Wednesday, 16 May 2007

Gambling & PPC - The Lowdown

With the revelation that Yahoo! will be following Google's lead and banning advertisers from promoting online gambling sites via PPC, it seems a good time to take a look at the current situation with regards to this subject, and what the implications are for advertisers.........

Back in the day, when PPC listings were full of sex, drugs and rock and roll, it was ok to advertising gambling sites and have outwardly promotional gambling messages in creatives. After all, these were more often than not shown when someone was looking for an online gambling site, so advertisers were simply doing what comes naturally - meeting consumer needs. However, in 2004, Google announced it would no longer allow advertisers to promote gambling sites or services through PPC ads. This obviously hurt the online gaming industry, leaving many sites struggling to bring in new visitors, since their most potent channel was now rendered impotent.

Yahoo! have now, unsurprisingly, followed The Big G's lead, and launched their own ban on gambling ads. MSN are now the only major search engine in the UK still permitting gambling-related PPC ads. This move by Yahoo (and previously Google) has been met with a mixture of approval and anger, the latter very much the feeling in the online gaming community. A number of commentators have highlighted the fact that pornography suppliers, such as Max Hardcore, can freely utilise the PPC medium (try searching for "max hardcore" on Google).

The feeling of injustice has been intensified by the launch of the Gambling Act 2005 in the UK, which permits advertisers to promote their businesses on television. This means gambling sites can advertise freely on television, the largest reach medium around, to an untargeted and multi-faceted viewing group, but cannot place targeted ads online to help customers find them. This seems a quite farcical situation.

However, whilst advertisers are not permitted to promote gambling in their adverts, they can still bid on gambling related terms and have ads that do not directly promote gambling with actual cash. Carry out a search for "online gambling" on Google and you'll get a raft of ads. However, you'll notice that almost all the ads present include the words "free", and those that don't do not mention money. What's more, click through an ad and you will be taken to a site where no actual gambling takes place. It's all free games and "fun" activities.

However, despite the seemingly innocent ads and sites here, there is a serious marketing effort at work. After all, where's the profit in free games? No - what these sites do is bring gamers to their sites through gambling related phrases, using non-gambling related ads, to play fictional gambling games; but before they can play the game, they must enter an email address. This is where the marketing will come into force. The site, as soon as the email address is gathered, will begin an aggressive and, often, highly targeted email marketing campaign to bring the gamer back to their parent site to play for real money. This is how they get their new customers via PPC. It's not quite as direct as most PPC adverisers, but they get there in the end. The conversion rates for this kind of email follow up is high, too, so it's not all bad for these sites.

Nevertheless, it's my opinion that, particularly in the light of the current relaxed regulations surrounding gambling advertising on tv, the ban should be lifted from PPC. Especially since the ban is not a complete one anyway - if Google were really serious about stopping sites getting new gamblers via paid ads, they'd stop advertisers bidding on the phrases. It's a no-brainer - if you don't allow people to bid on gambling-related keywords, then they can't carry out directly gambling-related PPC activity. Instead, Google and Yahoo have brought in half-measures that, although very damaging to sites' PPC efforts, do not go the whole way to banning gambling advertising through PPC.

I'm all for promoting responsible gambling behaviour - gambling addictions are a serious matter, and should be treated as such. However, I think it's far more dangerous for a vulnerable person to be exposed to adverts via a high-reach, low-targeted medium such as television, than have the risk of finding a PPC ad for gambling after typing in "online betting" in a search engine. After all, if that's what they're looking for, they can just click on an organic link anyway..........


skyhigh said...

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Google's system so that he gets all his pay-
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qubotz said...

Very interesting, I'm in online advertising too and you can see a blog about this business in gambling at Online gambling advertising

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