Casino marketing is now digital plus data.

BIAMO BET


15:09 25 April
in Blog

Marketing a business with legal and regulatory complications is no less than navigating a minefield. What can be said in one state, is best left unsaid in another. Ironically, a vibrant, exciting industry as chance gets all covered in gray.

It would not be incorrect to call the last few years, “watershed years” for the casino industry. Europe (including the UK) has always been the leader in the gaming industry. The US is closing in fast now. In 2018, the US Supreme Court’s decision to legalize sports betting was historic. This legalized the $150 billion dollars illegal betting industry. It also brought to the fore, the debate around online betting and games of chance. The Supreme Court ruling had a domino effect across the casino industry in the United States. Incidentally, gaming has also grown because of demand reasons. From 2009 to 2019, in a span of 10 years, the United States tripled its gross gaming revenue from $34.3 billion to almost $100 billion. Then, we had the pandemic in 2020. Overnight, the lure of online casinos went mainstream.

Thus, the casino industry holds strong potential. It is also fiercely competitive. With ever-changing regulations and the rise of digital competition, it is a challenge to run the casino business competitively. Casinos would do well to think through their marketing strategies, to support growth, differentiate themselves from competitors, and strengthen their relationship with patrons and members.

Casino Marketing matters

According to Statista, the US online gambling market is expected to reach $93 billion by 2023 from $67 billion in 2022. 

US online gambling market

With such growth, casino operators need to adopt the right marketing approach to win big in the market. The casino operators are expected to face known challenges of rising competition, decreasing ROI, and a high churn rate.

Rising Competition 

Relaxation of regulations related to games of chance and sports betting will be a key driver to the growth of competition. Not only entrenched casino operators but even new entrants and startups are expected to add interesting offerings on the supply side.

The onset of digital gaming has reduced the entry barrier for new players. Now with limited capital, any person with knowledge of the casino business can enter the market. Rising competition results in more choices for customers who are now looking for a better gaming experience, attractive promotional offers, and new games.

ROI

ROI is sacrosanct for a casino business. No ROI, no investment. With no investments, the ugly spiral of neglect sets in. Not all casino games are made equal too. The RTP % (return to player) differs across games – virtual slot machines, card games, roulette, wheel of fortune, online poker, and similar player-versus-player games. Casinos have to continuously work on the game mix such that they are able to generate ROI while managing player win expectations. There is research to suggest that boomers and Gen-X spend casino money differently than millennials. Millennials spend more on non-gaming services compared to boomers. Thanks to data analytics, these decisions can now be backed by data. Real-time decisions can be taken in line with data insights.

Player Churn

Most casinos lack a proper analytical system to identify and segment customer profiles based on past behavior. The rules of the casino business have changed. In order to be successful, casinos have to adopt a data-driven marketing approach that prioritizes player personalization.

This blog has made a strong case for a Player lifetime value (LTV) framework. Because player retention boosts a casino’s financials. Thus, it is important to approach player retention as a strategic imperative, including initiatives to address player churn.

Marketing plays a vital role in addressing the above challenges.

Marketing to the rescue

All successful businesses have used marketing to grow and become the largest they ever have been. Either deliberate or user-driven, marketing drove promotion and product adoption amongst users in the market.

Before the onset of online gaming and online marketing, casinos used traditional marketing approaches to engage players and boost revenue. Casino floor architecture, lighting, design, even food, VVIP programs, and rewards, were all cleverly programmed to encourage players to play more, spend more, and even invite more participation. There are more – loyalty programs, free starting capital, holiday discounts, hospitality partnerships, and tournaments.

The pandemic, the rise of online casinos, and the explosion in digital media have seen casino marketing going predominantly online.

Casino Marketing strategy is digital

The gaming industry has started moving online and the operational process has changed. In fact, according to Grand View Research, the online gaming market is expected to grow at a CAGR of 11.5% from 2020 to 2027. Keeping such numbers in mind, relying on old marketing techniques may not be a good idea. Especially, when there is no data to track the efficacy of any marketing initiative.

Now, what’s the option for casino owners?  Do they want to live with the declining profits and ultimately perish in front of the competition? Casino owners have no choice but to adopt upcoming digital marketing methods. Businesses from different industries are now increasingly moving online for targeted audience reach and better brand building. According to a Gartner survey, on average 72.2% of a company’s marketing investment goes to digital channels.

If businesses from different industries are leveraging the benefits of digital marketing then why not casinos?
 A big benefit of a digital casino marketing strategy is the availability of data to make scientific business investment decisions. In traditional channels, campaign data is tough to get by, and even when available, the reliability is suspect. In such cases, digital comes to the rescue. To start with, a fundamental digital casino marketing strategy encompasses:

  • Website and Mobile
  • Influencer marketing
  • Reviews

Website and Mobile

Casinos, both online and land-based, need to have a user-friendly online presence (websites and mobile apps) that delivers maximum user experience. Today’s users experience world-class consumer products in the form of Instagram, Airbnb, DoorDash, and Snapchat to name a few. Their basic expectation of a digital product is similar.

The necessary investment in design, user experience, website CMS, mobile architecture, and the delivery stack is indispensable to deliver a sleek user experience. In addition to retaining users, a good user experience will also ensure that casinos get discovered online by ranking higher on search engines and mobile app stores.

BIAMO BET

Influencer Marketing

Gone are the days when brands had to shed millions of dollars for celebrity brand promotions. Today social media has produced a new breed of influencers with millions of keen and enthusiastic audiences.

Many companies are leveraging the opportunity to use influencers’ power for brand-building exercises on social media. According to Statista, the global influencer marketing market value has more than doubled since 2019, standing at around 13.8 billion U.S. dollars as of 2021

Inlfuencer marketing in USA

 

But how to identify if the influencer is the right fit for your company? Look at their past content. For example, on YouTube, there’s a channel named “ Blackjack Apprenticeship “ that shares blackjack-related tutorials. If the content is related to your business then there is a likelihood of a deal. 

User Reviews

Imagine a new movie got released and you are making plans for the weekend. Reviews are out and it came out as a dud.

Would you still watch it?

That’s how important reviews are for business.

Gone are the days when customers used to experiment with services. Today, customers are knowledge gatherers and before making purchases they do deep research about the business.

Review sites are one such tool that customers often use to learn about business quality. In research by Dixa, 86% of customers hesitate to do business with companies having online negative reviews. In Businesses including casinos, consumer perception is everything, and failure to manage it can seriously break the business.

Data fuels a digital casino marketing strategy

Online marketing is a unique amalgamation of marketing strategy and data analysis. To fully utilize the benefit, high-end algorithms are deployed on digital assets and then data analysis is done to produce optimized marketing campaigns. Some use-cases are presented in the following paragraphs.

Predictive Analytics

Gaming analytics is still evolving. Most of the casino analytics tools are backward-looking. They analyze the historical behavior of players and then segment high-value customers for marketing campaigns.

This approach has some problems:

  • It fails to identify potential high-value customers
  • It fails to make offers to infrequent players
  • Mundane repeated marketing offers to high-value customers lose effectiveness over time

There is a need for a predictive analytics tool that can individually target each customer at right time to drive additional revenue. A predictive model that’s gaining traction in the casino business is Recency-Frequency-Monetary (RFM) model. In this method, different offers are given to similar groups of customers and then the behavior is tracked. In studying customer behavior, an AI model is trained to identify the right offer for the right player. The model also identifies dormant customers that can become high value and proactively create promotional offers customized for that subject.

Floor Optimization

Have you ever wondered why small purchase items like toffees or chocolates are kept at the exit corner of a retail store? Retailers know that as these are small-ticket items, the customer can impulsively buy them while waiting in the payment queue. This is one of the floor optimization tactics used by retail stores for maximizing their revenue.

Casino owners can also leverage similar approaches using data analytics. For example, in the casino business, slot machines contribute a major part of the revenue. An AI model can look at the right set of historical data like game trends, seasonality, pricing, machine location, time of day, and any day of the week, to understand customer preferences. On analyzing long-term data, the model suggests optimized options for every dimension. It basically helps management to select the right mix of games, at the right price, on the floor that meets customer demands.

Game recommendations

Personalization is a great way to differentiate oneself from the competition.
Remember Spotify? Can it be that popular without the recommendation features? I don’t think so. Every user has preferences. Recognizing the pattern and offering a set of suggestions improves customer experience. In fact, one research shows that 44% of the buyers become repeat customers if offered personalized service.  Though the recommendation system is common in the e-commerce and music streaming industry, will it work for the casino business?

Needless to mention, casino games tend to have higher engagement. This is because the associated monetary rewards drive users’ desire to take chances. The player’s deep engagement helps algorithms understand player interest better and suggest games that align better with player behavior.

Player development

Player development consists of three buckets arranged in decreasing order of value. The buckets are outbound sales, customer face time, and administrative tasks.

A strong analytical system records the time spent on each bucket and how much value is derived from that VIP customer. After analyzing all the historical data, the system will highlight the right set of activities for a particular set of VIP customers. For example, let’s say for relationship building, the system will guide the host that there’s a 95% chance that the player will respond over an in-person call rather than by email.

 These small recommendations to hosts about whom they should contact, how they should contact them, and what offer they should provide yield better ROI results for the business.

An AI model can also help address player churn.It can identify those customers most at risk of churning, and determines potential reasons for this churn, Then marketing campaigns can target these at-risk customers in a personalized way and work to keep them engaged and playing.

Digital and Data will demand effort

Digital transformation is here. And there will be no escape, even for Casinos. Big and growth-oriented Casinos have recognized this. They have followed it up with a digital transformation strategy backed by a commitment to data and analytics. Casinos don’t have a choice. Leadership commitment is indispensable for a potent strategy. The strategy will need to be supported by investment, talent, technology, project management, and results. All this will need effort and can’t be left to chance.

Are casinos ready?



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