TV Sports Betting Ads Volume is Down
According to the latest Nielsen study, TV Sports Betting Ads Volume are down 33.3% since 2021. The study was commission by the American Gaming Association (AGA) to study sports betting advertisement trends. Here is what they found.
The report suggests that the decrease in sports betting ad volume can be attributed to a shift in localized marketing strategies as more states legalize sports betting.
TV Sports Betting Ads Volume is Down since 2021
According to the report, advertising by legal sportsbooks plays a crucial role in educating consumers about legitimate betting operators and guiding them towards safe betting options. As sports betting expands into new states, legal operators often launch advertising campaigns to raise awareness and capture market share. However, as these markets mature, the level of advertising naturally declines.
In addition to the decrease in ad volume, sports betting TV advertising units also experienced an 11% decline year-on-year. In 2023, sports betting accounted for only 0.8% of the total national spend on TV advertising and held a 0.4% share of the total TV advertising market. In comparison, alcohol held a 0.5% share, fast food held 3.8%, and pharmaceuticals accounted for 14.1%.
To put it into perspective, for every sports betting ad on TV in 2023, there were eight ads for fast food and 31 ads for pharmaceuticals.
Specifically looking at TV advertising, spend on gambling ads fell by 15% year-on-year, while digital ad spending declined by 17%. Radio ad spend remained relatively unchanged.
Sports Betting Ads Spending is down by $210 Million
The decline in sports betting ad spend on TV amounted to $210 million, representing a 23% drop compared to 2022.
The report also examined the overall prevalence of gambling advertising in the US. It revealed that gambling ad spend slowed by 14% year-on-year across all channels, reaching its peak in 2022 but declining in 2023. Notably, this was the first non-pandemic-related decrease in gambling ad spend since 2016.
Ad expenditure and promotional incentives inundated recently legalized states. Major publicly traded companies, like Flutter (the majority owner of FanDuel) and DraftKings, informed investors that it might take up to three years for each new state to generate profits, considering the high costs of acquiring customers.
Nevertheless, the pace of legalizing sports betting is now decelerating. Consequently, the necessity for the same level of promotional expenditure is also diminishing.
Furthermore, investors anticipate a profitable year in 2024, or at the very least, a positive EBITDA, from sports betting firms. Therefore, online sportsbook software companies are placing greater emphasis on cost management.
Having said that, the slowdown in advertising spending for sports betting may simply indicate the maturation of the industry, rather than a concerning trend.
Sports Betting TV ads Volume is Down for the Second Year in a Row
According to the study, that this is the second time in a Row that Sports Betting TV Ads were down. On a year-on-year basis, the TV Ads were down by 4%.
Across all media channels, the spend on sports betting ads decreased by $210 million in 2023, marking a 15% decline from the previous year. Excluding daily fantasy sports, the decline was even more significant at 21%.
Furthermore, the volume of sports betting ads decreased by 4% annually across all channels and by 20% from its peak in 2021.
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