If you feel like you are being bombarded by gambling advertisements, there’s a good reason: you are. Gambling ad spend is skyrocketing and companies are utilising sophisticated digital advertising strategies to target and personalise their products and services.

Last year gambling companies spent more than $258 million on advertising in Australia, a 168 per cent increase over 2011 figures, according to SMI numbers.

While regulators play catch-up with stricter advertising policies for broadcast media, the online sphere remains relatively unchecked as gambling companies divert growing advertising budgets into digital channels.

Gambling advertisers spent $39.5 million on digital ads last year in Australia, a 14.2 per cent increase on 2016 spend. With stricter regulations on broadcast advertising set to take effect in 2018 — including the banning of gambling advertising during daytime television — it is likely the digital share will increase.

While Australian gambling companies thrive, the increasing advertising puts vulnerable groups at greater risk, according to Dr Sally Gainsbury, Deputy Director of the Gambling Treatment and Research Clinic at the University of Sydney.

“Unfortunately, those most likely to respond to online ads are those most vulnerable to developing problems, including with higher problem gambling severity scores, those who spend more money on gambling and gamble more frequently, as well as younger people, males, and those from an ethnically diverse background,” Dr Gainsbury told Which-50.

Dr Sally Gainsbury

“Although there are regulations about showing responsible gambling messages in advertisements, these don’t appear to apply — or be enforced — for online ads. We see very few responsible gambling messages and warnings in social networking site posts by gambling operators and online ads.”

The way gambling companies buy digital ads is changing too. Programmatic ad spend more than doubled in 2017, and now represents a quarter of all gambling advertisers’ digital ad buys, according to SMI.

Programmatic is the automated buying and selling of media, allowing the real-time placement of ads in digital channels with minimal human involvement. It keeps costs down and guarantees impressions of specific target audiences.

Who gets targeted is perhaps even more important for gambling companies. While research shows gambling advertising in Australia has minimal effect in attracting new gamblers in a relatively saturated market, it is effective in retaining and increasing gambling habits of problem gamblers.

“It would be useful if gambling companies were required to be more transparent about their targeted marketing, or had some restrictions that could be enforced about targeted marketing. For example, gambling companies should not be targeting high-risk young males (aged below 30), or those from socially vulnerable backgrounds,” Dr Sainsbury told Which-50.

Digital marketing is allowing unprecedented targeting and personalisation. Australian gambling companies are very good at it.

Marketing success at a cost

Australia’s leading gambling brands are developing ever more-sophisticated marketing strategies.

In an August 2017 company briefing, Sportsbet marketing executives shared how they utilise “useful, personalised information as opposed to financial incentives” and concluded “Sportsbet is well placed to take advantage of regulatory change”.

A slide from a 2017 Sportsbet company briefing.
Source: Paddypowerbetfair.com

In September, Sportsbet insights analyst manager Jenny Filby echoed the message, describing personalised customer experience as the “holy grail” and explained how the company leverages data and advanced technology to stay ahead of competitors.

“Mapping the customer’s journey and understanding who is more likely to respond to advertising can all be translated through the data,” she told The Australian.

The marketing strategy has seen Sportsbet deliver impressive financial results and its Chief Customer Officer, Barni Evans, ranked as the top marketing executive in Australia.

A Sportsbet spokesperson declined to comment specifically on the company’s targeting strategies but told Which-50 overall it would prefer to see fewer gambling advertisements.

“Sportsbet has long been an advocate and driver for a reduction in the volume of advertising, acknowledging that restrictions are critical to the wagering industry’s reputation and prevailing community standards,” a company spokesperson said.

William Hill and Bet365 did not respond to Which-50’s request for comment.

There is nothing unusual about personalisation, targeting, and a customer experience focus in the marketing world. Indeed many of these practices are examples of effective digital marketing. However it is worth remembering that, according to growing body of research, gambling advertising has a disproportionately negative effect on problem gamblers.

Preaching to the converted

So those most likely to respond to advertising are, potentially, also those most at risk.

A 2014 Southern Cross University study found evidence that “advertising and promotion of Internet gambling increases gambling amongst existing gamblers.”

In 2016 another academic study found “A substantial proportion of the moderate-risk/problem gamblers reported that their problems worsened as a result of exposure to and engagement with social media advertisements for gambling.”

It is estimated there are between 80,000 and 100,00 problem gamblers in Australia, with a further 230,000 to 350,000 more experiencing moderate risks that may make them vulnerable to problem gambling. The cost of problem gamblers is quickly passed on.

According to the University of Sydney Gambling treatment clinic, the social cost of gambling in Australia is around $4.7 billion dollars each year, and for every problem gambler up to ten more people — including family, friends and children — suffer.

In other words, the marketing success of gambling companies potentially contributes to a significant social cost.

The regulation problem

Recent regulatory changes have attempted to limit the ability of gambling organisations to entice gamblers with financial incentives like free bets and lines of credit, and to limit gambling advertising during daytime sports telecasts — a loophole previously exploited by many gambling companies.

It is a “good step” according to Dr Gainsbury, but she would like to see more done to combat the increasing advertising.

“There is also a need to have public health and education campaigns that counter the gambling advertisements and more accurately depict the likely outcomes of gambling,” she said.

The latest regulatory measure prohibiting the extension of credit lines to customers, and impending tax increases, prompted William Hill to review its Australian operations and to claim tighter regulation would cut its profits — which globally were expected to reach $500 million in 2017

“I don’t have a violin small enough for William Hill,” said Senator Xenophon, a long-time proponent of gambling regulation.

“The fact that they are thinking of moving out of Australia because of this very reasonable and well overdue ban on credit betting indicates how greedy and desperate they are.”

And while taxes and broadcast regulations tighten, digital advertising relies largely on self-regulation and advertising codes of ethics.

The piecemeal approach to online advertising focuses mainly on the content of advertisements. Currently, there are no rules regarding the frequency and placement of advertisements, with the exception of some protections to limit exposure to minors.

Some gambling companies also appear to hold little regard for advertising bodies or their codes. In 2016, Tabcorp questioned the relevance of the current Australian Association of National Advertisers code, saying it “does not have broad endorsement”.

The peak trade association for online advertising in Australia, the Interactive Advertising Bureau (IAB), which provides Australian online advertisers with advice and guidance on industry best practice and regulatory affairs, does not currently have any gambling companies as members.

While broadcast media and provocative campaigns continue to attract the headlines, gambling companies are developing a strong digital presence. Their place in digital advertising may yet attract further debate.

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