Will Advertising During COVID Provide A Good ROI?

When things return to normal, some gaming companies might point to one decision that helped them survive the shutdown economy. Should they be advertising during COVID?

In October 2019, Google signed off on several changes to how, when, and where companies can advertise online. This announcement applied to gaming companies.

At a time when all physical casinos are shut down, the only source of revenue for some operations is the digital kind.

The question remains: Is there value to advertising iGaming and other digital products during this crisis? Or would advertising during COVID just be a waste of money at a time of shrinking revenues?

Google’s 2019 Announcement On Gaming

On October 21, 2019, Google announced that companies from Indiana, Iowa, Montana, Pennsylvania, and Rhode Island could run sports betting ads.

Also, international gaming companies would be allowed to promote themselves in Colombia, Kenya, and Nigeria. Companies must be licensed in the country where they planned to advertise.

At the time, it was just another marketing option. Now it’s one of the only ways to attract customers to the gaming industry.

Current Advertising Challenges

During the shutdown, companies can run Google ads, advertise on radio, and promote on social media. That’s it.

They can’t film TV ads, because the crew needed to film them would exceed federal and state quarantine orders across the country.

Just because companies can run ads on particular channels, should they? Is there an actual return on investment? That’s questionable.

Impact Remains Unclear

The consulting firm Taylor Francis recently conducted a study on the subject. They examined the impact of online advertising on would-be gamblers.

The group interviewed 50 people from the general public and 31 Internet gamblers seeking treatment. They found that ads did little to bring in new business.

Results Of Online Advertising Study

“It remains unclear if gambling advertising and promotion increase demand for, and consumption of, gambling, or only affect market share distributions without increasing total consumption,” the Taylor Francis report states.

“In-depth analysis of interview transcripts revealed limited reported effectiveness of advertising and promotions in converting non-gamblers to Internet gamblers.”

Advertising Alone Is Not Enough

Advertising alone didn’t convince any of the general population to gamble. Instead, the report found those people showed more interest in response to free bet and deposit offers.

Take, for example, this statement for the study from a 33-year-old man. He heard an advertisement on a radio station. He said he only became interested, though, when the ad mentioned a free incentive.

“It was a no lose situation that I was sure to break even,” the man told Taylor Francis employees. “So I started to gamble on that, then I actually ended up winning. And then I used the winnings to bet on something else. Just went from there. I started finding other bet sites that were offering free bets as well.”

The ads had only slightly more impact on the long-term gamblers, but they also required an incentive.

“A proportion of treatment-seekers reported increased gambling, particularly associated with bonus offers that required matched deposits and gambling before any winnings could be collected,” the document states.

Even with the group of long-term gamblers, advertising alone wasn’t enough to draw them online. There needed to be an incentive attached.

It should be noted that there was no age bias either. The study included people ranging in age from 18 to 62.

Targeted Advertising And Pay-Per-Click

Still, the firm argued, they weren’t saying it was a bad idea to advertise. Instead, companies need to be more selective in how they approach advertising.

It’s not enough to put out a generic ad and hope it gets seen. When it comes to advertising during COVID, you need to focus on the pay-per-click concept.

PPC Offers Targeting Tech

Pay-per-click advertising is all about search results. You pick a keyword and design an ad around it. You pay Google, or another browser, for the ad. It’s a pretty simple transaction.

The more money you bid, the higher you’ll appear in search results. Now here is where companies get some comfort. The advertiser only pays the search engine when someone clicks on the ad.

You can also start and stop the ads at any point. This eliminates concerns about a long-term or an inefficient contract.

Do PPC Ads Work?

There are some benefits to PPC advertising because they are relatively easy to manage, but are they beneficial?

For small companies, the answer is no. According to a recent study from Investcro.com, Internet ads have a click rate of 0.1 percent. That means only one in one thousand ads actually gets clicked.

Although if you pay per click that means you don’t really lose money. But at the same time, it also doesn’t help your business either.

Effectiveness Of Internet Ads

Digging more into the data, now that everyone is trying to market their product online, people are tuning them out.

On average, Internet users see 1,700 ads per month. They will only view less than half of those. That means more than 850 businesses wasted their time. If the business paid employees to build the ads, that money went for nothing.

It also depends on what group you’re targeting. That same Investcro study found men 18-24 are the most likely to click an ad. They click ads 44 percent of the time. But every other age range decreased from there. Men aged 25-34 are the least likely to click at 33 percent.

Although 18-24 year-olds are the most likely to click, their disposable income is currently reduced. If there is less than a 35 percent chance of getting any other age group to click, is advertising during COVID worth it?

There’s No ROI From Advertising During COVID

While it’s up to each company to decide, the data seems to argue against investing in internet ads right now. The return on investment just simply doesn’t appear to be there.

About the Author

Brian Carlton

Brian Carlton

Brian Carlton is an award-winning journalist who has covered casinos, the gaming and finance industries for more than a decade. His work has been published by the BBC and a variety of newspapers across the U.S.
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