Changes to YouTube's policies for online gambling ads make Facebook more important.

For Online Gambling Social Media Ads, Facebook Might Be The Best Bet

Online gambling operators care about social media network visibility, so the recent news that YouTube would enact restrictions on gambling ad placements couldn’t have gone without notice. That’s why Facebook could become even more important to the industry.

Beginning last week, YouTube banned masthead ads related to gambling, alcohol, elections, politics, and prescription drugs. The specific language about gambling ads is:

“Assets that depict or reference gambling-related content, including offline gambling, online gambling, online non-casino games and social casino games.”

That’s a blow to US online casino and sports betting operators, as YouTube has more than two billion signed-in users viewing content each month.

While this is only the masthead — a term for the top of the page — it’s prime real estate. It’s the first thing YouTube visitors see when they arrive, and it’s a brand-awareness powerhouse on what Statista says is the second-most-popular social media site in the world.

Facebook is still No. 1 with more than three billion members. Statista tallies that 2.8 billion are active in their accounts, but that’s still where ads will greet the most people on social media.

Navah Hopkins, director of paid media at marketing software provider Justuno, told Online Poker Report:

“Facebook is quickly becoming the safehaven for gambling ads. While they still require special approvals, they remain one of the few channels that openly accept gambling ads. Facebook video campaigns can be extremely powerful, and they have slightly different rules of engagement than YouTube.”

Why online gambling YouTube masthead ads matter

As Hopkins put it to OPR:

“YouTube mastheads are closer to traditional TV buys. While you could hold them accountable for direct sales, their true ROI will be in brand awareness and high impact blitzing of markets.”

Brand awareness is exactly what it sounds like–making consumers aware of a brand.

Online gambling companies spend hundreds of millions of dollars a year on TV for that purpose alone. Those expenditures often eclipse the rest of their ad spend. That’s because in this nascent online gambling market, operators are simply trying to acquire customers. That’s what they’re seeking as their ROI, or return on investment.

Once the online gambling markets are more established, operators work on decreasing their customer-acquisition costs. That’s when they tend to migrate their marketing spends to more direct sales, as Hopkins terms them.

Direct marketing is one-to-one communication, which creates direct sales. To do this, a lot of online gambling operators use digital marketing methods in established markets. They retain customers and steadily cross-sell to them by, for instance, sending emails to the customers in their daily fantasy sportsbook databases or their loyalty programs.

Brands tend to spend a lot less on direct marketing than they do on mass marketing, like TV-based brand awareness campaigns. That said, even brand awareness campaigns on social media can be less expensive than TV.

What YouTube did is remove one such placement for online gambling operators.

YouTube masthead ad change not earth-shattering for online gambling

Many of the affected advertisers likely saw this coming.

Google, which owns YouTube, already had online gambling ad restrictions in place. It appears as though YouTube ads, which brought in $6 billion in Q1 2021, now align with those guidelines.

Hopkins told OPR that the YouTube ad change created uniformity:

“Google banning gambling ads won’t be anything new for US markets. The bigger implication is that US ad quality and user experience standards are being rolled out to all markets. I don’t see this as YouTube taking a ‘right’ or ‘wrong’ step. This is about consistency. … YouTube’s opening the format to all brands (not just those who can afford a full-day media buy) means they need to apply the same user experience guidelines.”

In other words, online gambling operators can still take out ads on Google and YouTube. Content their customers create organically can also live there. They just can’t buy YouTube masthead ads now.

Are Facebook’s online gambling ads a better option?

As Hopkins noted, Facebook accepts online gambling ads. It’s also the most popular social network in the world.

Hopkins told OPR:

“Brands will need to make sure their ads can be understood and acted on without sound, as well as ensure content is segmented out for Instagram vs. Facebook ad formats.”

Facebook owns Instagram too, so the ads are sometimes sold together. However, Instagram is a more visual format and Facebook users tend to respond better to posts with longer content than is possible, say, on Twitter. That’s why it’s smart for advertisers to segment audiences and create content that’s more likely to be relevant to each one.

Another reason Facebook may be attractive to online gambling advertisers is its ad policies may also be less likely to change immediately. That’s because it’s a year ahead of YouTube in addressing serious issues it had related to its ads.

In 2016, Facebook had problems with its video view metrics that cost it advertising dollars until the social network addressed them. Then in 2018, the saga of Cambridge Analytica began and Facebook had to deal with customer data privacy. YouTube started to address its issues surrounding placing ads next to undesirable content in 2017.

Both entities complied with the EU’s General Data Protection Regulation in 2018. In both cases, major brands were the entities pushing for ad transparency–more accurate ad rates and better content oversight.

Considering they’re using the platforms again, advertisers seem happy with the progress.

To that end, marketing agency IPG Mediabrands said in its latest Media Responsibility Index that “top social platforms’ adherence to media responsibility has improved significantly.” The index evaluated Facebook, Instagram, Pinterest, Reddit, Snapchat, TikTok, Twitch, Twitter and YouTube.

Why operators’ in-house efforts may be another solution

Of course, whenever paid ads become troublesome, marketers can always turn to proprietary and earned content for visibility. If they want to reach beyond in-house writers and journalists, they can attempt to facilitate customer-generated content.

One online gambling operator is already doing just that.

DraftKings Social debuted this month. Daily fantasy sports and DraftKings Sportsbook users can share their DraftKings content on mainstream social networks, like Facebook and YouTube.

What’s even better is DraftKings doesn’t have to pay for an ad.

- Heather Fletcher is the lead writer with OnlinePokerReport. She's a career journalist, with bylines in The New York Times, Adweek and other publications. Reach her at [email protected]
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