by Sudhir H. Kale, Ph.D.*
On Creating and Supporting Effective E-Gaming Websites
Sudhir H. Kale, Ph.D.*
The e-gaming business has the dubious(?) distinction of being the biggest online money-spinner after pornography. A recent report by Bear Stearns suggests that currently there are somewhere between 1,200 to 1,400 virtual casinos on the Internet. While online gambling currently accounts for only 1 percent of the worldwide gaming market, Sebestian Sinclair, vice-president of Christiansen Capital in New York predicts, that in the years to come, it will exceed the $60 billion U.S. land-based betting industry. An article appearing in the June 7th issue of The Observer quotes estimates to the effect that online gaming business will be worth more than $125bn by 2015.
What¡¦s driving the move to e-gaming is simple economics. Building a half-decent bricks-and-mortar casino will cost a minimum of $400 million these days. Compare that with a virtual casino that you can design with under a million dollars in investment, and that will require about seven people to operate! Understandably, entertainment giants such as Playboy, The Venetian, and MGM Mirage have become very serious about their on-line offerings.
With so many reputed and not-so-reputed players having entered or planning to enter the market in less than five years, the industry is headed for an invariable shake-up. Iain Wilkey, a consultant at Ernst & Young has been quoted in The Observer as saying, ¡§It¡¦s very easy to set up an online casino but it¡¦s increasingly difficult to make money out of it¡K We¡¦re now seeing an industry fallout as the stronger players with brands assert themselves. The smaller, opportunistic guys in places like Antigua or Costa Rica may have done well at first but most will be history.¡¨ Even established names like Harrods and Aspinalls Online are getting their fingers burnt!
It is evident that as the competition hots up, only those operators that make their virtual casinos customer-centric will survive, others will simply perish in head-on collisions on the information super highway. Self-professed e-commerce experts are now entering the fray, eager to offer advice to anyone who would listen. However, even senior executives at some of the most successful e-gaming sites will tell you that when it comes to customer acquisition and retention, their understanding of the issues is far from crystallized. I have therefore designed this straightforward primer for those operators wanting to wager and win in the business of e-gaming. Here are ten things to consider if you are thinking of designing an online betting site or evaluating your existing site. Based on these ten dimensions of success, I have also devised an instrument that directly measures the relative performance of an e-gaming site.
1. Target Market. As with any piece of communication, the first question to be answered in designing an e-gaming site is what we are trying to say and to whom. Like any other marketing activity, segmenting and targeting is the key to success. With thousands of competing providers, your product, i.e., website needs to echo the needs, preferences, desires, tastes, and ethos of your customers. People¡¦s net behaviors vary depending on their computer literacy, gender, national culture, and personality. The key to effective targeting is to first segment your market and then profile your best customers along demographic, psychographic, and behavioral dimensions. Positioning practices and web design strategies should strictly be derived from this profile.
2. Positioning. Simply put, positioning refers to the place a brand occupies in the minds of target customers in relation to competing brands. Most e-gaming brands on the market today suffer from under positioning¡Xthere is nothing special that customers can recall about these brands. In e-gaming, the differential advantage and positioning can be clarified and communicated by developing an online value proposition (OVP), the web equivalent of unique selling proposition (USP). In developing an OVP, managers should identify:
„X A clear differentiation of the proposition from competitors based on product features or service quality
„X Target market segments that the proposition will appeal to.
„X How the proposition will be communicated to site visitors and in all marketing communications (e.g., tag line).
„X How the proposition is communicated across different parts of the buying process.
„X How the proposition will be delivered and supported by resources, internal and external.
3. Brand Awareness. Annette Hamilton, the executive producer of ZDNet has been quoted as saying, ¡§E-branding is more important [than e-commerce]. And it must come first. Because few people will buy your stuff¡Xon-line or off¡Xunless you are top of mind.¡¨ Chuck Pettis asserts that in the new economy, ¡§brands stand as comfort anchors in the sea of confusion, fear, and doubt.¡¨
Both offline as well as online communications are needed for creating brand awareness of your e-gaming site. The main objective for much offline advertising is to promote the specific web address (URL). However, the URL is just the beginning. The company also needs to highlight its online value proposition (OVP) and entice viewers to visit the site by offering special sales promotions and offers. Offline ads on TV, in magazines and newspapers, as well as billboard advertising can facilitate brand awareness. Referrals from offline sources could also be harnessed to create brand awareness.
Online efforts at creating brand awareness typically involve search engines, reciprocal links, paid banners or sponsorships, and e-mail. Search engines and directories are the primary method of finding information about a company and its products. Over 80 percent of web users state that they use search engines to find information. Ways to boost the position of your website in a search engine include appropriate title, insertion of meta tags, deciding on the frequency of occurrence of a word or phrase, fitting hidden graphic text, and sufficient links to and from your site.
4. Speed. Strictly speaking, speed is one of the performance aspects of a website. However, its importance in web transactions, particularly in e-gaming, warrants that speed be discussed as a separate category.
In discussing the importance of speed, Allan Reddy and Rajesh Iyer observe, ¡§ Like an interstate highway at rush hour, the Internet has too many commercial websites trying to reach the public. When the highway is crowded, the computer¡¦s speed matters little; the Internet can still be slow to navigate.¡¨ The 2001 survey of e-gamblers conducted by The River City Gambler Monitor ranks speed as the most important feature determining if gamblers are going to gamble on a new site. ¡§The site features that gamblers say they ¡¥must have¡¦ if they are going to gamble on a new site are those that provide a ¡¥very fast, easy, and hassle-free online gaming experience,¡¦ followed by those providing security.¡¨
5. Security. While several authors treat security and trust as synonymous, their manifestation in the gaming environment does differ. Security relates to user privacy and the leakage of sensitive information such as credit card information and the like. Security concerns revolve around activities related to junk-mail by e-marketing organizations; activities of web-based advertisements that track usage history and preferences through cookies; privacy concerns over malicious programs that can obtain a person¡¦s credit information and personal files; privacy concerns over use and transfer of personal information such as MSN¡¦s tracking of all activities of their subscribers; and concerns over distribution of private information for purposes other than the reason for which the information was initially collected. Trust is somewhat of a broader construct, and relates to the perceived integrity and reliability of the site
Date Posted: 31-May-2002
*Sudhir H. Kale, Ph.D., is Associate Professor and Chair, Marketing Department, at Bond University¡¦s School of Business. His research on various issues pertaining to management and marketing has been published in leading scholarly journals around the globe. A consultant and trainer to several industries including gaming, Sudhir divides his time into research, writing, teaching, coaching, inspiring, persuading, and traveling. Address for correspondence: Bond University, School of Business, Gold Coast, QLD 4229, Australia. Phone: 61-7-55952214, fax: 61-7-55951160, e-mail: Sudhir_Kale@Bond.edu.au