Those who follow the online gambling industry closely will know that it is, in many ways, already light years ahead of other consumer industries in terms of analytics-driven marketing. While online retail is just starting to become truly sophisticated in effectively leveraging big data insights for effective customer acquisition and customer relationship management (‘CRM’), for years the online gaming industry has been harnessing the power of immense data sets to drive effective, targeted marketing. Given this, it might come as a surprise that ‘personalisation’ is again the buzzword at this year’s ICE, the annual exhibition for global gambling currently underway at the ExCel in London.
At last year’s ICE the hype was all about VR (virtual reality) and AR (augmented reality) technology and what impact these could have on the future shape of the online gambling industry. Speaking to operators a year on, the consensus seems to be that this technology is more likely to provide an incremental opportunity (look at 888’s clever development of a ‘free-bet hunt’) rather than drive a transformational change to their businesses.
Personalisation is especially important in online gambling. Putting aside often minor differences in sports betting odds such as player ‘liquidity*’ or graphics interfaces, gambling products offered by online operators are often fundamentally the same. The odds of winning at roulette with one operator is the same as winning with another. This significantly reduces switching costs in the eyes of the consumer.
So, given a relative lack of product differentiation, as a player, why would I pick one brand over another? Above the line marketing, such as sports sponsorships and social media presence (Paddy Power are amongst the best at this in any industry) do help support brand awareness, trust and affinity. However, despite the received wisdom that a punter might often be driven by nostalgia, it is unlikely a canny player will keep playing with a given operator just because it’s the sponsor of their local football team when there’s a money off offer or introductory bonus available elsewhere.
But sustained and ubiquitous free bonuses and enhanced odds offers to all is essentially a race to the bottom. That’s why understanding an individual customer’s preferences and habits is so critical. Essentially, if I want to hold on to a customer who might be thinking of switching to another operator (I might have noticed they haven’t played their favourite game for a while), there’s no point in offering him or her £10 free with which to play bingo, if what they really like is playing blackjack. Equally, there’s no point in emailing that customer if they react better to app push notifications or text messages. And there’s certainly no point paying for online advertising space to target that customer with introductory bonuses given they already have an account with me. Understanding each customer and keeping marketing personalised and relevant is critical to operators increasing customers’ life time values and reducing ‘churn’.
ICE brings together ideas and influencers from across gambling and technology and at a well-attended breakfast briefing hosted by EGR Intel, the trade bible, speakers from BBC Sport discussed the developments made to personalise their app. They commented that, aided by personalised notifications and through focusing on creating content specifically for an ‘on-the-go’ audience, the number of UK viewers of the Rio Olympics on mobile devices doubled from London 2012. This impact spans across industries and the introduction of mobile betting alerts direct to punters is already increasing relevant engagement with the consumers at all hours of the day.
But here’s where the real conundrum lies for gambling operators, and it’s something that the likes of BBC Sport and Amazon don’t need to worry about. It is without doubt that gambling is problematic for a (very small) portion of customers. At what point does hyper-personalisation become intrusive? Where do offers that enhance the experience and entertainment for the many prey on the vulnerability of a few? The line between CRM and ‘milking a customer’ is a fine one, and one that is under increasing scrutiny by regulators and the media.
The operators’ answer to this challenge again lies in the sophisticated use of data and analytics. Used well, data and customer understanding is the strongest responsible gambling tool that operators have. The same data-driven power that allows an operator to identify a player who might switch brands or stop playing, and keep them entertained for longer, is also being increasingly used to track irregular playing patterns such as the frequency of deposits, switches to higher stakes and changes in dwell time that might indicate a problem gaming issue. The more that the online industry can do this, the stronger the trust will be in its services.
Unlike arguably sexier technology trends such as VR, personalisation and data insight provides the single greatest opportunity for companies in the online gaming sector. The better operators understand their customers, the more relevant, fun and, above all, safe the experience will be for all. The bringing together of the good and the great across the industry at this year’s ICE will hopefully speed up this journey.
*In games, such as poker or bingo, where players compete against other players (and online operators act as the host of the game) the availability of similar minded, similar skilled players online and playing at all times is key. Essentially, in product verticals such as bingo and poker operators have to have scale and have ‘player liquidity’ to compete.
Alex Brennan, Partner