When sports betting launched in the U.S., operators pumped lots of dollars into advertising and promoting their product, just about eliminating any chance of turning a profit. Some of these sportsbooks promised to cut back and focus on profitability.
Then came the NFL season.
U.S. sportsbooks spent $22.9 million on TV advertising during NFL games through the first two weeks of the season, according to Kevin Krim, CEO of advertising analytics company EDO. During the same period last year, spend was $18.3 million, plus the cost of ads, according to Legal Sports Report.
The question of why is simple enough to answer: the NFL is king, and therefore advertising makes sense during the game’s reign.
“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 bigger and longer than the here and now.”
Football also has more search engagement, Krim said.
Yet sportsbooks still feel pressure to cut back its marketing budgets such as ads and promotional offers. But that might not include signing big names for endorsements, such as BetMGM signing actress Vanessa Hudgens.
Operators planned to spend $1.8 billion on advertising this year, up from $1 billion last year, per BIA Advisory Services in the Wall Street Journal. That spending includes $300 million for New York sports betting. The growth is expected to plateau next year at $1.9 billion as more legal markets mature and there is less of a market share grab at stake.
Of the top four operators, only Caesars saw less spend and less impressions, compared to growth in both indices for BetMGM, DraftKings and FanDuel. Two weeks into the season and FanDuel is the second-most seen brand with 2.46 percent ad impressions, according to iSpot.TV. Only Geico has more.
“FanDuel rising to the top this year could be adjustments coming out of a big last year for sports betting brands overall,” said John Cassillo, an analyst with TVREV. “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 39 percent of the U.S. market share, according to LSR estimates.
Last year, Caesars came into the NFL season announcing it would invest $1 billion into its interactive division. By February 2022, the operator revealed its intentions to pull back. This year, its presence is notably less. Krim did not want to speak specifically to Caesars, but said brands exiting TV is often a negative sign.
“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?”
PointsBet shifted its focus to regional marketing efforts, going as far as to pull out of its role in Sunday Night Football. BetMGM picked up the Sunday night football game deal, which can boost its share without spending more on ads.
EDO tracks internet search engagement in the minutes following a brand’s advertisement. For sports betting, there is an 8 percent year-over-year increase in search engagement. However, that increase comes with a 25 percent increase in ad spend.
“They are losing efficacy as they further saturate the airwaves,” Krim said.
