If you have been following the business pages lately you cannot help being struck by the huge changes underfoot in the online gaming industry with mega-mergers between Betfair and PaddyPower and GVC beating 888 Holdings to acquire Betwin.
These gaming behemoths have sought scale as a response to spiralling customer acquisition costs, as well as increased tax and regulatory burdens. A profitable customer can often cost hundreds of dollars to acquire. It is refreshing to see a leading online gaming business like Welton Holdings’ Fun88 take an innovative approach to reducing customer acquisition costs.
Quite simply, Welton Holdings' Fun88 has gone back to a basic fundamental of marketing: ‘Word of Mouth’. But the innovation is in that by adding the latest generation of innovative Invite-a-Friend marketing software it has ensured that, finally, referral marketing channel can now drive a significant percentage of new customer acquisition.
But first let’s take a quick look at the challenges facing online gaming:
PRESSURE FROM ONLINE MARKETING COSTS, REGULATION AND TAXES
Online gaming is a fiercely competitive industry where, as Tim Stocks reported in April 2015, marketing costs are typically one-third of the operator’s total cost base:
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