News emerged in late January that CVC Capital Partners, the majority owners of Sky Bet, had hired bankers in preparation of an initial public offering that reportedly aims to raise up to £3bn.
With that in mind, it is a good time to analyse how the brand has been performing over the past twelve months, and how consumer perception has shifted in that time.
Sky Bet’s business is doing well. In the year to June 2017, it reported that its revenues had increased by 38% to £516m. But what has driven this?
Rise in awareness and consideration
YouGov BrandIndex data underlines how perception among key target groups has boosted Sky Bet.
Whilst other brands associated with Sky are well known among the public, its gambling arm is less so. However, YouGov has noted that Sky Bet has been making progress with regards to its Awareness score (whether someone has seen or heard an advert by the brand in the past two weeks). Looking at the population as whole, its score has improved from +45 to +50 over the last year. Among men aged 18-34, the situation is rosier still, with its Awareness score rising from +61 to +66 in the last 12 months.
Among those that gamble online at least once every six months, Sky Bet’s Purchase Consideration score (whether someone would place a bet with a particular brand) has improved gradually over the past year, moving from +21 to +27 in that time.
This group has consistently reported recalling adverts for Sky Bet in the last 12 months. It’s Ad Awareness score remained strong, hovering around the +25 mark. It currently stands at a high of +28. Crucially, although Sky Bet loses out on this metric to Paddy Power, it does outscore traditional betting giants Ladbrokes and William Hill.
Where has it won customers?
YouGov data also enables us to assess where Sky Bet has been gaining customers from. Again we see that the larger, traditional high-street bookmakers are under pressure from the ‘digital natives’ of the gambling world.
Our figures show that many of Sky Bet’s customers have previously placed a bet with a ‘traditional’ bookmaker (whether that is online or offline). In fact, 30% of Sky Bet’s current customers are former Ladbrokes customers. Similarly, 25% of those who used to gamble with William Hill have gone on to wager with Sky Bet.
This is not the case if we look at it the other way round. When we look who Ladbrokes has gained customers from, our data shows that just 8% of Sky Bet’s 2017 customers moved to Ladbrokes. Most of its customer gains came from other large rivals with a high-street presence (such as William Hill, 22%).
What next for Sky Bet?
The challenge for Sky Bet is to continue growing, and attracting not just those new to the betting industry, but existing customers of other brands. For Sky Bet, a tweak of its current strategy may help in this regard.
Indeed, YouGov Profiles data indicates that those that are customers of Ladbrokes and William Hill, but not Sky Bet, are less likely to watch sports regularly (26% vs. 46%), and are more likely to mute the adverts on television (47% vs. 27%). What’s more, they are less likely to be enticed by the premise of offers alone, with a smaller percentage saying that they do have favourite brands, but switch if another has an offer (72% vs. 84%). Creative advertising therefore, potentially incorporating out-of-home campaigns, may be one way to put across Sky Bet’s message.
Overall, the signs are good for the brand. Though it will of course be wary of the criticisms that have impacted on most if not all bookmakers in recent times. Traditional bookmakers face a tough task to counter-act the continued rise of digital only competitors in the coming months.