By Simon Collins, Director, Cashcade Ltd.
How is the online gambling industry making TV advertising work so well while established brands are giving up on it?
Pick up any marketing magazine or the business section of a newspaper and there’s likely to be a story about the death of TV. Not watching TV of course. There’s still plenty of people doing that, even if they are doing so with a laptop on their knee whilst updating their Facebook status or ‘tweeting’ their thoughts about the footy or their favourite show.
No, it’s the financing of the TV industry that’s undergoing a transformation. Household brand names have lost faith in the ability of the 30 second advertising slot to sustain awareness and sales, which means the main source of revenues for most broadcasters has been slowly drying up.
The reasons for this change boil down to ‘media fragmentation’, meaning that people have a lot more choice when it comes to where they get their news and entertainment. That and the fact that…
…people can now remove advertising they don’t like from their TV viewing, using personal video recorders. The result is that big brands have reviewed the huge sums they spend on TV leaving broadcasters in trouble. Including C4 which has been lobbying the government for a bailout and ITV which recently fell out of the FTSE-100 for the first time in its history.
So why is it that, against this background, the online gambling industry has seen such success through TV advertising, building not only valuable brands but also real revenues?
Just take a look at the post that Phil Fraser wrote on this blog a few weeks back. In 2008, online bingo sites alone spent over £7million on TV advertising in the UK, according to Nielsen Media Research. Now that may not equate with the gazillions spent by other industries such as the financial services sector but its rate of growth is much higher. And of course, as a business, online gambling is very new.
Indeed, I believe it’s this youthful outlook that has allowed us to gain massive value from TV advertising while established brands see it as a medium that has had its day. As a new industry we are not restricted by the ‘normal’ conventions of brand building. We have rewritten the rules to suit today’s media world.
For instance, in a little less than four years we have created a brand that is one of the best recognised in the UK. And not just in its sector, but across all categories. Namely Foxy Bingo. And that success is in part because of our investment in TV advertising – £2.25m in 2008 alone. However, only in part and that’s the point. We have taken an integrated approach and made traditional TV advertising work alongside online channels, thereby making them greater than the sum of their parts. Of course, every marketing director in the country would say the same thing. However, if that’s the case why is ITV currently selling ads at 1988 prices?
It’s because marketeers are only paying lip service to making the web and TV work together and thereby they are missing a trick. Some advertisers believe that it’s enough to put the URL of their website in tiny letters at the end of their advert for a few seconds – if that. And maybe only then because someone at the advertising agency has remembered to make a quick call to the web designers to find out what the web address is!
At Cashcade we take a radically different view of brand building in the modern age. TV is important but so is the web in terms of, crucially, SEO and affiliate partners, as well as PPC programmes, portals, viral content and more recently social sites such as Facebook. And let’s not forget the millions of pounds in prizes that we pay out each year too. Only by managing this web and TV media mix and encouraging one to work alongside the other can valuable brands be built in today’s world.
For instance, we know that when people are watching TV and they see one of our ads, they might just search for ‘online bingo’ and see what comes up. So we make sure that our brand is presented higher than all of our competitors in search engine rankings. Just tagging a tiny URL on the end of an ad and hoping people spend time tracking down your website is a total waste of time and money.
And of course, we measure everything fanatically and understand the impact of every media investment we make on our business in terms of lifetime customer value and real returns. Not just through abstract ROI analysis such as that provided by BARB.
Some people say our business is different because our entire proposition and experience is online. But I don’t buy that for a second. It’s just lazy thinking. Any product, service or brand could benefit from the approach we take. Most just can’t break out of their antiquated mindset.
Hopefully, big established brands will continue to overlook the powerful ways in which the web can be combined with TV to build brands. Because this oversight has meant that the cost of TV advertising has fallen dramatically in recent years. Which is good news for the rest of us who know how to make it work.
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Really interesting post, and we have been tracking the increasing number of online brands that have been using TV – 175 at least last year alone. Most of them come back time and time again which suggests their TV spend is working and reinforces the points made in our recent TV + Online study with the IAB that the two media channels work briliiantly together. Indeed, most of our ‘household brand names’ recognise this fact, which is why I must disagree with the assertion about falling revenues. ALL media are losing revenues – including online display – but TV faces a perfect storm caused by oversupply (audiences just keep getting bigger and we aren’t allowed to manage supply – we must sell everything), regulation (loss of some market categories and CRR) and recession. Despite that, TV’s share of display advertising revenues is actually consistently INCREASING, despite what you may hear in the press…Oh, and people are not avoiding TV advertising on their PVRs – they are using them to find more engaging programming and they actually increase their viewing to ads (at normal speed) whenever they install this technology. Not a lot of people know that…