Legalized sports gambling is flooding the market with betting apps, which are becoming powerhouse spenders as they seek to gain a foothold where gambling is now allowed.
In New York, where sport betting apps became legal in January, apps like Fanduel, Draftkings, Ceasar’s Sportsbook and BetMGM Sportsbook took over billboards, the TV ad market and social media feeds. They each offered hundreds or thousands of dollars’ worth of free promotional incentives to download their app and make a few initial bets.
Like the heated CTV streaming service market, where Netflix, Disney, Amazon, etc., are in a pitched battle for market share heedless of the cost, sports betting apps put crazy-high premiums on new users that they hope to make up in lifetime customer (gambler) value. But not every gambling app is in a grow-now mode regardless of marketing costs.
“The category over the past 24 to 36 months has at times behaved irrationally,” said Ryan Maloney, VP of digital and creative at Hard Rock Digital, which launched its Sportsbook app late last year. “We think we can acquire qualified users profitably and build a brand at the same.”
Hard Rock Digital recently added performance marketing agency Within to help it set tolerable acquisition rates and target potential users, he said.
The most expensive medium, TV ads, is out, except for New Jersey (where Hard Rock has had an online casino business for years because that state was the lone sports gambling holdout).
Hard Rock’s betting app is live in Virginia, Arizona and New Jersey, with more states coming online this year, he said. But with so few states with legalized gambling, Hard Rock Digital isn’t placing national buys, as other sports gambling apps have done to raise their overall brand profile.
At some point in the future when Hard Rock Sportsbook has wider scale and the category is broadly accepted, the company will make national campaigns. For now, though, Maloney said that “we don’t think that is currently an efficient investment for our business.”
One major differentiator for Hard Rock’s approach is that other gambling apps focus heavily on adding raw sign-ups, according to Maloney. Anyone who installs the app, sets up an account and connects to a credit card or bank might qualify for huge promo incentives or get free credits to begin their betting.
“That is as deep as they go from a KPI standpoint,” he said. “We’ve worked really hard with our analytics team and Within to take that a step further.”
Hard Rock keeps a 14-day analytics period between when a new user signs up and when the company assigns a lifetime value estimate to that user.
Tracking installs and account sign-ups are important too, he said. Performance channels like Facebook, Apple and Google are paid on downloads, regardless of Hard Rock’s 14-day analytics window. But adding the two-week analytics period means the company isn’t just optimizing campaigns toward apps or publishers that drive installs, but to media that drives new users who of their own volition will make bets and use the app consistently.
Hard Rock has found value with in-app promotions that keep people engaged after they a download. One offer for the NBA Finals is a $1 credit for every three-pointer made by either the Boston Celtics or Golden State Warriors, whichever team that person bets on to win. But compare that to Draftkings, which offered more than $1,000 in risk-free betting credits to people in New York who downloaded the app to make a single bet.
Hard Rock Sportsbook also rethought its attribution, in light of the mobile signal loss and its requirement to acquire new users at profitable rates, Maloney said. For one, it uses primarily modeled data, rather than deterministic closed-loop attribution (the typical performance marketing approach).
On Android, for instance, there is more data visibility into the specific apps or sites that drive valuable new users, whereas on Apple those attribution connections mostly don’t work. So Hard Rock builds models based on what works on Android, which it then applies to Apple iOS users.
Hard Rock Digital is also building out its media mix modeling attribution, Maloney said. The MMM project is starting in New Jersey, where the gambling site and app have been around for years and the brand has offline marketing like linear TV and radio. Mix modeling doesn’t attribute specific conversions, but assigns credit channel by channel, which is why it’s been a longtime standard for marketers that spend across traditional media.
Maloney said that MMM will have a clearer application even in digital-first or digital-only marketing in the future. Google, Apple and Meta are more like standalone channels that self-report their own metrics and can’t be evaluated holistically across apps and the web. In that sense, they’re becoming more like TV, radio or OOH that can only be evaluated against each other at an aggregate level, not by tracking individuals across apps and the web.
“It’s a hard time to be a performance marketer,” he said. “It feels like the chessboard gets flipped over every now and again.”
