Nielsen Research: Gambling Sector Pumps Millions into TV Advertising, But Lottery Spend Lags
In a crowded television advertising marketplace, where commercials for every imaginable product and service bombard consumers with their “buy me” messages, it can be difficult for the gambling sector to be noticed. But many gambling organizations that understand the ever-increasing importance of both brand building and game promotion are taking to the TV airwaves like never before.
The UK gambling sector occupies the forefront of this phenomenon. It is using TV advertising to drive sales in one of the most heavily regulated markets in the world. According to a market study conducted by Nielsen, the global information and measurement company, £456 million was spent by UK gambling companies to promote their products via TV ads from 2012 to 2015. When lottery companies’ TV advertising costs are included, the figure increases to £631 million.
These figures demonstrate the effectiveness of TV advertising in the UK gambling sector. The Gambling Act of 2005 liberalized the advertising of gambling products on television. Previously, the National Lottery, football pools, and bingo games were the only gambling options that were permitted to be advertised on TV. Now, sports betting, online casinos, and poker are advertised on TV.
To gain insights into how the market has changed since the Gambling Act of 2005, the British communications regulator commissioned and published a study in 2013. The study reported that in 2006, the year before advertising was liberalized, there were 152,000 gambling advertisements on television. And 69.8% of the TV spend was made to promote Lottery products. In 2008, the figure increased to 537,000. Lottery’s share of the TV spend declined to 30.8%. In 2012, 1.39 million commercials of different gambling products were seen on British television, more than double the number of just four years before. And Lottery’s share of the TV spend declined to 25.6%. Lottery investment in TV advertising did not decline. But its share of TV advertising as compared to bingo, online casinos, and online poker has plummeted.
Bingo ads represented 38.3% of all gambling ads in 2012. Commercials for online casino games and poker options held a 29.6% share. Lotteries and scratch cards claimed a 25.6% share, and sports betting commercials accounted for 6.6%. So, as the TV spend by other gaming sectors skyrocketed, Lottery has lagged.
Responding to the growing popularity of Internet gambling, gaming companies have invested millions of dollars in improving their digital divisions. It may seem counterintuitive that so much money is still invested in TV advertising to advertise on the online medium. If the audience is migrating en masse to the internet, why is TV advertising spend increasing at such a torrid pace?
Because TV advertising still works. According to an analysis by marketing analytics provider MarketShare, television is still “the most effective advertising medium” and a major driver of growth in key performance indicators such as sales and new accounts. TV advertising has not lost its appeal. And gambling operators still consider it an effective means for attracting the attention of a wider gaming and sports betting audience.
A World Transformed by Uberification
Consumers don’t want to know how something happens, we just want it and then expect it to happen. The Uber Mobile app just works. We see the little dot coming closer to pick us up, and the phone number to call if we need to, and that’s all we need to know. We are not “interacting with technology”. We are only acting. In the mind of the modern consumer, we are interacting directly with the information it provides. There is no more distance between the human and the information than there is between the neural networks that instruct our legs to put one foot in front of the other and the motion that results from that instruction.
Uberification has another meaning. Business has traditionally been conducted by incremental improvements. If business were a poker game, it was being won by two pair one day, three of a kind the next, and four aces the next. But in business as in poker, a Smith and Wesson can be introduced to the game and beats all comers. Uber in the livery service sector may be the latest incarnation of a Smith and Wesson. What Napster did to the music and recording sector is another. Record labels ruled distribution. Then Napster, then Apple, then Pandora and Spotify completely obliterated this multi-billion dollar sector. And now Apple is the one that is adapting to Spotify. Another example: there are now more AirBnB rooms in Paris than there are hotel rooms. Like livery service, downloadable music, and guest rooms, transformative disruption is reshaping entire economies. Is government-gaming vulnerable to being Uberified? Where will it come from, how will it attack, what can we do about it? Better yet: How can Government-lottery be the Uberifier instead of the Uberified?
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