Public Gaming International Gaming July/August 2021

16 PUBLIC GAMING INTERNATIONAL • JULY/AUGUST 2021 because you have to apply a different ROI analysis to the different player types. For instance, you’ll spend more on your higher value players. The amount you spend over time is going to grow as your program grows. But making this investment is what will keep your program successful.” This particular discussion highlighted a key issue that lotteries are facing today because an animated discussion ensued, next from Jessica Powell of NeoPollard. “I think one of the biggest challenges of our industry is the divide between acquisition and retention and considering them as two different depart- ments,” she said. “It’s time we forgot about above the line and below the line and focus on the most important thing – the bottom line. There has to be an overarching marketing strategy to connect with players, get them into the funnel, and then retain and maintain relationships with them.” Recently departed from the Michigan Lottery (where she served as deputy director digital operations for the last five years), Pollard’s Shannon DeHaven agreed with Jessica and Merv about the need to concentrate on both acquisi- tion and retention. “But your approach to budget allocation can’t be a ‘set it and forget it,’” she said. “You have to constantly reevaluate where your spend needs to be allocated. As Jessica said, there is a funnel but it’s not necessarily a clear line and it should be regularly reviewed to determine where the most revenue is generating from. Is it the retention efforts or the acquisition efforts? Lotteries have limited marketing budgets so it’s important to carefully spend in the most appropriate way.” Speaking as the CEO of an iLottery company that operates across a number of states, Peter Sullivan of Jackpocket said determining the payback on your spend will help guide your budget allocation. “Even outside of the lottery industry, there are three components to how businesses determine budget spend – what is our cost of acquisition, what is the weekly/ monthly spend on a given segment, and what is the cost of retention,” he said. “And one of the most important KPIs, along with ROI, is the payback period. Different segments of your audience have different acquisition costs and you’re willing to spend a higher acquisi- tion cost for a player that has a higher average spend and a higher propensity to continue to play. The payback period is when you understand how long it took for the cost of the acquisition to get paid back and for you to become profitable with that customer. Once you’ve cleared that hurdle, other business decisions fall into place more readily.” With that set-up, Drew pulled apart the different components of the discussion. “Let’s focus on the player journey chrono- logically and start with player acquisition,” he said. “iLottery player acquisition is different from the traditional side where we are retailer focused. Let’s drill down into those differences.” IGT’s Karri Paavilainen outlined four of the most prominent differences. “First is the media selection for promoting products which in traditional lottery is heavily mass broadcast media such as TV, radio, Out-of- Home and digital, while iLottery is almost all digital and more accurately targeted,” he said. “Next, the lottery’s tactical digital ad- vertising is almost all offer-based marketing while retail tends to target lifestyle messaging and promoting winners. Another retail tactic is to advertise the jackpot spikes and then go silent. With digital, its 24/7/365 of continuous ongoing visibility. The final difference is that digital allows you to measure and understand the effects of your investment. You know immediately if you are successful. Traditional is a bit harder to connect your investment with the end result. The learnings are post campaign while digital is ongoing.” As stated by others on the panel, another important component of acquisition is affiliate marketing. Under this model, a lottery compensates a person or company for generating traffic to its iLottery site which results in an actual player spending money. The entity that brings the players to the iLottery site receives a commission based on the new players level of spend. In Michigan, Jessica Fritz said this model has worked well. “Affiliates have proven to be successful for us since we went live with the program in December 2017,” she said. “So far, this acquisition route has accounted for 34,000 registra- tions and more than 15,000 first-time deposits. But that’s a total net return from affiliates of $6.8 million since the launch. It’s important to us as it’s a channel through which we can reach players who wouldn’t normally see the rest of our advertising, blogs and web sites surrounding iGaming and other ways that we capture player interest. Some of our more high-value players have come through the affiliate channel, especially during the past year when some of those players were looking to reroute their entertainment dollars from other forms of gaming that weren’t available. Next we hope to expand the affiliate program to retailers to allow them to be rewarded from acquiring iLottery players.” Switching to what messages attract iLottery players, and representing the industry’s newest iLottery program - Virginia, Stephanie said that some of the same things that work at retail also work in the digital world. “Just as at retail, our biggest acquisition driver for iLottery has been large jackpots that push players to the site and gets them interested,” she said. “We’ve also attracted players who are looking for branded products like Powerball and Mega Millions or our Virginia Lottery in-state games. And just like at retail, merchandising big wins will always get players interested. The major difference from retail is that we’re able to measure the results from our efforts in almost real-time and make optimizations on the fly.” Continued on page 35 R O U N D TA B L E D I S C U S S I O N “ The major difference from retail is that we’re able to measure the results from our efforts in almost real-time and make optimizations on the fly.”