Although US sports betting establishments announced marketing cutbacks, advertisements during the new NFL season have been rampant so far.
Throughout the initial two gamedays of the 2022/23 NFL season, $22 million was spent on TV advertisements by US sportsbooks. Kevin Krim, the head of advertising for an analytics company, highlighted that this spend had risen by $18 million from last season, but it doesn’t represent the cost of ads.
The rise in TV expenditure arrived following reports – this past summer – that betting brands plan to lower marketing budgets to focus on profitability. However, as the NFL is the leading sport in America, Krim highlighted the recent rise is expected.
“Even if reducing overall marketing spend, it’s not surprising to see the NFL growing its share,” Krim said. ‘The national brands, basically FanDuel and DraftKings, are in a winner-take-most race. They’re thinking more extensively and longer than the here and now.
“Not only is football the most popular sports in audience size, but it also has more search engagement, a great metric for value, per person than anything else.”
What Marketing Cuts?
Making a profit has become the focus for sports betting operators, resulting in cutbacks of marketing budgets and the distribution of money into advertising and promotions. However, the money has flowed regarding endorsement partnerships – with attempts to appetize a broader consumer base. For example, BetMGM recently signed actress Vanessa Hudgens.
Similarity arrived when the NFL season began, as sports betting brands knew TV advertising would gain traction since football wagering is the best opportunity to attract new customers. The BIA Advisory Services reported that operators planned to spend $1.8 billion this year, up $800 million from 2021.
New York sports betting accounted for $300 million alone. That said, growth is expected to relax in 2023 at $1.9 billion because legal markets mature; therefore, less market share will be obtainable.
FanDuel Does the Most
Owning 2.46% of the advertisement impressions, FanDuel was the second-most viewed brand during the first two weeks of the NFL season. The king of insurance, Geico, was the only brand to exceed FanDuel’s viewership percentage (3.01%).
“FanDuel rising to the to top this year could be adjustments coming out of a big last year for sports betting brands overall,” said John Cassillo, an analyst for TRREV. “So, while some may be pulling back, others could see the early weeks of the NFL season as their best chance to attract potential bettors for the rest of the fall.”
FanDuel has been transparent with its focus on attracting new customers as it continues to expand its market dominance. FanDuel’s market share is estimated at around 39%. In addition, their expenditure on marketing didn’t stop the brand from reporting a profit in its most recent quarter.
Caesars Pulls Back
In 2021, Caesars Sportsbook entered the NFL season with the announcement it would spend $1 billion on its interactive division. However, this sentiment didn’t hold for 2022, as the sports betting operator announced its intentions to pull back costs in February.
This year, they’re noticeably less prominent. Krim didn’t want to high Caesars in particular but did highlight those brands removing TV ads is usually a negative connotation.
“Stopping advertising will show up later in the business as shrinking market share and revenue,” he said. “Marketing works, and if you stop, you’ll retreat. The question we don’t know with Caesars is, are they putting that money to work elsewhere?”