Friday view: Mobile marketing update

The fight for customers is intensifying and with more rigorous restrictions on gambling advertising on the way, what does this mean for a constantly shifting mobile advertising market?

There’s something of a perfect storm brewing within UK egaming marketing. Player acquisition costs are set to rise with the UK’s looming Point of Consumption tax expected to kick off a marketing war in advance of its introduction in December. Meanwhile, the government is widely predicted to follow up the new Gambling (licensing and advertising) Bill with stricter controls over where, when and how gambling firms can advertise.

With gambling advertising, particularly bingo and sports betting, a commonplace sight on daytime TV and barely a month passing without another firm falling foul of the Advertising Standards Authority, there is a growing concern that operators will have to tone down their TV advertising. And a pre-watershed ban is looking increasingly likely. But every crisis presents an opportunity and as the failsafe model of throwing a few million at TV advertising becomes less easy to put into practice, so alternative avenues for creative marketing arise.

Step forward the world of mobile advertising. And as you would expect, it’s one the online gambling world is already making big strides in.

A world first

In early July, Paddy Power made a “global first” in the mobile advertising sector with the design and release of dynamic HTML banners on the Google DoubleClick network. The firm used the banners to display live feeds of odds and offers in-app that were updated dynamically.

Paddys collaborated with Google and its advertising agency DoubleClick to develop the banners, which formed part of the operator’s ‘Brazil Nuts’ advertising initiative throughout this summer’s FIFA World Cup. It took several months of development before the banners were ready to be released, and the code was stable enough to be used in the mobile network.

“Both Paddy Power Design and Google invested a lot of time and effort into producing dynamic HTML banners, overcoming many issues along the way to create a solution that is unique to the market and make our in-app banners stand out,” a Paddy Power spokesperson said. “Both teams look forward to pushing the boundaries of what is possible in banner advertising in future projects.”

The banners complemented a raft of other advertising efforts launched on mobile by the operator during the tournament. A World Cup dedicated app was launched in the app store featuring bespoke content and special offers, while an innovative new bonusing plan was launched that rewarded people for spreading the word themselves.

The operator paired with social selling network Buyapowa to facilitate the programme, which prompted users to commit to a specific bet and share it with their friends over social networks, rewarding customers based on the pooled number of referrals they can achieve. The price of the bet increases as soon as a specific number of people have committed, with another prize given to the customer with the most referrals. Customers are prompted to share the offer with friends over Facebook and Twitter.

Bite of the Apple

The mobile-friendly duopoly of Facebook and Twitter aren’t the only social networks on mobile gambling operators’ radar. Betfair was first to embrace the mobile-only instant video and picture messaging app Snapchat in February this year, using it to deliver time-sensitive price boosts and special offers to customers.

Exclusive codes to price promotions were delivered to everyone on Betfair’s Snapchat contact list, encouraging people to bet directly on their mobile devices. The service bears similarities to BetVictor’s Instabet app, which delivers time-sensitive price promotions using the app’s push messaging capabilities.

Outside of social networking marketing, which has proved hugely effective in driving downloads so far, the landscape is more uncertain. Real time bidding is now widespread and there is no shortage of inventory for marketers with a big budget to spend, while YouTube is emerging as a real alternative to TV advertising. If anything, there is almost too much choice.

Apple, of course, has its own advertising channels that app developers and mobile managers can exploit. Its iAd advertising programme rivals Google’s own initiatives by allowing firms to bid for advertising space in the thousands of free gaming apps that populate its online store. These operate on a pay-per-click basis and allow operators to largely target who they advertise to, a must-have capability for online gambling companies.

While this is nothing revolutionary, iAd only opened up to gambling firms at the turn of the year having previously barred them from taking part. Apple is understood to be approaching the end of a trial period for gambling firms to test the water with a decision due before the end of the year over whether it will continue.

Mark Baker, head of media at advertising firm Active Win, suggests that the protection Apple gives its branding may prevent it from being a channel worth investing heavily into, especially with the wealth of other options on the table. “I’m not massively excited [about iAd], there are so many networks and so many people offering inventory,” he says. “For me, it’s just another channel to test.” A fresh mobile advertising network is unlikely to do much harm, however, as although it reported costs-per-install fell in June, mobile analytics firm Fiksu said its “cost per loyal user” index breached the $2 mark for the first time in May and was up 49% year-on-year in June to $2.23.

This rise was attributable to Apple temporarily renewing its pushback policy on some forms of incentivised marketing, and the impact of the FIFA World Cup on advertising spend with a number of companies – both in and outside the gambling space – competing to be heard during the competition. “When you look at both the drop in CPI and the peak in the loyal user acquisition costs, it’s clear that it’s harder and more expensive than ever for brands and app developers to get – and keep – loyal users,” Micah Adler, CEO at Fiksu, said.

Some of the tactics used in the mobile marketing war are also creating issues with potential consumers. One of the most insidious is javascript redirects booting users out of Safari and directly into an app download page. A coding fault by a marketing firm meant William Hill had to deal with a backlash on social media when it accidentally used the practice and an apology swiftly followed. Apple seems to have caught wind of the practice and has taken such a dim view of it that coding within the iOS8 edition of its Safari browser will allow users to block the practice entirely.

Rivals on the horizon

But while Apple continues to be the dominant platform in terms of player revenue, there are plenty of rivals for advertising dollars. Yahoo!’s acquisition of app analytics firm Flurry was announced in July with Yahoo! chief executive Marissa Mayer stating the purchase to be a potential aid to its declining advertising revenues, particularly on the mobile platform.

Financial details were not disclosed, but the rumoured price of between $200m and $300m would make Flurry one of the firm’s largest acquisitions. Flurry’s business revolves around helping people deliver more personalised adverts through in-depth analytics and, alongside Yahoo!’s exhaustive content, could rival the platforms Facebook, Google and Apple have assembled. “The convergence of one of the world’s largest content companies and a mobile ad network helps both parties create stronger monetisation strategies by connecting inventory and demand,” says Raj Aggarwal, CEO of analytics firm Localytics.

What it arguably raises is the biggest problem for operators looking towards the mobile platform: too much choice. Video ads are becoming more commonplace on mobile and tablet, in-app advertising is becoming more intelligent and more open to gambling advertisers, while the likes of the Flurry and Yahoo! deal shows the market will continue to develop and consolidate.

But one trend is likely to dominate. The impact of social media on mobile marketing, can’t be underestimated. Mobile and social are tightly intertwined with users spending more and more time in the Twitter and Facebook apps and both platforms doing everything they can to keep them there with more embedded video content and pages that keep users within the app framework. Both are also keen to develop integrated payments, which could be the ace up their sleeve.

Twitter is developing a ‘buy now’ functionality and in CardSpring has acquired an ecommerce firm that can offer users coupons linked to their credit card that can be redeemed at a later date. Facebook is also due to launch an instant ‘buy’ button should customers respond to a particular advert they see on the network. Whether either of these are opened up to gambling operators remains to be seen, but as a sign of things to come it shouldn’t be ignored.

As TV becomes more competitive, expensive and restrictive, the world of mobile and social marketing is becoming more creative, open and efficient. As one door closes another one opens and Twitter, Facebook and maybe even Yahoo! Mobile video ads could play a major role in the future of acquisitions.