The changing face of iGaming acquisition and retention
With the goalposts constantly shifting, developing an effective strategy to both find and retain players in the online gaming world is more difficult than ever. By Ben Blaschke
It’s no great secret that online gambling is the fastest growing
sector of the global gaming industry. From its formative years in the late 1990s and early 2000s, the global iGaming market had soared to a volume of US$35 billion by 2013, will reach US$45 billion this year and is predicted to hit US$55 billion by 2018.
Likewise, it is rapidly gaining market share from traditional, land-based forms of gambling – moving from 8% of gross gaming win worldwide in 2013 to 10% in 2016 and likely 12% in 2018. No wonder there are so many companies looking to get in on the act.
Be they land-based properties taking heed of the shifting winds or start-ups wanting their own slice of the pie, it seems there are hundreds of new sites popping up each year offering everything from online casino games and poker to sports betting,
bingo and more.
But just as building a casino doesn’t guarantee players will walk through the door, the path to online riches doesn’t begin and end with simply launching an online presence. With the online space becoming increasingly crowded, you’ve got to fight to bring players your way and fight even harder to keep them, which is why the key to any successful online gaming business is a well-executed acquisition and retention strategy.
Of course, that’s easier said than done in an industry evolving at such incredible speed.
“I think it’s really important, particularly for people that are new to the industry, to understand that where we are now is not where we were 20 years ago or even 15 years ago,” explains Nick Senyard, Managing Director of affiliate marketing, business intelligence and SEO service provider Income Access Group.
“When we started in the industry, mobile gaming wasn’t even there. Even though mobile gaming launched way before iPhones and Androids, it didn’t start penetrating into gaming until 2010. That’s a different concept for people that have only been in the industry for five years because a lot of brands these day are doing 50% to 60% of their acquisition through mobile. It shows you how technology impacts on the business.”
Understanding how the acquisition of layers has changed over time – and the various avenues involved – is crucial when it comes to developing strategies in the present day.
A decade ago, for example, it seemed obvious to all that the growth of iGaming would be centralized in the United States which had both a long history of landbased gaming operations and access to the latest online technologies. Instead, the sudden introduction of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which banned online gambling sites from accepting player payments in the US – essentially rendering them illegal – drove the industry to Europe.
A year later, in 2007, Google and Yahoo stopped offering the Pay-per-click (PPC) service most iGaming sites used to attract customers, which forced another shift in thinking for the industry and led to the use of affiliates instead.
Fast forward to 2016 and it is the rising cost of having so much competition that dominates the current landscape.
“If you squeeze that down to one of the most popular and volume driving channels, which is PPC, it’s becoming more and more costly to get a decent ROI through that channel,” says Marketing Director at Pinnacle, Harry Lang.
“I remember when I first started I was talking to Absolute Poker and their CPAs (cost per action) were US$4. It’s stunning considering now it’s a couple of hundred dollars for bingo and US$400 to US$500 for online casinos.
“With our values the way they are we treat those as acceptable but actually it’s pretty shocking and it’s just down to competition.” So what’s the modern day solution? Data. Or, more specifically, the correct use of data.
“There is tremendous upward pressure on the cost per customer and the only way that operators can really survive is to always be right about their targeting campaigns – targeting the right customers at the right time,” explains Luisa Woods, VP of Online and Internet Marketing at Tropicana Entertainment, which operates land-based casinos in seven US states and is now leveraging those assets in the online world.
“The interesting thing for us is that we do have a long tradition of land-based gaming so we do have access to tremendous third party data sets that we can leverage in order to execute on that kind of effective targeting. The right tool, right offer, right personalization message.”
According to Lang, “The difference between before and now in how we treat data and use big data for marketing decisions is incredible. We used to think gut feeling and a cheap marketing spend was good, now you need someone far more intelligent than you sitting very, very close by.
“I have two people in my Business Intelligence team within 20 feet of me at all times. Those are the guys that look into the back-end data, look into player behaviours and then we fold that out into the CRM (Customer Relationship Management) strategy and into customer segmentation so that players get the right message at the right time on the right device.
“This process is led by data and no, it’s not good enough to just have the data, you need someone with the ability to delve into it.”
One reason for this, says Senyard, is that the players themselves are becoming smarter. Ironically, the very same phones and tablets that have spawned the iGaming boom have also provided the tools for players to search for the sites and products that best suit their needs.
“They are becoming a lot more savvy in their education and where they spend their time and their money,” Senyard offers. “That means we up our ante because players now demand more from the brands they work with in terms of what they want – not only in terms of what we give them but how we retain them.”
If anything, data has become even more critical to the retention of players than the acquisition of them in the first place. After all, is the repeat customer that will ultimately determine a company’s fate.
“Technology is transforming the way that we operate,” explains Woods of Tropicana’s retention strategy. “We are seeing massive processing power brought to bear in our retention programs and we’re getting incredibly sophisticated with our segmentation and targeting.
“The other thing it allows us to do is to start building predictive models where in a matter of 24 hours we can identify what kind of customer a player is going to be and start incentivizing them and offering them bonuses based on predictive behaviours. We have that opportunity to really snag potential VIPs as soon as they walk in the door instead of letting them waltz out and only realizing weeks later.”
Data, though, can’t provide all of the answers. Not all marketing strategies will work. And it is for this reason that today’s most successful iGaming companies are the ones where every department – from web development to acquisition to retention – all work closely together.
“They (each department) are distinct but inherently related,” argues Lang. “From my perspective, acquisition and retention have to be speaking to one another and sitting together, or at least within shouting distance of one another, at all times. The skill sets are very different but you’re dealing with the same customer so understanding that user journey – it isn’t just a matter of handing over from acquisition to retention because then you get lax customer and have to start again from scratch.”
This is a problem often experienced by start-ups, whose over-eagerness to hit the ground running can see too much focus
placed on simply bringing players in. While doing so can result in some boosted early numbers, the long-term danger is that the quality of these players tends to suffer and ultimately far fewer are retained.
“So it’s a dialogue process,” Lang continues, “and that’s how the most successful companies now work. If you do that right, you remove all the obstacles that stop people from placing a bet or having a spin or playing a hand of cards with you because you are giving them everything they want.”
More than anything, however, the key to implementing a successful acquisition and retention strategy in the modern iGaming world is innovation.
Over the next 12 months, marketing avenues such as App Store optimization and targeting Apple TV boxes are likely to become areas of greater focus. Beyond that, who knows? What the future will bring is anyone’s guess. But no matter the means, the message is clear – innovate, innovate, innovate.
“It’s going to be fascinating because the battlefield is changing at such a fast rate,” says Lang. “That’s why you have to innovate, take risks, have the necessary failures and keep trying to find that golden moment.”