UK player survey demonstrates value of retail

UK player survey demonstrates value of retail

Wednesday, September 28, 2016 Posted by Andy McCarron
Morgan Stanley survey of shows high-street brands dominate recognition rates

A new survey conducted on behalf of the leisure team at Morgan Stanley shows that of 43% of people surveyed in the UK placed bets within the last six months, with nearly two-thirds of those betting online.

The survey found the UK high-street operators still dominate in terms of brand recognition among the general population with William Hill (67%), Ladbrokes (65%), Paddy Power (59%) and Betfred (59%) all registering higher numbers than any of the online-only brands.

Of the latter, bet365 was the highest brand recognition percentage at 52%, followed by Betfair (51%), 888 (44%) and, perhaps surprisingly, Sky Bet (38%).

However, it was the National Lottery which retained the highest recognition factor at 71%.

With only 12% of respondents suggesting they were omni-channel customers – i.e. they had placed bets both offline and online within the last six months – the analysts at Morgan Stanley suggested there was “substantial upside” for the retail operators.

The analysis of the important factors behind opening an account found that William Hill and Paddy Power scored highest in terms of customers betting with the same brand of bookmakers as they bet with in retail

Of the brands, Ladbrokes was the most used with 31% of active gamblers using its services either online or offline, followed by Betfair at 29% and Coral at 27%. This bodes well for the Ladbrokes Coral combination which will be formalised later this month. The analysts suggested the results were good news for both that company and Paddy Power Betfair and supports the analysts’ assumption that the pair will be market share winners in the UK in the next few years.

The survey also found that high customer churn was an evident in the online business. Over 30% of all respondents with active accounts said they were likely to close them within the next six months. The highest levels of intention to churn were 888 at 59% and Bet365 at 47% and the M Stanley analysts suggested there was a correlation between this figure and the high engagement rates as customers are quick to burn through their cash at these operators. “This means these operators may be more reliant on marketing spend to drive new customers, and highlights the delicate balance between maximising ARPU and extending customer lifetime,” the analysts wrote.

The survey also found that price promotions and bonuses were a key driver of new sign-ups, but with a wide range of responses for the brands named. While bonuses and promotions were the most important factor in opening up an account with 55% of 888’s customers, the figure dropped to 24% for Betfair and 26% for William Hill. Betfair scored highest with those who believed best odds were the most important factor, at 33% compared with sub-20% results for all the other brands. Bet365 scored best in terms of ease-of-use of the app or website with 33% saying it was the most important factor.

The results for the proportion of satisfied customers likewise showed wide variations with 888 scoring highest at over 45% down to Ladbrokes at just over 30%. In terms of those that answered that they were “not at all satisfied’ with their provider, Betfair and Ladbrokes scored worst at just under 30% each. The best responses for this question came from William Hill and Paddy Power where just over 5% said they were dissatisfied with each.

The survey took place in July and spoke to over 1,000 adults in the UK. The analysts at M Stanley suggested the high incidence of online gambling activity in particular might be due to the methodology.

Totally Gaming says: The survey proves the legacy effect of UK high-street operations in terms of brand recognition. The importance of promotions and bonuses as factors in customers signing up with an online operator also shines through. It will be interesting to see how this factor is altered - if at all - by the new rules from the UK Treasury on the treatment of sign-up bonuses in the new year.

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