BetVictor, and according to a recent blog entry from the last’s head of trading Eoin Ryan, the success of the product has been “nothing short of staggering”.
“When the remaining tier one firms start to flex their muscles in this area – as they will – you can expect an all-out war to commence, probably around the start of the football season,” he wrote.
Though Ryan believes there is a technical challenge that will need to be overcome if the product is to truly scale, he still thinks the bookies have hit on what might be a very profitable nerve with the consumer.
“Clearly, the betting public like the fact that this is a chance to connect with a trader, get a unique bet considered and priced and have a unique experience. The customer demand is there already and will only grow. The product can be applied to all sports in due course as well as in-play betting and there are a lot of features that could be added in to supercharge the offering.”
Lang remains sceptical that request-type products will ever “deliver the value that sharper punters are looking for” but as the mass market returns from their beachside breaks – and reacclimatises themselves with big league football – that may not be the point.
As Lang himself concedes, from a marketing perspective such customer-led product innovations “sound terrific”; and, as much as anything, that might be the point. With or without TV advertising, by the time the next World Cup rolls around in Russia next year the phrase ‘bet request’ might become as pervasive as the sport which is still its major medium.
Related articles: iGB Market Monitor – June 2017 (paywall)
Playtech BGT Sports signs with independent bookmakers
Ladbrokes and BGT to roll out additional SSBTs
Video short: True omni-channel approach key to player retention
Real-time interactions that matter: a Champions League story (paywall)
Ladbrokes Coral meets expectations in opening months of 2017