The Nielsen Corporation online sports betting advertising market had become, with nearly $200 million in ad spend in Q1 this year alone, and over $153 million of that spent in the local television ad space. To give some idea of the growth of this segment of the market, in Q1 2019, the local television ad revenue from online gambling advertising was … $10 million. 502135
Local radio stations have also captured a slice, albeit a smaller one, of this pie, with nearly $4 million in online gambling ad revenue in Q1 2021.
And while that may sound like a pittance next to what local TV is pulling in, make no mistake: It is having a profound effect on terrestrial radio stations across the country, especially on sports talk radio.
“Radio is going through a tough time right now, financially,” said Michael Harrison, the editor and publisher of Talkers Magazine, which has been covering talk radio since 1990. “Most of the big conglomerates, they’re all in debt. They’re smothered in debt. Revenues are down in of advertising. This is a godsend for sports talk radio from a standpoint of revenue. These aren’t fat cats getting fatter. This is saving radio.”
Note the last bit there. “Saving radio.” Not just saving sports talk radio. Fact is, sportsbook advertising is keeping all ships afloat.
A brand-new category s5j2r
“The sports betting category, when it comes to national sales for the company, this year it will easily finish in the top five for us out of nowhere,” said Darrin Klayman, the vice president of national client partnerships for Townsquare Media, the nation’s third largest radio network. “When you look at categories like insurance, automotive, fast food … yes, sports betting will easily be ranked within those categories at the end of the year.”
For Townsquare, sports talk is obviously a big winner. But it doesn’t stop there.
“My assumption from the beginning was to make sure they (the sportsbooks) get the right sports stations, and yes that’s the first thing they want to talk about for the obvious reasons, but by no means do they stop there,” Klayman said. “They will take any format that drives the audience that they’re looking for. They’ll buy sports, rock, country, talk.”
Harrison echoes the point.
“If it helps sports talk, it’s also helping country, rock, all of it,” he said. “With the conglomerates, they’re all under the same roof. Even if it maybe started specific to sports talk, it’s certainly not ending there. It’s helping across the board.”
For Townsquare, the “help” is borderline astounding.
From Q1 2020 to Q1 2021, sportsbook advertising revenue jumped over 4,000%. It went from being barely a blip to being a major generator of cash. And the terrain has not plateaued. It’s continued to go up quarter after quarter.
Even more shocking: The vast majority of the ad spend headed to Townsquare has just been in two states where Townsquare has a relatively large footprint (and where sports betting is legal): Michigan.
WFAN presents JJ's Best Bets as @john_jastremski shares his picks for the #FinalFour. Sponsored by @PointsBetUSA, New Jersey's sportsbook and JJ's preferred way to bet. #PBStaySharp pic.twitter.com/hgibd24Ct0
— WFAN Sports Radio (@WFAN660) April 5, 2019
Klayman said in New Jersey, sports betting is, and has been, a top five category for the last year.
Michigan? It’s second, and might be headed higher.
“Sports betting is only going to go up in Michigan,” Klayman said. “It’s brand new this year, spending jumped in January after it went live. But the major companies had been advertising before it was even fully legal, trying to get their names out there. We haven’t even experienced football season with them yet.”
And as more states legalize sports betting — the ever-increasing number of states where it it’s legal in some capacity, in person or online, now stands at 27 — there will just be more and more ad dollars spent with radio stations. Past is prologue here.
“It’s the wild west in this category right now,” Klayman said.
Pets.com (‘memba them?) 1n606r
“Sportsbook advertising is a growing category across all radio formats,” Bruce Gilbert, the senior vice president, sports, for Cumulus/Westwood One said in an emailed statement to Sports Handle. “In states where sports betting is legal, some sports stations were seeing 30% of their total advertising coming from this category, particularly last fall when all sports started back up at once. Outside of football season sports book advertising is taking up about 10-12% of inventory in states where sports wagering is legalized.”
And you have to — this is a market that came out of nowhere for the nation’s radio stations. In fact, it’s been decades since something like this happened. The dot-com boom of the late 20th century was the last time radio advertising saw a major new market gobble up advertising space.
“The biggest market that never existed over the last quarter century was the emergence of websites and digital venues,” Harrison said. “Really, it’s amazing how radio has played such a major role in driving traffic to the web.”
And now it’s happening again, with sportsbook advertising replacing Pets.com and driving revenue to radio stations.
And again: It’s not just sports talk.
“Even non-sports stations are seeing some dollars from this category in legalized territories, some up to 5% of total inventory,” Gilbert said. “There are several reasons for this, but the most common reason is that local radio has some very powerful influencers. Radio talent are highly trusted by their constituents and sportsbook rs are smart about tapping into that talent and g on strong local talent to promote their brand and all its special features.”
Younger people tuning in 15i2j
Just heard ad on chicago sports radio for the new barstool sportsbook in East Chicago. Any news on when Illinois can bet on barstool sports app @BarstoolBigCat ? pic.twitter.com/TisSrxPr7D
— Matt Hillman (@WorldWideMatt) December 28, 2020
And while radio station executives are happily taking in the advertising dollars, there is also something else at play: All of a sudden, the demographics of radio listeners are getting younger thanks to legalized sports betting.
“It’s serving to lower the demos,” Harrison said. “Even though gambling and casinos, in of Las Vegas, Atlantic City, that sort of thing, has largely been ed by the upper demos, when it comes to sports talk radio, it’s ed by the lower demos. So the infusion of betting and gambling into the equation of conversation about sports on sports talk radio is attracting younger demos, and that’s the holy grail of talk radio of every format. It’s changed the culture and the nature of sports talk, as the conversation is now increasingly leading toward the betting action. It’s not from the standpoint of appealing to the old-fashioned pride in your team, but more the excitement of gambling, appealing to the pride in your pocketbook. And that’s the big game-changer.”
Harrison isn’t wrong, as any semi-serious sports bettor (or DFS player) can attest to: Wagering tends to teach fans to put their money according to the head’s calculation, not the heart’s.
“It’s more than just a revenue stream, it’s a game changer in pop culture, especially as it applies to sports talk radio,” Harrison said. “It’s not only bringing the aforementioned percentages of increased revenue, it’s also changing the nature of the programming, changing the nature of the relationship between fans and their teams.”
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Right now, sports betting advertising is quickly on its way to becoming the golden goose for local radio, specifically sports talk, but clearly spreading out beyond.
For Klayman at Townsquare, he sees this rising market as a steady one for years to come.
“It’s a category unlike anything we’ve seen in a while and the growth potential, if we’re smart as a medium and treat it well for both our listeners and advertising partners … well, to me, it’s only growth for the foreseeable future,” he said. “Sports are huge to begin with, and more people are getting into the sports betting environment. The demographics all over the place, with 18-year-olds as engaged as older people. I don’t think it slows down, I think it continues to grow.”
And with Florida seeming on its way … and California showing signs of life … and the competition to acquire customers at a constant fever pitch… add it all together, and the arrow is pointing straight up for radio stations being able to pull fresh money into their bottom line from sportsbook advertising.
“Just from a standpoint of creating excitement, creating new revenue streams, and lowering the demos, the impact of sportsbook advertising for radio is major,” said Harrison. “Absolutely major.”
Editor’s note: The author of this piece works part-time as a talk show host for a Townsquare station. He’s semi-entertaining.
