Analysis: The perfect World Cup marketing storm
On the eve of the World Cup, the gloves are off as operators battle to win the recreational punter
As hosts Brazil prepare to get the World Cup underway against Croatia in Sao Paulo tomorrow, sportsbook operators are limbering up for what is expected to be the biggest, and perhaps most crucial, betting event of all time.
For the next four-and-a-half weeks operators will be fighting to stand out from the pack with many ramping-up marketing spend in a quest to attract a raft of new punters and boost profits over the traditionally quiet summer period.
But the importance of this World Cup in particular has never been greater for UK-facing operators with the backdrop of the looming 15% UK profit tax expected in December.
The tax, which will also be applied to free bets and bonuses, is expected make a big dent in operators’ bottom lines with Paddy Power recently revealing the tax would have set it back 37m last year had the levy been active during 2013.
Gaming consultant Joe Saumarez-Smith believes the World Cup offers operators one last throw of the dice before the tax comes into effect at the end of the year.
“Clearly with PoC being introduced on 1 December, operators will see the World Cup as the final major chance to attract customers with free bets without the scope of bonus taxation,” Saumarez-Smith says.
“I expect there to be a very marked drop in marketing activity once the tax is implemented “ budgets will be slashed “ and more of a focus will be placed on customer retention and activation, and perhaps offers such as ‘refer a friend’,” he adds.
Customer grab
Earlier this week UK bookmaker Coral announced it was offering new customers 2/1 on Brazil to wear their yellow shirts during its World Cup opener against Croatia. The offer was made despite FIFA having already confirmed the tournament favourites would be wearing their famous jersey.
“We are now running a new customer offer of 2/1 (for up to £10) that Brazil play in yellow in their opening match on Thursday which is actually nigh on a certainty so really we’re giving away £20,” Coral spokesman Simon Clare says.
The bookie also appears to be offering one of the most attractive pre-tournament offers for customers new and old with it willing to refund outright bets should Brazil or second favourites Argentina lift the trophy. Max refund is £25 however current prices suggest there’s around a 40% chance of Coral paying out.
“It’s a strong offer, but these days offers have to be strong and compelling to get the cut through and achieve the desired effect of the acquisition of new customers and the retention of existing customers,” Clare said.
Value versus cash
A growing number of operators, however, appear to be leaning towards the offer of enhanced prices with the likes of Paddy Power, Boylesports and Betfred all offering additional value on certain markets “ an inducement Suamarez-Smith favours over free bets.
“It’s tough to stand out but free cash offers aren’t necessarily the best way of attracting true punters, with operators more likely to fend off bonus abusers – there will always be people willing to open a number of account in friends’ and relatives’ names,” he says.
“Instead, the offer of enhanced odds, albeit at limited stakes, is a much more sustainable business model,” he adds.
However, Clare believes operators are better equipped than ever when it comes to weeding out those looking to open multiple accounts to benefit from bookie offers.
“Online bookmakers are far better equipped now than ever before to either prevent individuals opening multiple accounts, or spot them soon after they’ve been opened, so the vast majority of customers taking up these offers are in fact genuine and therefore it is a very successful campaign mechanic,” Clare argues.
Paddy Power and 888 have devised a strategy which should attract the lower staking recreational punter and maintain interest throughout the tournament. To promote its top goal scorer market, Paddys are giving those backing a player a £5 free bet every time their selection scores while 888 is also offering £5 free bet on a match-by-match basis.
Money back offers are also proving popular as the World Cup nears with Betfair playing to its largely UK customer base as it offers those placing bets on England’s group matches a refund should the Three Lion’s lose the related match.
Ladbrokes also have a seemingly generous offer, giving World Cup outright punters money back should any of Messi, Neymar, Ronaldo and Suarez, win the golden boot “ which equates to a roughly 31% chance.
But these are just the first shots fired in what looks like being a month long marketing war.
Once the first game gets underway, all the marketers’ attention will turn to promoting its match prices which, with 64 games taking place over the coming weeks, offers firms plenty of opportunity to get the edge.
Who will come out smiling at the end of all this remains to be seen, and the operators will be hoping for some bookie-friendly results to soften the blow of what is already looking like an expensive summer.
The stakes have never been higher for UK-facing operators and as the tournament gets into gear the competition between them will only become fiercer.
And just like the World Cup, not everyone is going to emerge a winner.