FanDuel and DraftKings find a new path — local TV — for spreading the word
Consumers who feel the proliferation of sports gambling marketing on their TV screens are not imagining things.
Online sportsbooks FanDuel and DraftKings are becoming synonymous with the new wave of sports betting and, per Nielsen data, are a big reason for the $154 million spent in the first quarter by all online sportsbook operators on local television advertising.
According to BIA Advisory Services in a casino.org story, online gambling could mean north of $580 million for the local TV ad market by 2024, Nielsen said.
FanDuel dedicated $57 million to local TV ads in the first three months of this year; DraftKings put out $44 million.
Increasingly becoming a major player on the sports betting scene, BetMGM, with its 50/50 joint venture between MGM Resorts International and Entain Plc, executed a $25 million spend.
It’s more than a trend, too. It’s the new reality when one considers that number, 154 million gaming companies spent on TV advertising in the January through March period, greatly surpasses the $10.7 million spent in the comparable period in 2019.
Of course, that was just as the pandemic was taking hold, and only a few months after the May 2018 Supreme Court ruling overturning the ban on single-event sports wagering.
According to Nielsen stats, online gambling ranks 11th among 1,200 product categories for spot TV advertising dollars, a 2.1% share.
By comparison, legal services, the top category for dollars spent, accounts for 7%.
The industry is competitive and rapidly changing, with predictions and investments running the gamut on ways for gaming companies to succeed.
There's no sure way to do it.
Penn National Gaming’s Barstool Sportsbook, which finished outside the top five in the Nielsen numbers, doubled down on its commitment to expanding via name recognition.
The surge in spending by gaming companies is benefiting local TV stations, providing a needed boost at a tough time — particularly as many traditional advertisers pulled back or paused in 2020 due to the COVID-19 pandemic, Nielsen wrote.
The research firm underscored the downward trend local TV markets have seen with regard to their other sources of ad revenue (cars, local stores, restaurants and more suffered declines in 2020).
The Nielsen analysis also illuminated just where the ad spends are targeted.
“Given the sports betting focus of the top advertisers, sports programming is a key way to reach sports bettors,” Nielsen said in its report earlier this month.
“Surprisingly, the largest share of online sports betting ads is currently allocated to news programming. One reason attributable to this fact is that local news stations have much more control over their total ad inventory (versus sports programming which typically occurs in primetime), and as a result, there is more flexibility to place ads in news.
“It’s also worth noting that the share of these ads in news programming has increased to almost 40% over the past year. The increase isn’t without its merits, as news offers significant reach and an opportunity to engage new spenders, growing the consumer base.”
So, what other factors should the online sportsbooks be considering?
The behaviors of people more interested in movies and comedy would seem a natural target, as the Nielsen report states.
While sports programming still has the biggest reach (77%) of the country’s sports bettors, local news currently reaches just over half (53%) and growing,” it said. “Other categories representing possible opportunities for brands seeking greater targeted audience reach for sports bettors include movies and comedy programming, with reach of 76% and 74%, respectively.
As for non-local spending, the various gambling sportsbook companies pushed approximately $25 into national digital ads and almost $6 million toward network TV ads in January, February and March 2021.
The trend doesn’t appear to be changing, as Nielsen concludes: “So even though gambling activities are limited to select states, advertising in this category, where legal, is increasing across the overwhelming majority of the country’s 208 DMAs (designated market areas).
“And that spells opportunity for local news organizations and advertising agencies alike.”
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