William Hill to increase marketing spend again in 2018

William Hill has attributed ‘smarter marketing’ and product improvements for the turnaround in performance of its online division, where a 3% net revenue decline in 2016 to 13% growth in 2017.

The firm reported double-digit growth in both sportsbook and gaming net revenue, which compares to recent Gambling Commission data showing the UK online market growing at c10%.

The firm also promised to up its marketing spend this year, even after a 14% jump during 2017. It explained: “In addition to enhancing the efficiency of our digital marketing and implementing programmatic marketing since August, we increased our online marketing spend by 14% to £138.7 million, and will increase that again in 2018, a World Cup year.

“Cost of customer acquisition increased 10% as the increase in new customers lags the increase in marketing spend. We continue to enhance our data systems, combining 12 legacy systems on 34 different servers into one single customer-centric view of online data.

Group net revenue grew 7% to £1711.1 million, with ‘adjusted’ operating profit up 11% to £291.3 million. However William Hill’s decision to take a £238 million impairment charge on the value of its Australian business actually saw the operator report a pre-tax loss of £75 million for 2017.

The firm said that reinvestment has been focused on enhancing our competitiveness around digital marketing, product development and technology capabilities, supporting faster revenue growth through a range of initiatives focused on acquisition, conversion and player lifetime value. These include innovative product launches such as Bet Boost, hiring 100 new product developers to create improved product and UX offerings, and reallocating resources to invest in a scalable, efficient and increasingly targeted digital marketing platform

Next month sees some shake up at the corporate level, with Ulrik Bengtsson, former President and CEO of Betsson Group, joining in the new Group role of Chief Digital Officer, reporting to Philip Bowcock and sitting on the Group Executive Committee. Bengtsson has extensive experience of the online gaming market and will have oversight of Online as well as global data, brand, marketing and customer service.

After ‘two very successful years’ turning round online, Crispin Nieboer will support the Group in its next phase of international growth in the new role of Group Corporate Development Director, also reporting to Philip Bowcock and sitting on the Group Executive Committee.

Nieboer will have oversight of strategic growth opportunities for the Group globally, with the US opportunity being his immediate priority. Grant Williams, currently Chief Operating Officer of Online, will become MD of Online, assuming day-to-day responsibility for the Online business.

Gaming net revenue was up 12% to £308.6 million, with core markets up 13% and non-core markets up 10%. William Hill said that there were benefits from the launch of the single wallet in Q1, enabling a seamless movement of funds between William Hill and Playtech products, significant work on cross-sell product features and the introduction of daily ‘must drop’ jackpots with content from a new third-party provider.

Growth in active users was 6% for the year. New accounts grew by 3% and revenue per active user grew by 6% over the year with the focus of marketing activities being on both acquisition and retention of customers.

It added: “Our mobile user experience improvements resulted in revenues from mobile devices increasing to 82% of sportsbook net revenue (2016: 70%) and 63% of gaming net revenue (2016: 53%).”

Italy and Spain continue to perform well with sportsbook net revenue up 4% and gaming net revenue up 9% in local currency terms, helped by new desktop and mobile casino sites in both countries and an increase in the number of regulated games to over 200 new titles.

However cost of sales increased faster than net revenue because of the higher proportion of growth coming from the UK, the introduction of the horse racing levy for Online from April and the application of Remote Gaming Duty to gaming free bets from October.

Following its £6.5 million Gambling Commission fine earlier in the week, William Hill is now making a major play for developing a ‘sustainable’ business.  It explained: “We are focused on improving our approach to responsible gambling to build a long-term, sustainable business for all our stakeholders, and especially for any of our customers who are at risk from problem gambling.

“We recognise that it is not enough to grow: we have to grow the right way. That means acting in a sustainable way that takes account of all our stakeholders. We remain a company with commercial objectives but commercial gain should not come at the expense of being a responsible company. We are committed to treating customers fairly and openly, to protecting the vulnerable and to keeping crime out of gambling.”

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