TrafficGuard has revealed up to 44% of traffic in paid acquisition campaigns for sports betting operators is invalid or fraudulent.
A report, The Global Landscape of Sports Betting Operators: Key Market Trends, shows how bots, fake clicks and returning users are draining advertising budgets and hindering efforts to attract new bettors.
Tier 1 operators, the industry leaders, face an average 44% invalid traffic (IVT) rate, with 40% of their advertising spend lost to fraud.
Tier 2 operators, regional players with smaller operations, see a 29% IVT rate, losing 17% of their ad budgets. While Tier 3 operators, mid-sized market players, experience a 42% IVT rate, with 37% of their ad spend wasted. And Tier 4 operators, the smaller competitors, have a 33% IVT rate, losing 19% of their ad budgets to similar issues.
The research also shows that 76.8% of total website traffic for sports betting operators comes from returning users. This high proportion suggests that navigational traffic is diverting resources meant for new user acquisition and potentially slowing market growth.
Returning customers are increasing media spend without boosting new customer acquisition by using paid ads to access their accounts. This issue is worsened by bots inflating click volumes and draining ad budgets.
Filtering out this traffic is essential to ensure paid campaigns target new bettors, not just repeat users.
“The sports betting industry thrives on new user acquisition, but the success of their campaigns relies on justifiable costs,” said Mathew Ratty, CEO of TrafficGuard.
“We’ve mapped out the market to inform operators on the opportunity in the industry and the threats preventing further growth. Bots and hyper engaged returning users are eating up ad spend meant for incremental real bettors. The market is ripe for significant expansion, but only if invalid traffic is tackled.”
The report also revealed that 84% of operators have launched mobile apps, but over 20% of smaller operators have not yet adopted the same strategy.
This gap in mobile adoption is a missed opportunity, as 75% of bettors place wagers via mobile devices. Operators lacking a seamless mobile experience will struggle to compete. Smaller operators also face challenges with invalid traffic detection in fantasy sports ads.
“The global sports betting market will be worth hundreds of billions of dollars in the next decade and operators need to be ready to take their portion of that pie,” said Ratty.
“Understanding the market landscape is essential while identifying opportunities to efficiently attract new users. Today, we’re seeing bots and returning users reducing the effectiveness of campaigns while inflating traffic volumes.
“All of these things hurt an operator’s chances of winning big over the next five to 10 years.”
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