Paddy Power trumpets efficiency of marketing spend as it reports record profits
Paddy Power’s attention grabbing marketing, which included its controversial Oscar Pistorius ad and its rainbow laces anti-homophobia campaign in 2014, helped it achieve record profits last year. Despite increasing its TV advertising spend, the success of its non paid-for media kept its marketing outlay more efficient than its rivals.
In its latest financial results, the company, renowned for its mischievous marketing tactics, said it cut its marketing costs down to 21% of its online net revenue in 2014, lower than the average 27% for its major competitors according to Paddy Power.
This is despite a “substantial” increase in investment in TV advertising last year, an area it will maintain a heavy focus on moving forward along with digital, social and mobile marketing.
Paddy Power reported record profit growth of 21% to €167m for the year to 31 December, while revenues were up 18% to €882m.
It also saw its UK operating profit up 50% to €21.2m, a market which offers a substantial growth opportunity, according to the brand.
The company largely credited its online performance for its strong growth, announcing plans to prioritise online over retail and mobile over desktop moving forward after 77% of its operating profit was generated online last year, with 55% of online revenues coming from mobile following the launch of its personalised betting app in 2013.
Andy McCue, Paddy Power CEO, said: “The global phenomenon of retail to online migration is driving growth in online betting and gaming, which is outpacing expansion in retail.
“In the UK sports and gaming markets in which we operate, over 90% of future industry growth will be in mobile,” he said.
Alongside its online and mobile efforts, the brand has credited its often-controversial marketing strategies, which revolve around social engagement, as both effective and cost-efficient.
Its rainbow laces campaign with gay rights charity Stonewall, which began in 2013 to urge professional footballers to tackle homophobia by wearing rainbow-coloured bootlaces, doubled its impressions in 2014 compared to 2013, while its World Cup marketing activity, which involved PR stunts and ads featuring Stephen Hawking and Luis Suarez, saw it welcome 140,000 new online customers over the four week period, with total new customer acquisition up by 28% for the year.
Meanwhile, the company’s “It’s Oscar Time” ad became the most complained about ad of all time after offering consumers a refund if Oscar Pistorius was acquitted of murdering girlfriend Reeva Steenkamp.
This year, Paddy Power promises new marketing campaigns for both the Paddy Power master brand and its Sportsbet brand.
It will also focus on product innovation, which will see developments in personalisation as well as platform, bet, market and game types, and will push its “distinctive brand position” in order to stand out in a “crowded marketplace”, according to the brand.
“Our distinctive brands and deeply rooted marketing capability are core assets,” McCue said.
