Paddy Power Betfair is pitting two marketing firms against each other as the company continues its cost-cutting program, several media outlets have reported.
The newly-formed betting giant is reportedly rethinking the £40 million annual media spend for the United Kingdom and Ireland into a single agency, according to the Independent.
M2M has handled Paddy Power’s marketing since 2009, while MediaCom has been handling Betfair’s European business since last year. According to Campaign Live, the two marketing agencies were already in the advanced stage of the pitch process, following the completion of the Paddy Power-Betfair merger in February.
Paddy Power Betfair, whose headquarters is in Dublin, previously said it plans to save £50 million annually “from synergies in a number of areas, including marketing.”
Jonathan Devitt, who was named Paddy Power Betfair’s chief marketing officer, appointed MediaCom during his tenure at Betfair. Devitt’s counterpart at Paddy Power—Gavin Thompson—left the company following the merger.
Paddy Power Betfair, which has plans to expand in the United States and Australia, has a total of 7,200 after the merger. However, the company laid off 300 people at its Irish operations and 350 more in the UK as part of its cost cutting measures.
Moody’s: Online gambling sector offers growth opportunities
European gaming operators would do well in the online gambling sector in the next 12 months, despite pressure from increasing taxes and regulation, according to Moody’s Investor Service.
The credit rating business forecasts online gaming markets, including online poker, casino, sports betting, bingo and lottery, to reach €42.8 billion by the end of 2018.
“Gaming companies with a larger online presence are likely to see higher revenue and EBITDA growth over the next 12-18 months than those more focused on traditional land-based business, as the gradual shift online continues, mobile phone and tablet penetration rises, and fast-growing demand for online games increases,” said Donatella Maso, a Moody’s Vice President — Senior Analyst.
Among the online operators, UK-based William Hill Plc has the biggest online exposure by revenue, while pure online operator Cyan Blue HoldCo 2 Limited has the most significant presence by percentage of total revenue. Ladbrokes, on the other hand, remains to be one of the largest gaming companies in the UK, but Moody’s said its digital division still lags its peers and it reported negative EBIT in 2015.