Nielsen Report: US Online Gambling Advertising Boosts TV Revenue

The local TV industry is one of the biggest winners of the 2018 Supreme Court verdict that lifted a ban on sports betting in the United States. According to ad-spend data released by Nielsen, money spent on online gambling advertising on TV has ballooned since the repeal of PASPA, as the number of states with legal sports betting increases.

According to Radio + TV Business Report (rbr.com), numbers show that spending on local TV jumped significantly in the last three years. In the first quarter of 2021, $153.6 million was spent. In contrast, only $10.7 million was spent in 2019. That is a nearly 1,400% increase.

Yahoo! Sports points out that online gambling ads rank 11^th among the 1,200 product categories tracked by Nielsen, accounting for 2% of all spot TV spend.

Sports Betting to the Rescue in a Pandemic

In its Total Audience Report released in March this year, Nielsen showed that total TV advertising in the United States dropped to $76 Billion in 2020 (from $84 billion in 2019).  The most significant declines were seen in the restaurant, auto, and retail categories, three industries negatively impacted by COVID-19.  Traditional advertisers either reduced their spending or stopped it altogether.

As such, online gambling ads were a blessing to local TV stations in an otherwise very problematic year.

Rbr.com points out that online gambling has the potential to drive close to $590 million in the local spot TV market within three years. That is excellent news for the local US TV market, which accounts for 80% of online gambling advertising.

Of course, the glut of gambling ads on TV also raises concerns.

• Steve Ruddock and the American Gaming Association discussed the future of sports betting advertising in the USA.

Most Online Sports Betting Advertising Is On News Programming

According to Nielsen, an interesting trend in sports betting advertising is the largest share of these ads is allocated to news programming.

As per Nielsen:

“Given the sports betting focus of the top advertisers, sports programming is a key way to reach sports bettors. Surprisingly, the largest share of online sports betting ads is currently allocated to news programming. One reason attributable to this fact is that local news stations have much more control over their total ad inventory (versus sports programming which typically occurs in primetime), and as a result, there is more flexibility to place ads in news. It’s also worth noting that the share of these ads in news programming has increased to almost 40% over the past year. The increase isn’t without its merits, as news offers significant reach and an opportunity to engage new spenders, growing the consumer base.”

Which Operators Spend the Most on Sports Betting Ads?

FanDuel and DraftKings were the biggest spenders who bought the largest share of TV ads in the sports betting genre in Q1, 2021. Both focused exclusively on sports betting. Together, they were responsible for 66% of the sector’s local TV spend. Bet MGM was third, spending $24.9 million over the same period.

Nielsen called the ad campaigns “prolific” and produced to specifically appeal to “rabid sports bettors” in the US. The report also said that these campaigns were “spot on” as the 7.3 million daily fantasy bettors in the country have an aggregate income of more than $780 billion.  The report also noted that the average new online sports bettor is younger than other bettors, with 77% being male.

The biggest spenders and their total spending share in percentages:

• FanDuel Sportsbook – 37.5%
• DraftKing Sportsbook – 28.4%
• BetMGM Sportsbook – 16.2%
• BetRivers – 6.1%
• Betfair – 4.4%
• PokerStars – 3.8%
• All other brands – 3.6%

Huge Growth Potential for Online Gambling Advertising

Nielsen concludes in its report that the overwhelming sea change across the sports and media industries regarding betting ads highlights the significant growth opportunity for local and national TV.

Last year, online or digital sports betting-related ad spend increased across 180 out of the 208 designated markets Nielsen monitors. Online or digital sports betting spend in 185 of these areas exceeded $300,000 – an increase from less than $50,000 in those same areas in 2017.

Nielsen said that even though sports betting activities are limited to select states where it is legal, advertising in this category increases across the majority of the US’s designated market areas.

“That spells opportunity for local news organizations and advertising agencies alike,” concludes the report.

As individual states begin to embrace mobile betting, local TV spend is only expected to increase.

Yahoo! Sport predicts that once state-by-state legalization efforts reach a critical mass, much of the ad spend targeting local TV stations will most likely shift to national TV and broad digital marketing efforts.

“After a business reaches a certain size, it’s simply cheaper (and a whole lot more convenient) to buy local ad inventory rather than try to piece together a series of local spots,” according to Yahoo! Sports.