How Kayo Sports grew its audience by going local

For sports streaming service Kayo Sports, engaging a nation of sports enthusiasts and growing subscriber numbers relies on understanding fan behaviour. As competition for viewers has intensified, Kayo has focused on better understanding their customers, demographics, consumption and shifting economic trends that impact that behaviour.

Activating marketing and other initiatives built on this new understanding has seen the company reach its highest number of paying subscribers. According to the company’s reported Q3 FY24 results, subscriber numbers for the platform have increased by 10% year-on-year, hitting 1.5m subscribers – a record high.

Executive Director of Kayo Sports, Cate Hefele, says that amid a fragmented sports broadcasting market and diverse fan viewing habits, Kayo has refined its approach to bringing new subscribers to the streaming platform.

“Kayo has captured sports fanatics, those who are interested in watching every game and for whom the Kayo proposition was an easy sell. But we were reaching a plateau of market potential, where familiarity with the brand, and ultimately consideration to purchase, needed to extend to that broader audience,” says Hefele.

“The more casual fan is mostly interested in their team and when they’re playing, rather than the full round of matches. So, the opportunity for us was how to send localised messages to millions of people across codes, teams, and geographies – in a cost-effective way.”

Hefele says the Kayo team needed to design an advertising campaign that surfaced the teams and matches most relevant to fans in different postcodes and hone in on locations with the highest likelihood of becoming paid subscribers.

Gaining hyper-local insights

To identify these growth locations, Kayo engaged CommBank iQ to deliver deep, data-driven intelligence into consumer and market behaviour. CommBank iQ combines the de-identified dataset of Australia’s largest bank, spanning approximately seven million Australians, with data science and analytics expertise of Quantium.

Kayo brought its own valuable de-identified customer insights to the table - accumulated over five years - including detailed trends in subscription peaks through the week, viewership and engagement across its more than 50 sports, and fan cohort analysis through sign-up and retention.

Head of Customer at CommBank iQ, Simon Johnson, says that knowing de-identified customer usage at a granular level provided a strong foundation for market sizing at a postcode level or below.

“This analysis helped Kayo pinpoint which areas are over- or under-indexing from a penetration standpoint. In that way, it shows where adoption of the service could be increased but not which areas would be most receptive. Having both would enable prioritisation by value,” says Johnson.

Triangulating customer growth potential

Hefele says that to go deeper into audience purchasing behaviours across locations, the Kayo team worked with CommBank iQ to set and analyse the most influential spending and behavioural metrics.

The goal was to look more closely at the impact of demographic factors, cost of living pressures, and even the number of streaming services people have and whether they’re likely to switch.

Johnson says CommBank iQ uses spending data to understand the interplay between purchasing behaviour and conversion, retention and risk of churn. For example, opportunities were stronger in areas with low Kayo penetration, where people spend more on streaming services and aren’t as sensitive to higher living costs.

“With a read on penetration coupled with a clearer view of demographic drivers and the dynamics of spending on streaming services, we could rule out lower growth zones and focus on the high-impact areas,” says Hefele.

“But it was important to go beyond the data and put it into action; we matched the highest value locations with the AFL and NRL teams each suburb supported using Kayo viewing data and then featured those specific teams in our out-of-home and geo-targeted advertising programs delivered to those areas.”

Using these data-driven insights, Kayo grew NRL subscriptions by 38 per cent and AFL subscriptions by 24 per cent.

CommBank iQ has now helped Kayo embed these insights so they can be easily analysed alongside internally collected data. Hefele says this has strengthened the engine Kayo has to identify fans most likely to sign up, and it will be used and refined for seasons to come.

This article was originally published in The Australian Financial Review (Nine Publishing) on 9 July 2024.