Paddy Power's digital marketing gamble scores in World Cup campaign

Profile picture for user slauchlan By Stuart Lauchlan August 28, 2014
Summary:
Bookmaker Paddy Power's digital marketing skills came to the fore during the recent World Cup, with customer acquisition rates up by nearly 150,000 over the 4 weeks of the tournament.

[sws_grey_box box_size="690"]SUMMARY - Bookmaker Paddy Power's digital marketing skills cameto the fore during the recent World Cup, with customer acquisition rates up by nearly 150,000 over the 4 weeks of the tournament. [/sws_grey_box]

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England's Steven Gerrard finds something to cheer about

Bookmaker Paddy Power has seen profits double in the last five years, largely on the back of industry-leading investment in digital and online gambling. Some 148,000 new mobile and tablet gamblers joined the PaddyPower.com site during the  four weeks of the World Cup alone.

But its digital prowess does nothing to shield the firm from the eternal dread of the bookmaker: a run of bad sports results which favor the punters and which has resulted in a 20% drop in profits over the past 6 months.

Patrick Kennedy, chief executive of Paddy Power, is taking it on the chin though:

The punter friendly results in football and racing which impacted the gross win percentage in the initial six months of 2014 failed to put a halt to our gallop with strong underlying performance and accelerating top line momentum delivered in the period.

One reason for his phlegmatic response lies in the success in the first half of the year in bumping up customer numbers through savvy use of social media and digital marketing, as he argues:

Despite of law of big numbers and despite our significant existing customer base, we manage to acquire almost 800,000 new online customers in six months with no increase in marketing counts per customer.

New customer acquisition grew by 37% in the first half of this year. We’ve also seen improved retention rates across the sports that’s going to help us maximize the value of this acceleration of new customer growth.

We saw a 5% improvement in the rate of which new customers are active post one month and that’s delivering good growth in active customers as well. And the overall momentum in customers, be it a new customers and active customers overall is paying back in the top-line Sportsbook stakes.

That’s all good news at a time when the online gambling business is becoming increasingly competitive. Earlier this month we looked at the struggle that rival Ladbrokes has had in creating a multi-channel gaming model. To date, Paddy Power has escaped such travails with early and canny investment in mobile and social technologies.

Goal!

It’s the company’s experience of the World Cup soccer tournament to which Kennedy most enthusiastically points to demonstrate the company’s ability to exploit its digital investment and stimulate customer acquisition:

We had a cracking World Cup which generated stakes of almost 200 million Euros, 130% ahead of the previous tournament.

It’s a one in four year opportunity to showcase that Paddy Power really is different.

It was an opportunity that Paddy Power made the most of. Kennedy explains:

The ultimate measure of performance is on new customer sing up, customer stake and profitability on those metrics surpassed our targets 148,000 new customers almost 200 million of stakes which was up 130% on the amount we took in 2010 World Cup and similar growth and profitability.

So how does a company acquire itself the best part of 150,000 new customers in a four week period? Kennedy explains:

We use customer analytics to make sure we went to market with the right offers, the right sign up and hence prices. We thought we’ve been generous offering 100 to 1 on England, money back on all nil matches in the group stages and headline bumper money back specials on all England matches. All of those clicked giving modest respite to the England supporter.

Our media strategy was also based on analytic and insights from previous campaigns and that allowed us to go to market with the correct media choice and timing and content for different markets and twisting different markets. For example, ensuring strong TV Share of Voice in the UK with a presence on all ITV matches, but more of press focus.

Social media stunts also played their part, including drafting in Stephen Hawking by Paddy Power’s self-styled ‘mischief champions’ to spearhead a study into the science of England’s World Cup performances and the most scientific way to take a penalty shot.

Kennedy argues that canny use of social media amplified the underlying messaging and reached new audiences:

Before the tournament, three stunts caught the imagination. The scientific study of our latest pundit, Professor Stephen Hawking, on what might happen at the World Cup was covered in every UK and Irish national news paper. A three-minute segment on Newsnight [the BBC’s flagship nightly current affairs program] was the highlight of over 150 broadcast pieces on the story.

We then caused outrage on Twitter when appearing to have carved a huge message of support for England to the Amazonian Rainforest. By the time we set the record straight 36 hours later revealing it’d been a hoax, both Paddy Power and Save the Rainforest were trending on Twitter. In total, we had over 35 million impressions.

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The guys from Sportsbet [Paddy Power’s Australian brand] were not to outdone they flew a 14-storey high Christ the Redeemer balloon over Melbourne, Sydney, and Adelaide and it made the TV news in all national channels in Australia.

With the scene set, the social media and digital outreach push continued on a more reactive basis as the tournament progressed, even if some didn’t quite work out as well as planned. Kennedy recalls that Luis Suarez biting another player sparked a stunt that was nixed by the football authorities:

If FIFA hadn't banned Luis Suarez we would have got our logo on the pitch as we were striking a deal for him to wear our branded gum shield versus Columbia.

But that incident wasn't left to go to waste entirely...

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More successful was the signing of former Manchester United and England midfielder Paul Scholes as a blogger:

The exclusive signing of Paul Scholes was quite a coup, and that consistently made front and back pages in major newspapers. It got mentioned numerous several at least in England press conferences and achieved over a quarter of million views of our Paddy Power blog, which is a new record by distance. Again, we challenge for payback and the payback on Page 27 was fantastic.

Overall, the end results are undeniably impressive, as Kennedy notes:

On social media, Brazil 2014 turned out to be the most social event in history. Our presence meant that we dominated our industry both on Facebook and Twitter. Paddy Power received three times the amount of engagements and interactions than the next six competitors combined.

But looking outside our industry at all brands globally, Paddy Powers also dominated. We ranked in the seven highest brands globally for social mentions, just behind McDonalds in six, but ahead of many of the official World Cup partners and sponsors including Budweiser, including Emirates, including Visa.

My take

As every gambler knows, some you, some you lose.

Paddy Power’s had a losing streak this year on operating profit, but a big win on customer management.

The firm’s early investment in digital tech and its recognition of - and preparation for  - a multi-channel world has served it well.

Its undoubted success at exploiting the World Cup stands as testament of how to do social media and online marketing.

The odds are that the second half of the year will see that digital dividend paying off again.