by Graham Carrick
CEO & Co-Founder at RunLastMan.com
From speaking to most large bookmakers on their online offering, their two most critical areas are customer acquisition and customer retention.
At RunLastMan.com we are not a traditional bookmaker in that we enable social groups to bet but we do have a gambling license as regulated by the Gambling Commission. From our position, we have certain opinions as to what is going to happen in terms of customer acquisition and customer retention in the future. Here’s a quick snapshot:
- Cost per acquisition is going to go up
- Retention/ongoing engagement is going to become more important
- Social elements are going to become more important
Cost per acquisition is going to go up
There are only so many ways to acquire customers. As new channels open up, any gain by first movers is quickly eaten up as everyone else follows suit. Currently, major bookmakers spend from £25 to £100 per customer acquired, depending on the country of operation. That just counts the direct marketing costs but not costs relating to staff, rent, rates, light and heat!
Facebook and Google are clearly two major channels that most major bookmakers use. Affiliate is another major channel that also also relies on Facebook and Google. Facebook and Google are both publicly listed companies that need to grow their revenues every quarter to keep analysts and shareholders happy. Search volumes and ad impressions can only continue to grow, so much so that revenue figures will continue to skyrocket by simply charging more per click or impression.
In the hyper competitive market of online gambling, expect those figures to grow enormously. In the US where online gaming is illegal, the CPC for the top insurance search terms is already over $54. It’s no different for betting with some gambling related terms costing a whopping €47 per click.
Retention/ongoing engagement is going to become more important
Online bookmakers are amongst most fine tuned businesses in the world at getting customers to transact. The bookies have an arsenal of techniques up their sleeves such as free bets, enhanced odds etc. to get customers to deposit and bet their hard earned money on their sites and apps. With the huge shift to live betting and large accumulators in the last 5 years, bookies are becoming experts at enticing their new customers to bet after they have signed up. The very real issue though that many are having is that it is very difficult to get customers to come back after their initial sign up and bets, there is very very little loyalty in the sector.
At RunLastMan.com, we believe a solution for this will be for bookmakers to get customers to make medium-term bets. Obviously, most bets happen on the day of the event now, but if bookmakers push customers to make multi-week bets, they will solve their problem of not having customers coming back. A customer that makes a four team acca on a set of matches on in one weekend expires that weekend no matter what happens. A customer that makes a four team accumulator that runs for the next four weeks is far more likely to come back each week.
Looking at the current odds offered by bookmakers (see fancy chart above), only one major bookmaker offers odds four weeks into the future – PaddyPower. Three weeks out are smaller operators Stan James and Marathon Bet, as well as bWin. Most bookmakers offer two weeks of odds at a minimum – Bet365, BetStars, Boyles, Sporting Bet, BetVictor, Ladbrokes, Coral, Will Hill, Winner, Betway, UniBet, 10Bet, 888Sport, blah, blah, blah. The most short-sighted bookmakers offering only the current week’s odds on their sportsbook are BetFred, Blacktype, and surprisingly the ever progressive SkyBet and Betfair (weird since big brother PaddyPower offer four weeks).
Bookmakers that only provide current week odds are effectively driving players to other providers. If punters are going on holidays to the US or other markets where betting apps are geo blocked they need to put their bets on in advance. By not allowing them to do that, you are pushing them to other providers.
Looking at Premier League Fan Forum, the discussion each week inevitably includes how the team will perform in upcoming fixtures. It is the same in Redandwhitekop, Redcafe, Nilsatis etc. Given that all fans are discussing it, there is clear evidence that with the correct tools like cash out, fans who are looking into the future would like to bet into the future. Check the over-round for future weeks and there is always a widening spread week-to-week. The further into the future that bookmakers can get customers to bet, the more lucrative it can be if done correctly.
One ever present issue is that many punters don’t back the team they support on a weekly basis. A solution to this is to offer a group betting game such as a Last Man Standing where players pick a different team each week and offer a corresponding acca for those future picks. From discussions with some of the leading quants in the gaming sector, there is no reason why this can’t be done even up to six weeks in advance, way past the current offering of only four weeks. At RunLastMan.com, we see 97% of players making their picks each week for the duration of their competitions. They come back week after week to make or change their picks.
Social elements are going to become more important
Bookies other than SkyBet have not been able to get social working – see our other piece here on that. From speaking to bookies, the confusion arises from the belief that they need to get customers to join their own Facebook/Whatsapp/Twitter account. In our learned opinion, what bookmakers should be doing (btw which is what SkyBet are doing) is get peer-to-peer sharing to work.
How do we do this? Simply get your punters to share their acca betslips with their mates after they’ve made their bet. Make those slips clickable so that friends can copy the bet and you have a viral effect amongst groups of friends on Whatsapp. Per my earlier post, 26% of lads are in a WhatsApp groups exclusively for betting – see here. Bookies are going to start to make betting slips truly shareable and clickable in Whatsapp and whoever does it first is going to steal market share as everyone else in the group will just click on the link to make the bet with the same bookmaker. Whoever gets this functionality live could in theory get all bettors in that group onto their platform and take ownership of them as a group.