The beginning of NFL seasons in recent years have been cause for a marketing boom with a massive uptick in advertising spend and promotional play offers for new customers, but many operators say they are continuing with a more cautious and optimized approach.
Customer acquisition has been the main focus for sports-betting operators as new launches continued around the United States, but as new state launches have slowed, and investors have grown weary of the heavy losses incurred with the goal of acquiring customers, some operators have begun to pull back.
“We are continuing to pull down some of our marketing spend,” said Bill Hornbuckle, CEO of MGM Resorts International. “While share continues to be important, particularly in new markets, we're getting smarter and smarter and smarter about how we do this.”
Tom Reeg, CEO of Caesars Entertainment, said Caesars' approach will be a more measured one than the one the company employed last season when it relaunched its Caesars Sportsbook after acquiring William Hill.
“I would expect as we get into football season, which is clearly our acquisition period in this business, you're going to see some modest losses return as we acquire new customers,” Reeg said.
Reeg said the company’s partnership with ESPN includes television advertising, and the company plans local ads.
“Compared to last fall, it's going to seem like we've left the air entirely, but you will run into a commercial or two depending on where you are and what you're watching,” he said.
According to a report from advertising research firm iSpot.tv earlier this summer, sportsbook brands spent an estimated $282m on national advertising spend alone, not including local market advertising and promotional play spending.
Of that $282m, about 75 percent was spent during the NFL season.
Reeg and Hornbuckle were not the only gaming executives to discuss advertising with analysts during their second-quarter earnings calls this month.
DraftKings, on the other hand, continues to be aggressive with marketing spend, although CEO Jason Robins said the company has optimized its spending to make it more effective than in recent years, including more national spending compared with local market advertising spend.
“We definitely are finding some marketing optimization, both through the shift into national from local as well as some early wins on the [Golden Nugget] synergy side, so those are things that we view as just pure optimization,” Robins said.
“Part of also what we look at as optimization is how we time our spending throughout the year, and I think that because of that, there are also some optimizations that have come from shifts that won’t actually lower the overall amount of spend, but we’ll make it such that the performance is better because we’ve timed it better.”
For companies that have been less willing to spend massive amounts on marketing, the more restrained spending could present an opportunity.
“The recent shift to a more rational environment plays to our advantage, a focus on earning rather than buying customers and really earning their trust is where our platform and customer service shines,” said Rush Street Interactive CEO Richard Schwartz.
“Looking ahead to the fall when the sports calendar picks up again, we are mindful that we may see another phase of aggressive sportsbook advertising during the football season, but we will remain prudent with our marketing dollars,” he continued.
“That said, we continue to be data-driven and plan to continue to invest in customer acquisition at viable cost levels and at times of the year, when those customers are most prone to begin betting with us, such as the upcoming football season."