World Cup acquisition to long-term value

Nikolaus, ahead of the World Cup we spoke about flexibility, timing and real-time activation. Looking back, what did the tournament actually deliver?

A lot of what we discussed beforehand proved to be correct. We saw confirmation of the importance of being flexible with spend and continuously optimising campaigns to increase advertising efficiency and CPAs, particularly when certain teams exited the tournament early.

One variable which we weren’t entirely sure what to expect was activity in the European market. There appeared to be a little less exposure and willingness to invest from European operators compared with previous tournaments. Part of that was probably the time difference and the live aspect of the tournament being less prominent. There will obviously have been countries participating for the first time where the experience was completely different, but broadly the trends were close to what we expected.

From our own campaigns, we were particularly happy with the ‘sports moments’ technology we discussed before the tournament, where live data is used to trigger advertising according to what is happening on the pitch. During the final, for example, we worked with leading marketing measurement provider, Lumen, to understand the attention advertising received using live data and live triggers. We saw attention increase by around 400 per cent compared to industry benchmarks. If your advertising is relevant and the message connects directly with something happening on the pitch, you would expect greater interaction. The results demonstrated just how significant that difference can be.

Does an event as large as the World Cup encourage experimentation, or is there too much at stake to move away from proven approaches?

It’s a combination. You probably don’t want to try something radically new during an event of that scale, but you also need a willingness to experiment. That’s one of the advantages of digital advertising. There is much more flexibility than you have with many other channels, so operators can react and adjust rather than simply committing to one approach for the entire tournament.

Operators are now moving from a concentrated global event into a long domestic football season. How does that change marketing strategy?

We’re seeing some operators spending more at the beginning of the domestic season and others being more conservative. Generally, however, the start of a season is a period when operators are more willing to invest because it’s a strong acquisition opportunity. The fundamentals don’t really change. Operators still need flexibility and a healthy balance between brand awareness and performance advertising.

There are also opportunities throughout a long season when attention increases. In US sports, for example, interest can be very high at the beginning of a season before slowing down. Leagues then create events during the season that generate additional attention, like Christmas games in the NBA and NFL. You see something similar with Boxing Day fixtures in the Premier League. They aren’t World Cups, obviously, but from a marketing perspective they create smaller moments where increased attention can be used for acquisition.

Is the quieter period immediately after a World Cup and before the season starts particularly challenging for retention?

Absolutely. The biggest challenge every operator has after an event like the World Cup is retaining the users they acquired. There will always be a percentage of customers who only bet during the World Cup and then disappear. That percentage differs between operators, but retention strategies therefore become extremely important.

Some strategies work better than others. It comes back to personalisation, understanding the user and understanding the quality of that user. Some operators are doing a very good job with smart, personalised incentives. Others are still effectively trying to kill all birds with one stone, which is a challenging approach.

How do you maintain engagement when there isn’t an obvious major event to talk to those customers about?

You must find the right balance. There are still events happening. Some domestic leagues have started and, of course, football isn’t the only sport. There is plenty of tennis being played, for example. But it’s also perfectly acceptable not to interact with a customer for two or three weeks instead of bombarding them every day.

The technology we have within Sportradar is designed to understand patterns and betting behaviours and then personalise messaging accordingly. There isn’t one strategy that fits everybody. Some people bet heavily during the World Cup because they’re highly engaged sports bettors. Those customers don’t necessarily need the World Cup to continue betting. They might be interested in other sports, including more niche events.

Other customers are genuinely recreational. I’m probably closer to that category myself. If I receive two messages or two emails every day from an operator, I’ll unsubscribe because it becomes annoying. Finding that balance isn’t easy.

With taxation and regulatory costs putting pressure on margins, is the traditional sportsbook acquisition model becoming unsustainable?

You can already see that the model of using very high bonuses to attract players isn’t sustainable. There’s more pressure and less willingness to continue doing that. The UK is a good example of a market facing significant regulatory challenges. Operators are accustomed to regulation and changing regulation, however, and most have models sophisticated enough to balance marketing investment against the return they receive from a player.

I’m therefore not worried about the industry’s ability to adapt, but marketing expenditure is clearly coming under pressure in more heavily regulated markets. There is also a wider balance regulators have to consider. When regulated operators reduce their marketing, consumers can become less aware of which companies are regulated and legitimate, potentially creating greater opportunities for black-market operators. That’s not an easy balance either.

Can technology offset some of those cost pressures?

One hundred per cent. Technology can increase efficiency significantly. Successful advertising ultimately comes down to getting the right message to the right person at the right time. That sounds old-fashioned, but it’s still the reality.

Our proprietary platform uses first-party user data. We have around 200 million user profiles where we can understand whether someone is generally interested in sport, which sports they’re interested in and, in some cases, even which teams they follow. That allows messaging to become much more personalised, which has proven to be critical to marketing success. We also use live sports and event data to trigger advertising according to what’s actually happening. That improves the quality of the advertising because it makes the message more relevant.

Finally, we’ve been doing this specifically for the betting industry for 25 years. We’ve developed knowledge around where advertising should appear and built curated supply sources around the sector. If you’re buying a large amount of betting-specific advertising, there is simply a greater likelihood of finding the right players than when you’re using generic technology applying the same algorithms across completely different products and industries.

Finally, if you were reviewing an operator’s marketing plan ahead of the forthcoming domestic season, what would you tell them to do differently?

It obviously depends heavily on the individual operator, but I would emphasise the balance between acquisition and branding. Don’t forget the branding component. Operators should probably be doing more there rather than focusing exclusively on immediate acquisition. And if there’s one thing I’d tell them to stop doing, it’s measuring all of their advertising – particularly performance advertising – solely on the last click.