Sports-Betting Ads Drive Strong Q1 Ad Business in New York
By Robert Digisi
A starting pistol sounded on January 8th when mobile betting launched throughout New York, the U.S.'s fourth largest state. With 19.3 million people and 11 major league sports teams watched in New York City metro alone, the state immediately registered the highest volume of wagers.
Operating for only 24 days in January, New York yielded about $1.7 billion in wagers, unseating New Jersey. The Garden State was one of the first states to offer online sports betting, and it came in second at $1.3 billion. Combined, the two states brought in 36% of the total national volume of $8.36 billion, according to Sports Business Journal.
The trends continued in February and March with New York and New Jersey again leading the 19 states reporting their betting volume. Stakes are high for the nine sportsbooks that paid over $225 million in application fees for the rights to do business in the state. Their success hinges on grabbing consumer attention, and that means advertising on the programs that sports fans watch.
While the Super Bowl is a huge draw, sports fans turn to cable television in droves after it's over, and all through the year. Consider that 80% of cable-viewing households watch sports and sports-related content, and 97% of the top 30 cable telecasts were sports related. Sports viewership has been strong year-to-date in the New York Metro market. The NCAA Men's Basketball Tournament saw a 17% increase in viewership for the Final Four on TBS over the prior year in the adults 25-54 demo. Round one of the NBA Playoffs across TNT and ESPN were up 8% for adults 25-54 versus the prior year, and the Mets regular season telecasts on SNY are averaging a 20% increase in the same demo compared with last season to date.
"It's been exciting working with our sportsbook partners on the New York launch," said Tom McLoughlin, Vice President Regional Sales, New York Interconnect (NYI). "The category has grown significantly. Yet with any new vertical, there are challenges. The high tax rate in New York concerns many advertisers. Fortunately, NYI has the tools to make every dollar count by offering everything from precise data to geo-targeted solutions and customized local sponsorship executions."
While network and league ad restrictions have opened up, with sport betting permitted in most live sports telecasts, NYI has the ability to go even further to reach sports viewers. "We have over seven million set-top boxes that report on second-by-second viewership data," McLoughlin explained. "We can help the sportsbooks be on the right networks, the right day parts and in the right programming. Maximizing our clients' ad spend is our No. 1 priority and utilizing the best data in the marketplace is a huge advantage we bring to our advertiser partners."
McLoughlin explained that NYI's set-top data helps sportsbooks figure out what other programming sports fans are watching, beyond the games themselves. "We can identify households that have watched the NBA playoffs on TNT or the Yankees on YES or NCAA March Madness basketball and what other networks those households tune in to," he said.
Regional advertising is a particular draw for sportsbooks to drive strong reach and frequency and take advantage of customized sponsorship opportunities specific to a given market. The results of local advertising are significant.
Hadassa Gerber, head of research at the TVB trade organization, discussed the results of a consumer survey in an April 8 interview with TVNewsCheck: "We asked which platforms were the most effective for awareness and consideration for placing a bet, and television really dominated."
Gerber also noted that "96% of those who saw a sports-betting ad took some sort of action; 46% opened an account online; and 42% placed a bet. We have not seen this kind of response from any other category."
Other campaign performance metrics come from data partnerships. "Utilizing ad exposure data, we can deterministically prove performance showing which households were exposed [and] then visited website X more than non-exposed households as well as other metrics," McLoughlin explained. "That's only available because we can leverage set-top box data in a privacy compliant manner from the cable companies."
Additional value comes in NYI's ability to offer customized solutions for sportsbook advertisers that want to run different offers by state per the different tax rates within the tri-state area (New Jersey 13%, New York 51%, Connecticut 14%). "We have the ad-targeting technology that allows sports-betting clients to run the same spot across the entire tri-state but to customize the last five seconds [for info specific offers to New York, New Jersey and Connecticut]," McLoughlin said.
There's also additional value to be found in local cable news networks, like Altice's News12 and Charter Spectrum NY1 News. New York Interconnect offers news sponsorship opportunities that include on-screen logo integrations.
The New York sports-betting business is an impactful new vertical. With conversations about increasing the number of operators from nine to potentially 16 in the future and lowering the tax rate, all eyes are on New York. These advertisers will rely even more on the efficiency that comes with data-driven advertising tactics. While the category is still in its infancy in the New York market, the fact that it's here to stay seems like a sure bet.