Online Gambling Advertising – Manna From Heaven?
As more states legalized online gambling for sports betting in the last few years, the major online gambling services began spending on advertising in a big way. These new ad dollars continue to be a welcome sight for local TV and radio stations, as well as other ad platforms, especially since there is very little political advertising this year and categories like Auto are proving more difficult than expected. Perhaps the analogy to manna coming from heaven is not so farfetched.
At present, there are 10 states that allow online gambling sports betting while you are physically located in those states. And, that number is expected to grow with Arizona coming on later this year and Maryland and New York possibly late this year or early next year. For gambling advertisers, advertising platforms that target local consumers are the desired avenue as it allows the advertisers to target advertising in states (or nearby states) that allow online gambling services.
Working with data from Nielsen Ad Intel Service, BIA has generated an estimate for online gambling advertising spending with local TV and radio stations and other platforms.
For local television stations, BIA expects it to be over $445 million in 2021, growing to over $570 in 2022. In later years it might even reach over $800 million depending on whether some other states start to allow this activity.
For local radio stations BIA expects over $95 million to be spent in 2021 by online gambling services, especially on local sports formatted radio stations, a rich source of potential sports betting gamblers.
Other advertising platforms will also benefit from the online gambling ad spend. Online and mobile platforms, with their great ability to target, will see nearly $294 million in 2021. Local cable systems, carrying a substantial amount of sports programming will also see a considerable amount of spending by these services, over $118 million in 2021.
It is very interesting to see that local traditional outlets – local TV, radio, and cable – is getting over 50% of this vertical advertising dollars right now. With the specific need for local marketing, gambling advertisers are relying on the effectiveness of local traditional outlets to help them build their brand awareness.
Over time, we expect larger increases in the amount spent with the online/digital platforms, but local traditional outlets should also see increases. Some have argued that the spending on local traditional outlets will subside some as these brands become very well known. However, we would expect a strong 2nd half of 2021 for these services spending as the college and pro football seasons start up with all of the interest in those sports.
Summing up, these online gambling services had to get the word out that they are now available and open for betting. Already this year they have spent considerable sums to get that message out, and we expect that significant spending to continue with strong growth throughout the year. All advertising platforms, including the local traditional ones, will benefit. Given the lack of significant political advertising revenue in 2021, this new vertical is a welcome surprise.
BIA’s Online Gambling Forecast for all local television markets is available for purchase on the shop. BIA ADVantage clients can login and download the full forecast in the platform now.