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.

Quantifying Casino Advertising Spend

Are you a value engineer or an experience engineer?

Today I read a headline about brands needing to compete on experience rather than price. Those who know me, know that this was an instant magnet to me because I am very passionate about competing on price…I don’t like it at all.

I’ve recently been working with a predictive analytics company. Those who don’t know me well will wonder. Huh? My wheelhouse has traditionally been brands and communications. However, I’ve been lucky that my work experience has exposed me to all sorts of marketing specialties including database marketing. I bet most of you don’t know that database marketing was part of one of my earliest casino jobs. This particular project has been really eye-opening and a little confirming that I do have a skill set beyond the assumed. Hmmm…This sounds like an interesting blog post for later, but for now, I want to talk about how these two worlds of mine collide.

Through the work I’m doing with database marketing, I’m afforded the opportunity to talk to marketers about how to identify the people in their database that have more value than the past ADT tells them as well as those who may be at the end of their lifetime value. These conversations have always been about reinvestment and the offers they should be making.

Casino marketers have a way of looking at their database programs in a variety of ways. Some call them “core mailers”. Some refer to them as the “monthly newsletter”. Interestingly, news is probably the lesser of the focuses of these monthly mailers. As I’ve worked on designing some of these pieces, it’s all about how to layout the offers front and center in a way that makes it easy for customers to want to redeem them. I’ve sat in a number of focus groups over a variety of years and markets, and I know that the offer is what the customer is interested in. They’ve said it, “I take my offers and throw the rest away. Then, I put my coupons on my refrigerator door.” As the one responsible for the communications platform, this has always been kind of disheartening. It has made me think the same way. My design directions have been totally influenced by those comments, but at some point I have to ask if it was the chicken or the egg. Do customers just look at the offers because we designed the platform that way or did we design the platform that way because the offer was most important?

source: medust.com
source: medust.com

Our markets are getting more and more competitive each day either by virtue of new entries or because the casino down the street isn’t afraid to over-invest. It makes me think. It makes me wonder “Why do we continue to compete on price when we have such distinct brands and personalities?” What if we created these mailers in a way that is still easy for the customer to understand what we’ve given them, but also gives them a piece of mail that they want to put up on the refrigerator rather than throwing the communications part in the garbage? What if these mailers become an actual piece of advertising and messaging?

There is no denying that this type of approach could cost more to produce. Could it influence more of your customers to choose you over your competitor even if the offers aren’t equal? What if we experience-engineered our database marketing creative rather than value-engineering it?

Take small steps if you’re concerned about budget contraints. Instead of sending out postcards the size of the ones you get when it’s time to bring your puppy in for her shots, consider a larger size that will stand out in the pile. How about special coatings to make that invitation stand out? Think about sending a promotional item tied to the theme of your event. If your agency has a good production manager, they’ll be able to give you all sorts of ideas for shipping containers, materials to be used and printing process that add pop.

Why choose to be a value engineer when you can be an experience engineer?

 

Are you a value engineer or an experience engineer?

The Data Fact Gap

I’ve been working with a client for a few months now. They work in a field that is a little off my usual path: predictive analytics. It’s been a great experience as I’ve gotten the opportunity to strengthen my database marketing muscle. Like most muscles in your body, you never know how much they can bear if you don’t use them.

The following is a recent blog post for their website.

As professionals, we all know that technology has changed the way we do business. Whether you find the increased dependence on new technology as good or bad often depends on how effectively the tools are used. Over the years, this problem has been illustrated in many ways by Stics and a variety of other experts.

Fact Gap Graph


This particular Fact Gap illustration was first attributed to the Gartner Group. It will help us describe how data technologies are, on the one hand, progressing and on the other, creating new data analysis problems.

The “Data Fact Gap” was created by the explosion of available digital information accumulated in recent years. With technology system advances, increased data storage capacity and Internet usage it is now easy to collect mountains of data. While the volume of retained data has grown exponentially and spread across all industries, so have the data management challenges it created and the even greater marketing opportunities that mostly lie dormant.

This abundance of data creates new problems that force database marketers to devote a lot of time and resources to filtering information into data segments so decision makers can frame a concept, problem or question.  While this approach is intuitive to the human brain, it does limit our ability to make a fully informed decision from all available data.

Why You Need Good Data

Intuitively we often think we already know what our customers want. However, that is not always the case.  When we make business decisions by filtering our data down to a few variables we miss the more accurate and complete view of the data.  Without hard data, there’s no way to be sure truly objective decisions are being made. Worse, because we think we’re making objective decisions, we often don’t seek an outside perspective.

What we really need is an objective analysis, wielding as many customer factors and data points as possible. This approach helps us see the potential hidden below the common database marketing analysis.

Statistical Predictive Analytics Solves the Problem

One way to harness the data explosion and make better marketing and business decisions is to use predictive analytics. Predictive analytics uses the science of statistics and is capable of considering unlimited facets of a situation. Predictive analytics for marketing can increase a marketing campaign’s return on investment by 10 times compared to a typical SQL analysis that might only evaluate (about) five variables. It takes the data that you already have and gives you information you can use in your marketing campaigns, such as:

  • Identifying customers you are currently marketing to who are unprofitable or about to reach the end of their customer lifetime value
  • Identify high value customers hiding in your database or prospects you are not marketing to
  • Suggest more profitable marketing programs
  • Identify the lifetime value of various members in your customer base

Statistical modeling with predictive analytics is proven to help make more informed decisions and increase profit margins.

The Data Fact Gap

The Number One Rule of Marketing

Keeping it simple seems to be the hardest rule to stick to, but it is the most important. Take a moment to think like the customer and you’ll realize how much they are processing at once. Focus.

PRGUYONLINE-www.prguyonline.com

Clinic Division We're #1

It’s no wonder we’re all suffering from information overload.

Emails, instant messages, likes, tweets and texts clog our mailboxes, mind and memory.

So what’s a marketer with a message to do? How do we break through the clutter, capture consumer attention and build business for our clients and customers?

Stick to the rule of one.

Engage one audience, deliver one message and craft one call to action.

One Audience

Marketers often cast too wide a net when choosing their target market. If you want your message to resonate–narrowcast (spreading an advertising message to a select demographic). Choose one audience, (the more focused the better), know their pain points and speak their language. Don’t just speak to teachers; speak to 5th grade history teachers from the Midwest.

One Message

In his seminal book, The New Positioning, Jack Trout notes that minds hate complexity. So what’s the best way to enter minds…

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The Number One Rule of Marketing

Are you ready for a natural disaster?

hurricane_flagLast week’s headlines warned that the first named storm of hurricane season was strengthening. Lucky for me, it wasn’t headed in my direction, but it got me thinking about how we handle communications during these times. 

News stations keep us in the loop of the development of the storm, its path and what the impact to our lives and properties could be. It’s a serious situation when the news broadcasts continuously, and yet…guests keep coming to our doors. Whether you’re a business that is in high demand in preparation for or after a disaster or whether you’re a business that people can escape to in these times, communicating with guests keeps them safe and could limit the potential danger at your properties and employees.

At my last job, we always had a so-called “crisis communication plan”. There were a select few who were trained and permitted to speak to the media but that was traditionally a response to inquiries. It wasn’t until social media became such a huge part of our lives and work that we realized we needed to be pro-active in our communications. We took a good long look at all of our communications channels and built them into a pro-active plan. This list was developed for casino operations, but they can definitely be put to use even if you’re the mom & pop grocery store (or one that’s even bigger). I don’t know about you, but when I’m running around getting my “hurricane kit” ready, it would be nice to know who has run out of water, bread, and gas, etc. It could save time and a ton of aggravation.

MEDIA OUTLETS

Typically, ads are delivered to media outlets some time in advance and a storm can shorten that timeline dramatically. Your media buyers can contact each outlet to understand the new timelines and requirements. Canceling a buy isn’t always an option. Have substitute ads ready in case you have to cancel your promotions or events. Remember to keep the safety of your employees and guests in mind when drafting these ads. Have ads ready to announce your reopening for regular business.

EMAIL

Do you have an email list? Whether it’s made up of 10 or 10,000 addresses, this can be a great real-time resource for you. Guests will want to know that you’ve closed, if you have a date/time set for reopening and that you’ve reopened. If you have any offers that would have been valid during the closure, it could mean a nice pick-up for a sister casino if you pre-arrange for those offers to be valid during the closure. This may involve regulatory approval. Now is the time to research what needs to be in place…before you need to.

TEXT MESSAGING

This is a great way to send short announcements to your guests, but this channel could prove invaluable to your operation when you need to notify employees of a projected reopening. When normal cell phone communications are hindered, texts have shown to be able to get through in a pinch. Have you started building a permission-based database of phone numbers?

SOCIAL MEDIA

You better believe your employees and guests are keeping tabs on everything during a disaster. It has proven to be one of the most reliable ways to know the status of friends, family members and property. Keep in mind some of the best practices for businesses communicating via these outlets. Pictures grab the attention. Work with your agency to have graphic elements ready to communicate closures, rescheduling of events, opening times, etc.

Most importantly is coordination of the message you are distributing. For casinos, there are regulatory bodies involved, and you must be aware of their direction prior to releasing information. If you have a separate person in charge of media relations that is not a part of the marketing department, make them an honorary member during the crisis. Human Resources should also be involved. The messages you direct at guests will also be seen/heard/read by employees. It is important the messages match and that all departments are aware of what the other is doing. This is no time to get protective over your “area”.

Are you ready for a natural disaster?

Ethical Scenarios for Casino Player Development

My new friend Amy Hudson knows a thing or two about casino hosts. She poses some great questions here. What would you do?

Don’t forget to follow her blog.

Helpful Ideas about Player Development

In these blogs, we have covered a lot of ground: things hosts should do, things they shouldn’t do, how to evaluate them, how to set and measure goals, and we have gone into some depth on a few of these topics.  One important aspect of a host’s job, however, is one we’ve only briefly touched.  It is especially important that hosts keep in mind the effects of their decisions and the ethical implications thereof.  This post is designed to be interactive, so please comment with your responses.

Let’s pretend for the purposes of this post that I am a successful casino host.  I work at a property that has thus far been blissfully free of growing competitive stresses, though some of my players occasionally travel to Las Vegas for an extended gambling vacay.  I’ve been at my property for just over 5 years, and I’ve developed…

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Ethical Scenarios for Casino Player Development

Taking Steps to Leadership

Global Gaming WomenIn my career, I have been very lucky to learn from many smart women. Amanda Totaro taught me how to “feel” my marketing efforts. Elizabeth Blau introduced me to the world of food & beverage development, how to turn a concept into a strong brand and how everything goes into delivering that promise. From Virginia McDowell, I learned to go beyond my brand marketing “box” and how to make time to share my knowledge and passions with others. These are only some of the women that influenced both my life and career.

A couple of years ago the American Gaming Association formed Global Gaming Women (GGW) in an effort to create a broad network that allows women in gaming to connect with their colleagues at events, through online coffee breaks and a mentorship program.

From the casino floor to the board room, more and more women are stepping into great roles and GGW gives them a resource to grow.

Still in startup mode, GGW can’t be at all events, but they were a part of the Southern Gaming Summit which took place earlier this month. I was lucky to be there. It was really impressive to see so many women in one room leading the way for so many casino operators, and learning from four women in particular who are paving the path.

Shari Leicht is president of The Edge by Shari and Associates. She runs a huge bingo hall and started a supplier side business because she was unhappy with the service she was getting from her vendors. She shared a great lesson of listening and caring about “the dash” – the one that comes between the day of your birth and the day of your death. She also reminded us that as women we should remember that respect given is respect received.

Holly Gagnon is president/CEO of Pearl River Resorts. I came across Holly in my Harrah’s years. She was always the type of person to take on a task even if it was outside of her wheelhouse. She always believed (and still believes) that no role was ever a small one. She recommended we become the “go to” resources in our respective organizations. Be grateful, but don’t let anyone disrespect something you bring to the table.

Debbie Biggs is the director of finance and human resources for Grand Casino Biloxi. She, like Holly, believes in taking on roles you never expected. Step out of your comfort zone; consider stepping sideways or even backwards. Doing so creates confidence and resilience. She also reminded us not to sacrifice ourselves to the work.

Principal and Co-founder of the Rainmaker Group, Tammy Farley asked us to gain the confidence to ask for what we are worth. She recognizes that we will have to sacrifice personal events in this business we’ve chosen, but that we need to choose which things CAN be sacrificed. When we look back will we know we made the right choices?

As you can see there was a great deal to learn and even more to think about. Thanks GGW for bringing us together.

Taking Steps to Leadership