Many gaming and gambling companies that are looking at their media investment will often overlook what long-term value they are creating in their users. Optimising advertising to different customer segments and player types is not enough, we need to understand how advertising affects the behaviour of players and thus discover the long-term value that drives product engagement.
Rather than skirmishing segments for new sign-ups or pulling in players with promotions we want to capture the flag through player loyalty, discovering the long-term value in user behaviour and advertising strategy.
Working with a well-known mobile gaming brand, with one of the biggest player bases and most successful mobile games of all time, we identified that advertising drove the user throughout their lifecycle and not simply at the start, as with many retailers and goods.
We found that TV specifically drove the user through 3 main channels anging from the short to long term:
Installs: The shortest term action whereby new users see the TV campaign and download the game within 2 weeks of the air date
Active Players: A combination of lapsed players who have historically installed but dropped off and the extended playing of those who installed due to the advertising originally. Typically up to 2 months following the campaign
Spend: The increase spend per person due to the TV campaign driving a higher quality of player and improving the image of the brand, up to 6 weeks following the campaign
Using this information we can identify both the direct and indirect impact of media in driving certain KPIs and brand metrics, for example the impact uplift of TV onto installs and the subsequent impact those installs have onto daily players.
Having a constant TV presence not only boosts the product it is advertising, but also other products in the portfolio. Large TV campaigns often have a direct impact on brand metrics causing a residual impact in other areas such as brand awareness, product mix and even competitor strength. If we unpick the uplift TV has on brand metrics we can begin to identify an even longer term impact of TV through metrics which are traditionally slower moving.
In many cases the halo impact of TV for a flagship product can increase KPIs across the product mix due to higher brand awareness. By aligning cross promotion between games and related games players can be leveraged. Boosting the amount of installs and players means that the potential audience to cross promote other games grows, increasing the potential for success of future releases. This impact also extends to the channel mix. For the mobile gaming brand, TV advertising created an improvement in the performance of display advertising. In a market surrounded by low quality titles and even lower quality advertising, having a TV campaign coupled with good quality display helps to improve the brand image and therefore installs and the likelihood of users to click through display advertising.
For sports bookmakers, the best place to advertise is obvious; TV ads during live coverage of major sporting events. However, with several companies competing over a limited number of advertising spots, prices for these desirable spots are sky high, with a CPT over four times as much as for regular TV spots. Live sport advertising is also typically bought in auctions, which mean there is little flexibility and less desirable spots are bundled in with the main events.
With such high pricing, making a positive return on investment from TV advertising is difficult. To do so, advertisers need to explore other areas for advertising away from the premium spots, and most importantly take a longer-term strategy.
We analysed the media performance of a major bookmaker, looking both in terms of increasing betting activity and generating new customers. Increasing betting from existing customers is the fastest way to generate a return, and so a short-term strategy would favor running advertising to maximise this short-term response (e.g. featuring odds & offers on upcoming events).
New Customers are typically given a signup offer (free bets or enhanced odds) which mean they are of little value to the bookmaker in the first month. But if the relationship can be maintained beyond the first three months, our data shows that customer loyalty from this point on is very high, and these customers will generate a return for the bookmaker that may last several years.
One specific piece of analysis run by Gain Theory was to produce optimised annual media budget allocations for two very different scenarios. The first maximised the return within the calendar year, and the second maximised the return over 5 years. The media mix for each scenario is quite different. By taking a longer-term view, the bookmaker could spend less money on the highly-priced live sports spots (24% compared to 38%) and instead use that money in regular TV spots to attract new customers across both Sports and Casino products.
To maximise the success of a long-term strategy, we need to understand which factors drive customer loyalty; and which lead to players no longer betting; or moving to a competitor. Whilst player acquisition is led by mass marketing, most of the marketing to existing customers will be done at the individual level, e.g. in app or through email. Timing and content of individual marketing is vital to its success, and so it is key to know when customers are at risk of leaving, and what messages would persuade them to stay, or play more.
Gain Theory analysed performance of a sample of gambling players over 3 years, in order to understand the drivers of behaviour.
The first stage of Gain Theory’s analysis was to create a segmentation to split customers into 4 broad categories based on what these customers predominantly bet on. This segmentation created 4 groups:
The model was then run for each of these groups, to understand the probability of a player making a bet on each day, based on a large range of input factors.
The two most important predictors of betting activity for all four groups were recent betting activity and win rate. Players who bet every day for the last seven days are 75% more likely to place a bet than those who only bet once in the past week.
Betting success is also important, with players who have been highly successful in recent bets over 10% more likely to bet again (though the impact is smaller in the Football Bettors group due to bettors who mainly place accumulators where the probability of winning is very low). Players are also 5% less likely to bet on a hot summer’s day than on a cold day in the middle of winter.
Whilst bookmakers cannot control these factors, they can respond to them.
Understanding when a customer has moved from a high probability of betting down to a lower probability can be the flag for the need to send them some marketing (for example an email with a promotion) in order to stop the player from stopping betting with the bookmaker permanently. Equally, a rainy day just after a heatwave would be a good time to contact players who have got out of the habit whilst enjoying the hot weather.
Where we have seen a marked difference in the segmented groups is in the ability to cross-sell. The Football Bettors and Horse Racing Bettors seem to be distinct groups. In fact, a major international tournament such as the World Cup decreases the chance of Horse Racing Bettors making a bet, perhaps being put off by the dominance of football on the bookmaker’s website.
Casino and Other Sport Bettors though have a positive impact from major horse races and big football matches, so these people are the ones to target around the time of these big events.
The impact of above the line media on increasing the probability of a customer making a bet is generally quite small. Football Bettors are c. 1.5% more likely to bet if they have seen TV advertising, but the risk from Competitor advertising is much larger.
The most noticeable egative impact was on Casino Bettors, who were over 2% less likely to bet during a competitor campaign. Casino TV tends to be run in campaigns (as TV is traditionally run for most brands but unlike sports bookmaking advertising).
Therefore, a timely defensive marketing campaign can be run to negate the effect of the competitor and offer an incentive to stay loyal instead of switching.
We did notice one positive impact of above the line media that stood out. Horse Racing bettors were up to 10% more likely to bet if they had seen press advertising.
Horse Racing press is often more informative than stylish, listing odds rather than featuring a brand message. These ads are effective, in that if a Horse Racing bettor sees a bet they like in the ad, they are likely to place the bet with that bookmaker.
Knowing this information is not only useful in terms of ensuring press advertising is maintained. It also poses the question of if other marketing can be effective for Horse Racing bettors by getting the same information across.
With high prices and a high level of competition, making the marketing budget pay back is a tough challenge for marketers looking to capture players.
The best chance of success is to take a longer-term view, and focus on building the player base and it’s loyalty rather than paying premium prices to fight for short-term gains. To make this strategy work however, we need to understand the players and maximise their value.
Gain Theory analysis can help maximise efficiency of customer acquisition through marketing analysis and understand the best way to increase customer value through customer level analytics. Gain Theory can also advise on the best mix of acquisition and customer marketing to maximise the long term return.
