Australia: Evolution and Opportunity
Published 7th April 2015
So much haschanged in the last four years since I moved to Australia from the UK that it’s been difficult to keep track. However, here’s a quick run-down of what has transpired since my move in 2011. We have seen Unibet come on board with the acquisition of Betchoice. BetEzy became BetEasy, who subsequently took on the Betfair fixed-odds business, and in March of this year went through another complete rebrand to become CrownBet. The Betfair Exchange is still present as its own entity. Centrebet was purchased by Sportingbet, which was then taken over by the William Hill Group. Another William Hill purchase included the Tom Waterhouse brand, which meant that the UK giant now had a fairly healthy share of the Australian market. Confused? Well this year, Sportingbet has also been rebranded and is now William Hill, with both Centrebet and Tom Waterhouse expected to be consolidated under the one name by early 2016. In 2012, we saw the launch of Bookmaker.com by the Brisbane-based Gaming Investments. They also owned Panda Gaming, a marketing company operating a large portfolio of dedicated sports and racing portals. Enter Ladbrokes. With the purchase of Bookmaker.com, in addition to the Melbourne-based Betstar, Ladbrokes.com.au is now a major part of the betting landscape Down Under. Let’s not forget bet365, Tattsbet, which is soon to become UBet, and a host of other new local operators that have joined the already established Paddy-Power-owned Sportsbet, Tab.com.au and its other online brand, Luxbet. It’s certainly become a crowded market. Australia’s population is a touch over 23 million, and in research carried out by roymorgan.com for the year 2013, circa 750,000 had placed a bet online. Compare this to other markets such as the UK, where it is estimated there were over two million betting online in the same period. With this in mind, you do question how the Australian industry can sustain so many operators.
In December 2014, after just six months of trading, Betfred Chief Executive John Haddock announced: “Following a review of the business it was felt that the market had become overpopulated, we have therefore decided that our marketing spend and ongoing infrastructure costs are best spent elsewhere.” Nevertheless, the Australian online betting market is still growing rapidly, with higher-than-average customer LTV’s appealing to both the bookmaker and their affiliated partners. Now while all of this has been happening on the field of play, behind the scenes, things seem to be moving slower than ever. The regulation of products like casino and poker doesn’t even seem to be a discussion at the moment, while the ability to bet in-play online is still not permitted. Advertising restrictions are complex too, with each state having their own interpretation of what is acceptable. As an example, in Victoria and New South Wales, the two biggest betting markets, you are not able to advertise an inducement to open an account; this is not however the case in Queensland. As you would expect, bookmakers and the established affiliates dominate natural rankings in SERPs across the high conversion keywords. The importance of this is exaggerated significantly by the small marketplace, and the lower audience volumes in long-tail opportunities, an obvious starting point for any new entrant into a market. So what are the barriers, aside from the difficulty in acquiring targeted traffic organically? Restrictions in paid ads are making it difficult for any new entrant into the market from gaining quick wins. To advertise a website on Google, Bing or Facebook as an example, you need to have a betting and gaming licence. This is an avenue some affiliates have taken, but as I understand it, this can be an expensive process, and one that is probably out of reach for those just looking to test the waters. To make a successful attempt at entering the Australian wagering space, the requirements would be no different to those that you would face in any competitive market, primarily the hard work and persistence to ensure it pays off. There are always exceptions to the rules, but I have only seen a very small minority walking into affiliate marketing in recent times to see those big revenue shares rolling in right off the bat. Establishing brand awareness in the first phase, and ensuring investment both in time and monetary terms will give you the best chance of achieving your business goals. Despite the restrictions in some areas of paid advertising, there are still opportunities available to help drive traffic and build brand awareness for any size budget. Advancements and accessibility to programmatic demand side platforms have meant that highly targeted and relevant display inventory is accessible to all. Reinforcing your message through retargeting your own traffic can yield extremely positive results.
For the international affiliate looking to get involved, there can be even more challenges. While the digital age has revolutionised the ability to work without boundaries, one thing that will continue to cause difficulty is time zones. For half of the year, we are on GMT +11hrs. From first-hand experience, the inevitable delays in communication with partners, particularly in such a fast-paced industry, can cause frustration and hinder performance. Serious consideration should be given to investment on the ground. If you are currently seeing traction in this market and attracting Australian traffic already, there is probably a good reason. Don’t make the mistake of thinking you have to start redirecting every Aussie click to a page that is discussing the A-League or NRL - there are plenty of resources on this side of the planet for that. Geo-targeted banner inventory and bookmaker content, be it odds, contextual promotions, or review pages, is a quick way to start making the most from your existing traffic. So where are the big opportunities? Whether you are an established affiliate looking to break into this lucrative market or new to the game, there are still plenty of areas that are there for the taking in a “regulated” Australia. In an article I wrote for iGaming Business back in 2011, there was mention of a gap in the social space. While there are the already noted restrictions when it comes to gambling, the opportunity to develop a community and build a brand through engaging content is still very much there. While there are undoubtedly some affiliates getting this right over here, in my time as an affiliate manager and through what we are seeing in our network, the social sphere is a great starting point. During the 2014 Spring Carnival, a frantic period of high advertising spend, high acquisition volumes and high turnover, Google insights shows that smartphone queries for betting-related terms were at 42%, up 4% year on year. Despite this, advancements in mobile products on both the operator side and affiliates have been slow to develop in comparison to other similar markets. A browse through the app stores suggests that there is plenty of scope for new entrants in the mobile arena both in product and optimisation. So by way of a summary, Australia is a complex and ever-changing landscape that offers fantastic opportunities within a fascinating and ultimately lucrative online betting market. Given few stakeholders would have forseen the changes that have gone on in the last four years, where it will be in four more is anyone’s guess.
“Restrictions in paid ads are making it difficult for any new entrant into the market from gaining quick wins.”
“Advancements and accessibility to programmatic demand side platforms have meant that highly targeted and relevant display inventory is accessible to all.”