Know your Trixies from your Yankees
February 2008
The last 18 months have seen unprecedented changes in the marketing and PR activity of gambling services operators. Regulatory upheaval, criticism over social responsibility and new codes of advertising practice are just some of the issues they have to respond to. Pearlfinders has been in touch with decision-makers across the industry, from bookmakers to bingo halls and with casinos both on and offline. We thought you might be interested in a briefing on these changes and on where the industry's moving to in order to inform your new business prospecting.
US crackdown 2006
In October 2006, the online gambling industry (and global stock markets too) lost $7bn following US Congress's passing of a bill prohibiting the acceptance of online bets placed by American citizens (see Pearlfinders UK 03.10.06). Some of the sector's biggest players were hit badly; Sportingbet lost 64 per cent market value and had its Chairman arrested, PartyGaming lost 58 per cent and 888.com plummeted 26 per cent. Despite the fall in market value, which some say will take at least 10 years to heal, commentators said how the 'spectre of illegality' formerly associated with offering online gambling to Americans, had been eliminated. With the regulatory situation clearer, 2007 was all about…
Expansion into emerging territories
The redrawing of business models in early-to-mid 2007, saw companies including Partygaming, Sportingbet, Gaming VC and 888.com (see Pearlfinders UK 01.05.07), as well as payment-processing provider Neteller (see Pearlfinders UK 20.08.07) and software developer Playtech (see Pearlfinders UK 01.03.07), increasingly targeting Eastern Europe, Asia and South America. In December 2006, we spoke to Sportingbet's Head of Emerging Markets (see Pearlfinders UK 01.12.06). He told us internationalisation of the company's services throws up issues surrounding the "darker side" of the industry. He said it's not possible to go in to Latin America and "run a TV campaign" - gambling here is often regulated by an unofficial, illegal presence. He said it's all about an appreciation of the market you're moving into, inviting agencies with web localisation, digital marketing and "any other ideas" on how to effectively market gambling services in Japan, Brazil, China and Latin America to get in touch.
888.com, meanwhile, entered talks with British bookmaker Ladbrokes about a possible merger. Nothing came of the development, but we did speak to Ladbrokes General Manager - Europe, who wanted to hear from agencies with Italian capabilities (Pearlfinders UK 06.11.06). He was looking to support the company's efforts to win a number of gaming licenses being awarded by the Italian government, and highlighted market research, CRM and web localisation as services useful to support Ladbrokes's expansion in new territories.
The Brits meanwhile, have faced different challenges
The Smoking Ban
The smoking ban, which came into effect in summer 2007, has challenged the models of traditional bookies and bingo halls - just as it has those of pubs and clubs. The Sales & Marketing Director of Mecca Bingo told us the ban - imminent at the time - would be a big turn-off to a large proportion of Mecca's customer base (see Pearlfinders UK 13.10.06). He wanted to hear from interior design agencies that could bring a "fresh look and feel" to the Mecca environment - to help with its repositioning as a clean, smoke-free environment. Leisure group Georgica, meanwhile, struck a deal in 2007 to offer poker leagues in its Rileys-branded snooker and pool clubs. We spoke to the Georgica Commercial Director, who told us he was ready to "be creative" and attract "new, different customers" to Rileys venues (see Pearlfinders UK 06.02.07). He was receptive to agencies able to promote its response to the ban effectively - primarily an increased focus on its food and value-add attractions such as poker.
Codes of advertising practice, ethics and CSR
The Gambling Act 2005, which came into effect in September 2007 (see Pearlfinders UK 29.11.06), is changing the face of the marketing, PR and promotional activity of related companies in the UK. The legislation - and consultation with the Committee of Advertising Practice (CAP) - allows bookies, casinos and poker halls to advertise on British television, as long as the activity does not: -
· Portray, condone or encourage gambling that's socially irresponsible
· Exploit the vulnerabilities of young or other vulnerable persons
· Link gambling to seduction, or sexual success
· Suggest gambling can be a solution to financial concerns
Recently, we spoke to the new Marketing Controller at one of the largest operators, brought on board to help the company "explore the opportunities" presented by the implementation of the Act (see Pearlfinders UK 15.02.08). He heads a team of 30 covering digital, retail, offline marcoms and NPD. He's still finding his feet, but is considering a review of incumbent suppliers later this year.
One entrant into the industry looking to bridge the gap between gambling and social responsibility is Bigheartbingo, which donates a percentage of revenue to charity (see Pearlfinders UK 17.04.07). We spoke to the company's Chairman - who was looking to drive customer acquisition in the company's early stages and was interested in hearing from an agency able to effectively reach out to the company's target market of bingo players with an interest in donating money to good causes.
An organisation on the regulatory side of things is industry body The Responsibility in Gambling Trust (RIGT). We've spoken to the trust's Communications Director (see Pearlfinders UK 05.09.07), who told us about her plans to launch a large-scale campaign to education consumers on the importance of responsible gambling. She wanted to hear from agencies able to demonstrate "real public sector experience" managing national campaigns. She was particularly interested in prospective suppliers with expertise in social marketing, as well as media planners and buyers. Since our report, the Trust has launched the online gambleaware.co.uk proposition.
Emerging Elements of the Mix
To a certain extent, 2007 was all about mobile marketing - and 2008 is set to continue this trend. Like the consumer publishing and pizza delivery industries, gambling on mobile devices is set to boom -according to those pushing this medium. One operator in this arena is Probability Games Corporation. We've spoken to the company's Head of Customer Acquisition, who wanted to hear from agencies with solutions to drive uptake of the company's offer - through web and print activity (see Pearlfinders UK 15.02.08). The key criteria were understanding CSR issues, the fact he's targeting "casual" rather than "hardcore" gamers, a flawless understanding of mobile marketing and an ability to showcase ROI.
Candid remarks from decision-makers in the industry
An interesting point we've established in our interviews is that agencies don't understand the sector - or at least can't always convince client-side executives they do! This can often cause an agency's proactive prospecting to fall at the first hurdle. The clearest evidence of this was highlighted when we spoke to William Hill's Director of PR - he gets a call every week from a "fluffy and wonderful PR agency" (see Pearlfinders UK 11.01.07), none of which "understand a trixie from a yankee" (see here if you're as clueless as we were). Agencies wanting to work with him should acknowledge the fact "no one loves a bookie" and in fact, his PR needs are more to do with media monitoring services to effectively adjust odds in real time.
Also at William Hill, we've spoken to the company's Group Marketing Director (see Pearlfinders UK 20.04.07). He advised agencies prospecting the company to "understand my business", and spend some time "in betting shops, on the telephone and online" in order to assess how the company connects with its customers.
In Summary
The feedback we've gained from decision-makers in the industry - all of course available on the Pearlfinders Archive - is a useful point of reference if you're prospecting bookies, casinos and bingo halls through 2008. We'd suggest you focus on the following points in your outreach communications: -
· Opportunities presented by expansion into emerging markets
· The adoption of new marketing and product channels
· The impact of national and international regulatory environments on marcoms activity
· How best to exploit opportunities presented by the Gambling Act 2005
· How your agency understands the industry, and can explain the difference between a Trixie and a Yankee