What I learned about igaming marketing in 2019

iGB columnist Nick Garner is in a reflective mood as he casts his mind back over the last year and picks the five things that, for him, stood out the most

Traditionally, the new year marks a time to look forward but as a new decade dawns, I thought I’d glance back at the five igaming marketing matters that piqued my interest the most over the past 12 months.

1. US gold rush: Big money and huge expectations
2019 saw the US online gambling market finally become a real mainstream regulated ‘thing’. The giant US media company Fox Corporation entered into a joint venture with another behemoth, The Stars Group, to launch Fox Bet. And with some 200,000 unique visitors a month as of the beginning of January, they’ve got off to a good start.

In late 2019, DraftKings and SBTech combined to take on the US market. The pair say there are “the only vertically-integrated pure-play sports betting and online gaming company” based in the US. With a potential market cap of $3.3bn and about 12 million unique visitors per month, this is a huge company.

Why such intense interest in the US? Simple: it’s a once in a lifetime opportunity to get a long-term footing in a ridiculously large market.

What did I learn? Opportunity knocks only once when doors open.

2. Affiliate marketing: it’s a grind
Once upon a time, an affiliate could be inventive with the truth, be clever with SEO and make money. But 2019 was the year affiliates had to obey the regulators and stay out of trouble.

As we know, operators in the UK are responsible for the messaging their affiliates use. In turn, this means one strike and you’re out if you’re a non-compliant affiliate. If you’re a new affiliate getting into a regulated marketplace like the UK, it will be tough getting good deals in place.

After all the excitement with Catena’s 2017/18 buying spree, 2019 was a gentle glide to the bottom as their share price dropped from a 2018 peak of SEK148 to SEK39 at the end of 2019. XLMedia’s share price reached £212 in 2018 but had dropped back to £44 by 31 December 2019.

Since both of these organisations own thousands of affiliate sites, their share prices are a good indicator for the overall health of affiliate marketing. And it’s not looking great.

Still, at least there are some grey markets to work in.
What did I learn? If you want to be an affiliate, start with grey markets. If you’re already an affiliate, maybe tone down your expectations a bit.
 
3. Millennials and Gen Z don’t love gambling
Another year has passed and we’re all one year older. And the conveyor belt of gamblers is slowly drying up. The young don’t like gambling.

Atlantic City’s Stockton University released a survey which revealed that gambling is only 21st in a list of preferred leisure activities for millennials. If you’re over 35, gambling is number six on your list. Granted, that’s only one market research report but the takeaway is this: young people are into gaming, not gambling.

Most young people don’t think loot boxes are gambling – to them loot boxes are just a form of ‘lucky dip’. But they are nothing of the sort. They are a $35bn/year market that has so far evaded too much regulatory scrutiny.

Anecdotally I’ve seen industry leaders start to seriously think about the millennial ‘problem’. Why? Because grey markets are gradually being regulated. And now we have a tide of young people that don’t like slots. It’s potentially a serious issue. 

What did I learn? Ignore the changing tastes of young people at your peril.

4. Machine learning and AI: It’s creeping into many places
A few years ago, machine learning promised to change everything – and now it’s finally beginning. The promise of machine learning? It can do what humans can’t.

I was a judge at an igaming awards event last year and one of the categories before us was ‘igaming CRM’. What stood out for me was Optimove, the CRM business that uses machine learning to handle advanced segmentation for email campaigns. Its machine learning technology was consistently delivering a minimum 15% uplift in CRM attributed revenue.

You may not think 15% is a big deal but in igaming, where you’re eking out 1-2% margins, 15% is huge.

Elsewhere, ComeOn has launched a machine learning platform that identifies problem gamblers. Once the system recognises someone in distress it communicates in a personalised way to encourage responsible gambling.

Not everything has worked, though. Chat bots have failed to get traction. But overall, the commercial pressure to increase profits by decreasing human input will see artificial intelligence and machine learning become pervasive in igaming. Those chat bots will return.

What did I learn? The machine learning/AI tide is rising.

5. SEO: Machine learning is starting to rule
On the theme of machine learning, last October saw Google launch the Bidirectional Encoder Representations from Transformers update, or BERT for short. It’s an algorithm which follows on from Panda, Hummingbird and RankBrain.

BERT uses machine learning to better understand the context of a search query and the meaning of individual words. By understanding the meaning of words, Google can pull up more appropriate and satisfying search results.

For me, the new ranking game for 2019 was – and is – satisfying user search intent. Give users what they want and Google will want you to rank. I’ve seen this repeatedly in 2019. I’m seeing a tighter correlation than ever with sites that satisfy and their rankings.

And what about links? They work only in specific circumstances. If your site is new or existing and satisfying, fresh link equity can give you a rankings bump. If your site isn’t satisfying, those links stop working.

What did I learn? Obsess about user satisfaction. Then think about links.

Nick Garner is founder of Rize Digital, the igaming SEO and marketing agency