The way forward
The industry is coming of age resulting in new iGaming operators launching every month. Consequently, this increase of new iGaming operators, is pushing acquisition costs sky high, whilst also becoming more challenging to acquire and retain these players due to market regulation in certain markets.
This in itself has made player acquisition a tough game to be in. Here are 4 threats to player acquisition which can be turned into opportunities and boost your player acquisition strategy:
1. Cost Per Acquisition
Over the past few years, acquisition costs have sky rocketed within the industry. iGaming operators are paying up to around €400 CPA on traffic with the average being around €200 per player with revenue share also being charged on top of that. This is what makes most acquisition strategies for operators non-profitable as they spend too much on marketing per player when it takes at least one year to get this money back if not more when you take in to consideration the costs of the player from the following:
2. Payments costs
3. Bonus costs
4. Hosting and tech resources
5. Customer support
6. Other human resources that get involved per player cost
2. Increase in PPC Prices
As the price of Pay Per Click goes up, player acquisition costs follow suit. Many operators are still controlling their PPC spend pretty well. But prices are going to keep rising and the struggle to stay profitable is real. Many operators are turning to SEO to generate more organic traffic. Done well, this translates into higher conversion rates too, so it’s a good area to invest in. The great thing about SEO is that it doesn’t stop when you stop investing. Even better, it has a cumulative effect where past efforts keep working alongside current results. This causes cumulative exponential growth.
Now is the time to invest in SEO, so that you are well established with your organic traffic as cost per click becomes prohibitive.
3. Saturated Markets
Market saturation affects iGaming operators as well as affiliates. It has the undesired effect of pushing affiliates to request higher cuts. Affiliates are becoming harder to negotiate with because they are seeing the numbers dwindle due to saturation. They now have to work much harder to generate quality leads for you.
A potential solution for both is differentiation. Even this requires investment, but it produces positive acquisition results. It also boosts figures across the whole operation positively affecting retention, player loyalty and spend. You can create differentiation by improving customer support and investing in real time, personalised reactivation calls. Work on your customer experience by treating you current player base as you would your VIP player segment.
4. Bonus Legislation
The Swedish Gambling regulator has recently enforced the new bonus legislation. The new regulations say that iGaming companies operating under a Swedish license can only offer one player bonus to acquire a player.
Cash back promos and similar incentives that are financial in nature are also considered a bonus under this law. Most player acquisition strategies depend on converting new players using such bonuses. Even affiliates depend on this for acquisition.
This makes it harder to convert freshly acquired players into depositing customers. Targeting free players with such bonuses was a common strategy that helped improve conversion rates.
This is going to cost many iGaming operators a fair bit of revenue. A potential solution for this could be to focus on player reactivation – getting registered but non depositing customers to make a first deposit through an outbound call. We at Enteractive, have created a service which can specifically target and resolve this problem.
Share this Post