Analysis: The fight for Australia's airwaves

UK sports betting firms have flocked Down Under in the past two years and have not been shy in making the Australian public aware of their presence. But marketing is not as clear cut as it is back home and operators are starting to have to think outside the box to cash in on the Aussie gold rush.

Firstly CPA costs are extortionately high, with a number of domestic operators fiercely fighting to retain their market share. And secondly advertising restrictions are in place, prohibiting televised advertisements taking place during the course of sporting events.

With the exception of one state ““ Southern Australia ““ the prohibition exists solely as industry code adhered to by TV networks, but this is still a barrier for any reputable operator. “There is one state where that’s already in place, but the self-regulatory approach is being honoured by operators at the moment,” Jamie Nettleton, partner at Addisons Lawyers, said.

While this self-regulatory approach may be honoured for the time being, a national law could soon be adopted with Southern Australia providing the blueprint. The restrictions haven’t, however, stopped media assets in the nation being purchased at a frantic rate, ratcheting up competition and driving up prices as demand far outstrips supply.

“The advertising market now is co competitive. The core media assets are so expensive and they’re actually locked up now,” Luke Brill, managing director at Betfred Australia, said. This was no more evident than at the recent Spring Carnival and Melbourne Cup sporting events which saw egaming operators compete intensely to be the one to shout the loudest.

Ladbrokes, having entered the Australian market in September, launched a lucrative advertising campaign to make sure its presence was recognised by Australian punters. With bookmakers competing to shout the loudest, the challenge is to stand out and not be drowned out by the noise. Those lacking deep pockets will have to adopt a smarter attitude.

“Black-ops” marketing

The first signs of such an outside the box approach to marketing Down Under may have appeared with Ladbrokes’ sponsorship of the public WiFi at the country’s Spring Carnival horse racing festival. The UK bookmaker broke rank to sponsor the service, announcing its presence to punters in a comparatively cheap fashion.

The UK has long been a market that has required operators to think outside of the box when it comes to advertising, and Paddy Power has come to represent that thinking with its headline-grabbing stunts initiative and mischief department. At its recent analyst call, Paddy Power stated its intention to invest in Australia and forecasted that the market would be responsible for up to one third of group profitability next year.

Paddy Power group CEO Patrick Kennedy has seen something of a gap opening in the market, claiming that operators such as Unibet, bet365 and Tabcorp are now advertising far less aggressively than they once were. And Betfred’s Brill agrees the high-profile high-CPA war may be coming to an end.

Australia’s population of 20 million may not be the largest, but it boasts one of the highest smartphone penetration rates in the world at 65% and social networks such as Twitter and Facebook remain hugely popular. Betfred, entering the market organically rather than via an acquisition, will be looking to exploit these exact demographics in its advertising, with digital and social media set to play an important role.

“If you look at AFL, NRL and thoroughbred racing, you can’t watch any of those events without seeing hundreds of TV adverts or product placements and sponsorships. If we were to try and enter that route, we’d just get drowned out,” Brill said. With established and more traditional marketing channels becoming increasingly expensive, social media may be a predictable answer to a familiar problem.

But with Australia such a key part of the growth strategy at William Hill, Paddy Power and Ladbrokes it’s hard to see the marketing taps being turned off for now. And whether or not this move from Betfred and others is likely to affect the currently high prices of advertising in the country remains to be seen. However, it would be foolish for operators to ignore the inherent value in cheaper forms of advertising.