Quantifying Casino Advertising Spend

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

—John Wanamaker

This post originally appeared in the September 2014 issue of Casino Journal.

As advertisers you’ve likely seen this famous quote more times than you can count, and as such, it probably makes you cringe. It should, because like all marketing efforts, if you don’t know what you’re measuring, you can never defend the use of resources. Yet, as more and more channels of communication become digital and measurable, the pressure is on to determine how effective your advertising spend is.

Historically, we have relied on our media buyers to guide us in ratings, frequency, reach and GRPs. These are all great measurements of efficiency, but what good is an efficient buy if it’s not effective? In today’s challenging gaming markets, it’s more important than ever to use all your resources to positively impact your business goals: revenue, visits, new card sign-ups, etc.

If you asked your general manager to rank all of the marketing activities from best to worst, database marketing would probably be at the top and advertising at the bottom for no reason other than a profitability report (PR). Database marketing has historically been the beneficiary of great PR. Whether PR stands for public relations or profitability report, the result is the same. We can crank out profitability reports at the speed of a button push. If your general manager decided to cut advertising (and trust me when I tell you this happens more times than you would think), how would you defend it? Here are some steps you can take to make sure you’re never in this situation:

Use data to drive media buy.

No matter what size operator you are, no one can deny that the casino industry has a great deal of aptitude when it comes to database marketing. A customer puts their card into the slot machine, and we get an almost instant personalized view into their behavior. We know what they like to play, for how long and at what pace. All of this data gives us the ability to try a variety of means to get guests to stay a little longer and maybe even visit a couple of more times. With each passing mailer, we get smarter and smarter until we know exactly what we need to do to get someone in the door and how much we need to invest in that visit to remain profitable. Talk to any casino marketer and they’ll tell you something very similar to this.

And while database marketing and reinvestment accounts for the largest portion of our marketing budget, there is often still a portion allocated to the magic of advertising…and magic it is because up until now, we really couldn’t say that advertising was actually working for us. Deep down we knew it did, but there was no data to prove it.

In today’s age of “big data” there doesn’t seem to be a reason for casino marketers (or any marketers) to think that way again. It’s by using the skills we’ve developed in database marketing that we can further refine our knowledge of our customers and use media to tightly target the delivery of messages and content.

Know your audience.

Ever wondered if all of the stories of print coming to an end are true? Ask your customers. Is your budget limited to the point that you can only pick and choose broadcast programming? How do you know where to reach your customers? Ask them.

There are a number of easy to use do-it-yourself survey tools that can help you gather some insights quickly. Casino customers love to tell us any number of things. They will happily share their media habits. You can even segment your survey results dividing up the responses according to whether a guest is high- or low-worth, high- or low-frequency, practically anything you have as a segment. The survey itself can be as detailed as you want, but keep in mind good survey practices so you get as many complete responses as possible. Once you have this information, your media buys can be much more targeted and much more effective.

This graphic originally appeared in the September 2014 issue of Casino Journal.
This graphic originally appeared in the September 2014 issue of Casino Journal.

Look for pockets of opportunity.

Talking to existing customers is great and fine-tuning your media buy based on your insights is even better, but we know we can’t grow and succeed unless we continuously improve on past performance. New members, new revenue, additional visits are just some ways we can do that. This is another way to look to your database to drive some of your media dollars. If you have identified targeted growth segments or zip codes, your media buyer can help you determine where you might be able to find some quick success. Most media buyers will have access to Nielsen and Scarborough products that can further give you insights into zip codes, media usage and lifestyle.

If you use that data on top of your existing zip code data, you can determine test areas for growth. In addition, digital products such as Google Adwords and various online ad networks can narrowly target segments for messages.

Once you’ve identified these target areas you can easily see a before and after view via your canned database reports.

Make sure to set goals.

These goals can involve measurable results such as new members, visits, revenue or theo. That which doesn’t get measured does not get rewarded. Word of mouth and intent to visit are great outcomes from your advertising, but you can’t deposit that in the bank.

There are also social media apps that can integrate into your CRM to layer social media information on top of casino play and you’ll soon figure out how you can become more profitable with those retail offers.

Partnering with your media buyers and database marketers can make you a highly effective advertiser.

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Quantifying Casino Advertising Spend

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