Poll: Is William Hill right to reduce marketing spend?
Operator H1 results revealed marketing as a percentage of revenues was down from 28% to 22%
Now we are in H1 results season, the true impact of the UK Point of Consumption tax is becoming clearer. Last week William Hill reported a 20% decline in online profits after taking a £35m hit from the 15% levy.
The new regime has prompted operators to take a closer look at their expenditure with many, including William Hill, opting to “optimise” marketing spend in order to soften the impact of the increased tax burden.
Last year, William Hill set out plans to make £15-20m of cost savings in 2015, with the majority to be derived from greater marketing efficiencies. And the firm appears to be ahead of schedule after last week reporting a reduction in marketing spend of £11m in H1.
Marketing spend in terms of a percentage of revenues fell from 28% last year to 22% this year, albeit the comparative period in 2014 included a World Cup when marketing spend would have been higher than normal.
But despite the overall reduction, William Hill CEO James Henderson said the operator remained competitive and would still command a 20%-21% of share of voice of live UK football, behind only bet365.
And the reduction in spend doesn’t appear to have dented top line growth with H1 revenues up 7% overall and 16% in the UK against tough World Cup comparatives.
Yet as William Hill tightens the marketing purse strings, the likes of Betfair and Paddy Power have taken a different stance, deciding to make cost savings in other areas rather than reduce marketing firepower in an increasingly competitive market.
With this in mind, this week’s eGaming Review poll want to know whether you believe William Hill has made the right decision in reining in marketing spend or whether market conditions require an uptick in expenditure. Have your say on the right-hand-side of the page.