Sports Betting Brands Target Local TV With Advertising Spends
There is no doubt that the popularity of online sports betting has been on the rise at a rapid pace in the U.S. The movement to legalize online sports betting has seen significant success as of late and is expected to continue unlocking new legalized markets for companies operating in the sector. However, this will also result in increasing competitiveness for control of the new burgeoning market. One way this is manifesting is in the local media advertising trends.
Local TV sees big ad spending from online sports betting and gambling
The first quarter of 2021 has already seen an unprecedented amount of spending by online sports betting and gambling companies on local television advertising, something that was glaringly evident in DraftKings’ Q1 earnings reports. These companies purchased $153.6 million worth of local television spots, making the online sportsbook and gambling industry one of the largest spenders for this type of advertising. This is notable considering that online sports betting and Internet gambling was almost a non-existent sector not too long ago.
FanDuel and DraftKings lead the pack on ad spending
Out of the entire online sports betting and Internet gambling companies, FanDuel and DraftKings spent the most on local television spots during the first quarter of 2021. FanDuel spent $57.7 million on advertising via local television, accounting for 38% of the sector’s spending on this advertising category. DraftKings spent $43.6 million on local television buys.
These two leading brands accounted for 66% of the local television advertising buys from the online sports betting and Internet gambling sector. However, BetMGM also bought a significant amount of local television spots, spending $24.9 million during this time period.
Spending on national TV ads down dramatically from prior years
In contrast with local television, spending on national television advertising has been significantly lower from the online sports betting and gambling sector. FanDuel and DraftKings spent a total of $15.4 million combined on national television spots which is far less than what was spent on the local level by these two brands. This is an especially low amount since this also includes the $5.5 million that DraftKings had spent for Super Bowl LV.
The relatively low spending on national television advertising from the sector is a notable change from 2015 when FanDuel and DraftKings spent $305.5 million on national television spots. The cause of the sector’s switch to local advertising was a 2018 U.S. Supreme Court decision that allowed states to start legalizing gambling.
The court decision struck down the Professional and Amateur Sports Protection Act of 1992. Up until this action by the U.S. Supreme Court, FanDuel and DraftKings focused on national advertising with the objective of attracting users to their fantasy sports platforms. Local television spending for the online sports betting and gambling sector is expected to reach $590 million by 2024.
The future for online sports betting stocks
Increased spending and projections for continued large increases in local television advertising from the online sports betting sector portends a growing market for platforms like FanDuel and DraftKings. Although the competition is fierce, there is a huge untapped market that will be open for the taking as legalization efforts continue to succeed throughout the U.S. This presents a serious bullish potential for sports betting stocks in the near future.