2nd Annual Online Bingo Summit - October 2007
One of the highlights of the year for the online bingo market is the conference arranged by Bullet Business. 2007 saw the second of these summits held in the Regent's Park Marriott Hotel on the 25th and 26th of September. Playing Bingo was at the event to sample the event and report on some of the major subjects the summit would cover. This introduction to the event will give a general overview to some of the themes at the event before moving on to more a more in depth look at a number of the main strands the summit covered.
2nd Online Annual Bingo Summit.
If you've been following the press around the online bingo world the last couple of years, you would be hard pressed to find a piece that had anything but the utmost praise about the growth of the market. Since I started taking an interest in the area for this site, I've seen nothing but positive press and the continued notion that online bingo is blooming. 2007 was forecast to be a bumper year for the game online, with a massive predicted uptake thanks to the smoking ban and growing broadband penetration. The 2nd Annual Online Bingo Summit is testament to that growth and the importance of online bingo for the overall future of the game.
The summit features a range of panels, round tables and talks on a number of different facets of the industry. The first event held in 2006 managed to attract around 60 attendees. By comparison, this year's event has trebled in size with over 180 attendees. As well as the swollen attendance, it's also a sign of the growth that the attendees came from a range of backgrounds. As well as people in the online bingo industry there were a number of people there who were looking into online bingo as a means of broadening out their existing brands or trying to start their own. Like the good press the game's been getting the last year, the buzz from the summit supported a lot of the press surrounding the game and where the market around the game is likely to head in coming years. At essence, that's upwards.
It was acknowledged that the marketplace is very full and likely to get more so. The importance of differentiating the offering was stressed, as well as the mass market appeal of the game and its ability to find itself moving into new audiences that remain untapped and unexposed to the game. Partially through branding and sponsorship, online bingo is fast becoming a part of the culture of the UK. As well as finding these new audiences, time was given over to discussing how to keep them as well as part of this differentiation. The importance of affiliates in the marketing of the game was also discussed, and debated and explored alongside more off-the-wall marketing ideas.
As well as the growth in the market, a number of speakers were of the opinion there would be some consolidation, both at the network and brand level. The dominance of the branded bingo offering will continue to be of importance. Sites like Ann Summers Bingo and Emmerdale Bingo offer an insight into how this trend will continue at a pace in the near future.
The technology behind the game was also under scrutiny. The long vaunted mobile revolution was held under the spotlight and found wanting, but on the bingo software side, there was a lot of interesting stuff to look at both under the direction of the panel speakers and outside in the exhibition hall. The area will be one where I'm expecting to see some interesting ideas flourish in the coming years as sites try to differentiate their offerings.
There was also a much welcomed discussion about the legal implications of the game and the implementation of the 2005 Gambling Act. If you've followed reports here you'd get an insight in to the confusion it was causing webmasters. This was echoed at the summit. As well as things to watch out for in marketing the game, there was also more discussion on the current licensing laws and requirements for online bingo operators. This tied in with a look at the legal aspects of online bingo in a couple of European markets as well.
And talking of the European market, the area also played a part in the event - looking at both the growth areas around the continent, and the legal and licensing requirements for both areas. If online bingo is hitting it's stride here in the UK, then going on the discussions held, its yet to mount the horse, leave the stable in certain areas of the EU. As laws change and clarify, these areas will provide a large untapped market for those out there willing to take it on.
As I've mentioned, there is more detail in the individual sections that follow. In order to make sense of the wealth of great information and discussion from the two days, I've cherry picked and lumped together a number of the discussions under the following sub-headings.
An Overview Of The UK's Online Bingo Market And Its Future
Online Bingo Summit 2007.
Over the course of the 2 day summit, there was a lot of general information and discussion on the state of the industry in the UK. Rather than focus on one of the more specific areas to follow, this report looks at a range of stats, opinions and thoughts about both the current state of the marketplace and the direction it will be going in the future.
One of the first and most striking stats dropped at the start of the conference was that there were now nearly 200 (198) online bingo sites with a UK focus. This shows an incredible growth in online sites - the number is derived from the number of sites in the UK Which Bingo directory. I think one or two older sites still listed in their directory may have closed their doors since, but it's still a marked increase and a massive figure. Given the amount of sites set to appear in coming months, it won't be too long before the 200 figure is a distant memory. I think at the time of last year's summit, there were less than 150 sites listed.
From my time playing the game online, it came as no surprise to hear the customer base is still a very female dominated one. One figure mentioned was that there are around 250,000 people who've tried the game online. I'm not sure how many of them could be classed as regular players, but that's a pretty astonishing figure on its own. Further to that, roughly 80 - 85% of regular online bingo players were women. Compare that to land based bingo, which can claim around 3 million players and has a much older average age. The online version attracts a majority of its players in the 20 - 45 age range.
It's good to see this younger demographic embracing the game, and it offers encouragement that the land based game can get beyond its grandma stereotyping. It wasn't mentioned at the conference, but I spotted a stat earlier that ties in with this and mentions that around 48% of Gala Bingo's new members are in the same younger age bracket. I've said in the past the game is appealing to young players, but the industry has done little to embrace or break down the barriers for them. This kind of gives credence to that opinion, and I'm not surprised so many younger players are doing it online - free from the worries inherent in attending a club for the first time.
The Importance Of Standing Out In A Saturated Market
At one point the question was asked 'Does the UK need another online bingo site?' and the answer was a resounding yes. Given the saturation of the game online, the general opinion amongst a number of the panellists was that there is still a massive untapped audience, thanks to bingo's mass market appeal. The recent sponsorship of Emmerdale by Party Bingo and the success of The Sun's online bingo offering were held up as examples of how the game could tap new areas.
This in turn brings us to the importance of brand. Time and time again the importance of brand was raised, both as a means of giving existing online bingo sites a means of gaining trust, and as a further device for extending the reach of the game. The general consensus was that more and more non-gaming brands will start adding bingo as part of their online presence. We've already seen examples of this with the likes of Woolworths and Ann Summers Bingo, and it will be an ongoing trend.
As well as brand being a means to enticing new players to the game, celebrity endorsements offered another means of less known brands being able to give themselves an advantage in a noisy market. There was some discussion as to the effectiveness of these strategies, and the potential downfalls involved in them, but the feeling was that such partnerships added to the appeal of the brand and were a success for those doing it.
The Smoking Ban And The 2005 Gambling Act
One thing that had been heralded in the press over the last year was the effect the smoking ban would have on the online game this year. So far, it would appear that the expected rush online due to the implementation of the ban has not appeared. Growth has remained fairly steady and people are still attending the clubs. However, it's thought the coming winter may play a part in persuading more regular bingo players to stay at home and try the game online.
Alongside this, the new relaxed advertising laws that came in on the 1st of September with the 2005 Gambling Act will help raise the profile of the game amongst non-players. The amount of adverts for bingo on the TV this year has already helped towards that end, but even more are expected to use the TV as a channel to reach these new players in the coming years.
The act was seen as a positive, if badly implemented and poorly constructed set of regulations. The benefit of white listing sites in respected jurisdictions will help the respectability of the game in the eyes of the audience. Unfortunately many sites have been discouraged from coming to the UK thanks to the expensive tax regime put in place by Gordon Brown as Chancellor. There is a considerable amount of opinion that the bill represented a missed opportunity.
Looking To The Future - Consolidation and Innovation
Going forward, a number of expectations are in place for the market. Already this year there have been examples of consolidation in the online bingo space, and this is set to continue. Examples such as Cashcade buying the Think Bingo/Herotech chain of sites and 888.com buying the Globalcom Network are fitting examples of this. More online gaming companies are expect to buy themselves market share in this competitive arena. As bingo operators grow over the next year or so, it's expected the strategy will also stretch to the purchase of portal and related communities alongside gaming sites.
We'll touch on the Network vs Standalone debate in a later section, but one thing that came up across a number of panels was that unless you're a big brand and have deep pockets, you're better off avoiding launching a standalone site. The state of the market is such that it's become so saturated now, that any new providers would have their work cut out to differentiate themselves from the rest. Given a buoyant and growing market, this seems contradictory, but given the amount of sites already out there and due to come online, it would make it difficult for a new standalone to reach any level of liquidity, and recognition and appeal above established brands.
With marketing budgets expected to rise considerably over the next year on both TV and online campaigns for many in the market, the need to stand out as a destination site is paramount. Any new sites expecting to do this will find their lives difficult unless they can offer something that captures the playing public's imagination. Although, like in the case of The Sun - if they already have a considerable existing customer base and loyalty, this can provide a shortcut to make a new stand alone venture a success.
Amongst all this, the online bingo player is becoming more sophisticated and less loyal. Many have multiple accounts at a number of online bingo sites, and will move around them as they enjoy value for money, and want to get the most for their money. This means picking up bonuses at other sites and going where extra money is available. Added to this, there is a growing awareness of what a network is, and the generic offers and bonuses available at them. To keep these players, sites will need to offer a unique and compelling series of offers and incentives to bring the roaming players back.
In the future, the levels of differentiation to the market place that sites can offer will be a key indicator of the likelihood of continued success. Given the static and simple nature of bingo, innovations to the gameplay, such as bonus games like Jackpot Joy's The Price Is Right Bingo and extra special big prizes like Gala's Kerchingo will become an important means of standing out. As a result we can expect to see more developments in prizes and means of winning them appear.
New forms of online link style games and bigger bonuses will also appear. Gala's Kerchingo game is a fine example of a link up of different properties by just one brand - uniting online, retail and TV audiences in one game. Other big brand sites will need to be seen to do something similar, whether within house or maybe between brands. In offering these big prizes, sites will have to be seen to have achievable mechanisms for winning them. These big, winnable prizes will provide sites with a great means of leveraging the appeal of their offering to both new players, regular players and nomadic players alike.
The Industry Missing A Trick?
Despite the rosy outlook, personally there were points which for me hint at the potential for innovation in the marketing of the game, but were somewhat dismissed. It's fair to say there was some hesitancy in embracing the modern internet phenomenon of social networking and web 2.0. A couple of members stressed that online bingo was web 2.0 in its purest form, and there was some complacency that this area was not really one the providers need concern themselves with too much outside of bingo.
I can't help feeling this is a mistake - already a number of people are using social media channels as a means to promoting their sites and services. With a bit of careful thought and planning, these channels could be a strong means of promoting the games. In fact, if the providers are missing the point, many of their users are not. The example mentioned during the Sun Bingo panel of a film posted by users showing one of them winning a jackpot is a potent example of what the sites should be looking at.
I'll end up with another stat that for me shows the potential for innovation in the game, provided the right people go out and get creative with their plans and marketing. In the UK, there are still 35% of the population who are not online. This is a massive slice of potential players that could be accessed by canny providers with a bit of investment. And who knows? Maybe that last stat turned a head amongst one of industry people sat listening, and during the 3rd Annual Online Summit, they'll be discussing how one bingo operator turned ISP and hardware provider to capture just that market.
Online Bingo And Mobile Bingo Technology Developments
During the summit, there were a number of chances to engage with technology related news and discussion. As well as displays in the exhibition hall, a couple of the panels focused on the technology that drives the games, and future developments.
Now, as someone who's completely detached from the whole mobile phone thing (I don't own one...) I was especially interested in learning more about the mobile phone side of the game. To be fair, it's not an area I know anything about at all, but given the relevance of news about things such as mobile gaming, mobile internet and convergence, I was especially interested to learn more about what was happening on that platform. In recent weeks I've been playing with the idea of making a .mobi site, so if nothing else, I was expecting this to be an eye opener for me.
Mobile Bingo - Not Quite There Yet...
I have to say, the news was a tad disappointing on the mobile front. During the last couple of months I posted on our forum about some non-cash, single player bingo games that were available for mobiles. I was expecting something similar to be in the pipeline for an actual mobile bingo game - but as I found out, there's nothing immediate on the horizon.
During the panels, it became clear there were a number of barriers to creating a paying game of bingo on a mobile phone. Firstly the range of platforms creates difficulty as the nature of bingo and the need for a constant connection would cause problems. Real time it would also be tricky to make chat and the game play work, and the physical requirements for actually typing in chat messages would be a fiddle.
It soon becomes clear, that given the current range of handsets, OS, screen sizes and data transfer methods, anything approaching an offering that even mildly resembles the current online style of game or game play is a long way off. One option could be just to integrate the mobile solution into an existing online service, so, rather than actually play on your mobile, you're able to buy tickets from your online profile, and get the results back after the games are played.
Another hindrance is posed by the skill levels of many in the online bingo demographics when it comes to downloading and installing apps and software on their mobiles. Any bingo game would need to work and be installable with little effort to the player to give it a chance to succeed. It would certainly need to be powered by Java, but even within that operating environment, all the previous issues still apply - as in range of handset, capabilities, screen sizes, etc.
It's telling that so far, no major brand has any sort of offering ready or even near to ready to come to the market. The prizes for those who do crack the mobile bingo challenge are great: Juniper Research estimates that the mobile gaming could be worth $16b a year by 2012, and in 3 years time mobile bingo could see a growth of 40%, with the same for mobile betting. I'm guessing though, that these figures rely on a substantially improved availability of mobile bingo first, and going by what was said by Charles Palmer of mobile gaming company Mfuse - we might not be much further on come this time next year.
Bingo Software Developments
Unlike the mobile arena, the online bingo platform is one I feel quite comfortable with. Given the time I spend reviewing and trying out online bingo sites, I've taken a strong interest in the software that powers the games. For me the software is the most essential piece of the online bingo experience, and can prove the difference between me staying at a site or moving on to pastures new. During the summit, there was some general talk about the software and development side of it - and I got a chance to look at some other software related stuff in the exhibition space.
The popular Virtue Fusion were exhibiting, offering a look at their technology. It powers a diverse range of sites such as Ladbrokes Bingo and Mecca Bingo and I have to say I really like their online bingo software: it's clean, fun and easy to use. However, it has to be said it currently lacks a few features over that of the other suppliers out there.
I have to admit that I'm a massive fan of the Parlay software - it's the most user friendly, has some great touches and feels fun to play. Up until now it's stood out in its many guises powering a number of sites. With its own innovations like Bingo Bets it's long been my platform of choice. I think Virtue Fusion has a slight heads up with its look, but after speaking to the rep on the stand, it will very soon have the features it's currently missing.
For me it's this missing functionality that puts it behind Parlay in my estimation, specifically, the auto buy and pre buy features that have long been conspicuous by their absence. There's also a new side bets component called Bet On Bingo that I've not seen before, and not too dissimilar to Parlay's side games. With these in place, it'll certainly be up there in my estimations as a software of choice.
But that said, both Parlay and Virtue Fusion may be eclipsed in my estimations by what I saw over at the Tombola stand - The Sun's online bingo platform. I have to say here before I go into this, I've been neglectful of The Sun's Bingo offering. I've not yet gotten around to looking at it at all before now, due to a lack of time. That was until I saw the demo at the summit - what I saw there impressed the socks off me and will have me bumping their site up to the top of my to review list. They run their own software, and have put into place both an amazing interface and for my money, some well thought out player limitations to give everyone a chance. As a standalone platform, Tombola have a number of innovations I've not seen before, and ones that the rest of the industry might want to consider employing.
Firstly, there is a low maximum number of tickets that can be bought each game - up to £2 worth. This has the effect of levelling the playing field between casual and hardcore players. It stops players maxing out their tickets beyond reasonable levels and giving them an unfair advantage over your average fun player who's going in and only playing a strip of a few tickets - it's a simple idea, but one I think should be spread. They also use smaller jackpots, but make them winnable - this is also appealing to players in my opinion.
I was also amazed to see something that The Sun Bingo offers that I've not seen elsewhere, an 80 ball version of the game based on the old Party / Four Square boards - right down to having the old fashioned shutters that push across. Like Bingo Bets, there are a couple of bingo powered side games such as the Hamster Racing. The actual software looks really slick and has a real fun feel about it. I'm not sure if they plan licensing it out - but if they do, it could be a winner.
Security And Payment Technologies
There were also a number of sessions on payment methods and strategies, as well as security to protect against fraud. I'll return to payment methods in a moment, but one thing that caught my eye was the presentation by iovation. They featured their system that was aimed at detecting fraud at online gaming sites.
They provide a means of pooling information between gaming sites to provide a means of identifying fraudulent behaviour. It caught my attention because it works around a number of potentially spoofable means for fraudsters to slip under the radar of online bingo operators, such as using proxies and anonymizers. As well as monitoring the behaviour of players, it uses hardware fingerprinting to identify the machines causing issues, instead of focusing on the user.
I wanted to learn more about how the service works to this end. The idea is an interesting one from a security point of view. With many easy ways of hiding the identity of your computer available to pretty unsavvy web users, this sounded like a pretty powerful means of direction. Unless you had a bank of computers to sign up on, this could prove a great means of keeping fraud out of the online bingo world. I didn't get a chance to question the mechanics of how it works, whether it would be something players would have to volunteer information to, or if it just worked seamlessly from the player's perspective. That aside, the idea is a powerful one that I can see growing in necessity as time goes on.
Click And Buy gave a presentation on their service, which offered a range of payment methods that bingo operators could add to their payment services. It was unique in that it allowed players to fund their bingo accounts using diverse methods other than the traditional cards and payment services. They've had their profile raised in the online bingo world recently by being chosen as the preferred funding method for ITV's Emmerdale Bingo. The account can be funded by a number of non-standard top-up methods including via the telephone bill and over the counter at retail tills. The importance of adding a service like Click and Buy to a bingo operator was that it could cover the many holes in funding options at their site, and give them access to new markets worried about using traditional cards for online gaming.
Another payment method featured was the Snap Card - this is a pre-pay card that can also be bought and topped up from retail outlets. One innovation that the Snap Card featured was the potential as a new channel for advertising online bingo with on card branding. One was shown that pictured the familiar Ruby Bingo graphics and added a special offer to players.
Whilst both these cards offer unique methods for funding online bingo games, I'm still waiting to hear one of the bigger retail chains come up with their own pre-pay over the counter solution. Whilst many non-traditional players would not have a problem using their cards online, I know many in the retail bingo area would - be it because they don't have them or don't trust them. The ideal solution would be an over the counter pre-pay method that ties in with the online site, and the inverse for collecting winnings. I can't see how it would be a third party payment method at present, I think the bingo companies would have to develop this themselves.
The European Online Bingo Market And Its Development
European Bingo Panel.
There were a number of interesting panels concentrating on bingo in Europe. Whilst this site focuses on the UK bingo scene, it was interesting for me to find out more about the game around Europe, to see what sort of retail games are played and what the state of the online market is over there.
I can't claim to have understood a lot of the legal and technical side of what was discussed, so rather than concentrate on the technical side of it, I will give some brief insights that I picked up. Hopefully this will provide a starting point for anyone interested in finding out more of the foreign scene and offering their own services abroad.
European Online Bingo - It's Still Early Days
In the UK, the online bingo market has continued to grow and mature over the last couple of years. The game has a wide audience and its appeal is growing with advertising and sponsorship campaigns aplenty. Currently, the UK's online bingo market represents the largest share of the marketplace in Europe.
Whilst the retail game is popular all around Europe, the online version of the game is yet to see the sort of growth that it has in the UK. This is partially down to licensing and law related issues in the different regions. In some areas, broadband availability is another issue impeding the take up of the game. There are a number of cultural differences around the game that are different to the UK's. It was noted that around Europe players don't mind paying a little extra for their tickets as the average card price was higher in Europe than the UK. In the southern regions of Europe, bingo is considered more of a family game - with families playing together as a leisure activity - more so than in the northern areas. One thing they all have in common is they play the 90 ball version of the game is played in all regions of Europe in retail venues.
Over the next few years, a number of countries within Europe are expected to see considerable growth in the size of their online bingo markets. Chiefly, Spain and France, with Turkey and Finland expected to be big markets as well, although so far they haven't quite lived up to the predicted expectations.
Due to the various licensing regimes in place around Europe, some countries pose a lot of problems for new providers trying to break into the local market. There are a number of regions that have a number of legal hoops to jump through to provide online bingo. Working within these at times confusing laws would be a must before it became feasible for a UK chain or site to focus on a specific country abroad. Due to the regional differences, it's not surprising that a number of the new European bingo sites are built specifically to cater for one specific region rather than internationally.
It's worth noting some of the issues a UK provider would face if it tried to extend an existing brand into new European regions. As well as the language of content, they would also have to find ways to manage having a number of languages being spoken by the players in the chat room. They would also need to look at local funding methods and find ways of making them compatible with the existing product. My conclusion is that offering a single product to multiple countries is not the way to go, instead, developing a new region specific brand is far more useful.
As an example this region targeting, Bingos provide a great model of the potential means into the market for UK based suppliers. They provide a distinct offering with a national flavour for each region they operate a site for. St Minver are also doing similar, offering sites with all the content and marketing directed at the individual country. Rather than trying to take established UK brands into these new arenas, they have built up new location specific brands online. It's also interesting to see how Bingos have managed to tap the Italian market given some very strict rules in place; I'll look at that in the next section.
Online Bingo In Italy
There was a panel dedicated to the Italian market: it raised some interesting points about the game in Italy for someone coming from the outside. The game is a popular pastime in the country, which is unsurprising given that Italy is considered the birthplace of the game. Unlike the UK, there are no real big club chains. The clubs tend to be smaller independent affairs, with some smaller regional groups operating a number of clubs in a region. There are around 300 of these clubs around the country.
Now, as for the online side of it, there seems to be a lot of legal red tape to get through, and at present, there's not really the legal framework to offer online bingo for Italian bingo operators. That said, there is currently a loophole that allows the online game to be pointed at Italian consumers, which is how Bingos manage to offer an Italian bingo site. First up, to be in the local market, you must have a license to run a land based club. Now, if you were coming from outside the country, you could gain this license in two ways - 1. buy and run an existing bingo club and 2. partner with an existing bingo club.
This is where it gets confusing (for me at least) - the license you could gain would give you permission to apply for a license to provide online bingo. However, the online license hasn't yet gone fully into law in Italy. So, if you bought a club or partnered with one, the license you'd get would not entitle you yet, and I stress the yet, to supply online bingo. The license you get would allow you to apply for an online operator's license. I say yet, because this second license is not yet in law and and drafted out.
To make matters worse, there is no definite timetable on when this may happen either. Without the second license, you cannot operate locally in Italy. I know Italy has a reputation for over the top bureaucracy, but this seems a little extreme! There is a saving point though, a current loophole in the law allows you to offer the game online from outside of Italy, provided it's on a .dot com domain. This is how Bingos is able to address the Italian market - as it offers its Italian operation via the site Eurobingo.com.
It would seem the moral climate in Italy is currently favourable to the game being regulated and accessible to the Italian public, but it is hindered by a slow legislative environment and is not seen as a priority by the nation's government. At the moment, following Bingos' model and exploiting the loophole would seem to be the most cost effective method of targeting Italy from the outside, however, future changes in Italian law may close that loophole.
Online Bingo In Spain
The game is also very popular in Spain: the retail version can boast around 440+ halls in the country. The online scene in Spain is also growing slowly. I'm going to skip the licensing options for online sites as I didn't quite understand them - there's lots of regional licensing bodies, and it sounded a bit confusing to me. That said, I will instead mention a couple of interesting stats that were mentioned regarding online bingo play in Spain.
The most striking was the ratio of men who play the game. In Spain, more males play bingo online than females. Also, the amount of people playing the game stayed fairly constant all year round, as opposed to the UK where seasonal dips were in evidence. It's thought that online bingo, like the retail game, gave the Spanish an opportunity to get out of the heat of the day. Here in the UK, we have a bit of sun and everyone flocks out to the beach for the day.
With the growth of the market in Spain, the government is also moving towards embracing and creating a regime where regulated gambling can flourish. Online operators considering moving into the market in Spain can once again look to Bingos to see their example of attacking the market. Like in Italy, they are not trying to grow their original brand, but instead launching a localised version of the game, specifically aimed at that Spanish market. With the prospect for growth high in Spain, expect to see a lot more sites going after that market.
The 2005 Gambling Act, Bingo Networks vs Standalone And Affiliate Marketing
Online Bingo Summit.
To round up our coverage of the 2nd Online Bingo Summit, I'll take a quick look at a few other themes that were covered during the two days. I'll give a quick overview of what was discussed and some of what for me were the important points of the topics. First of all, there was a panel on online bingo operators and their duties under the newly implemented 2005 Gambling Act.
The 2005 Gambling Act And Online Bingo Operators
I've reported on the confusion that's surrounded the implementation of the 2005 Gambling Act in the past, and unsurprisingly, this came through in the panel given on the subject. A team of legal experts discussed the implementation of the act from the viewpoint of the actual operators. Online bingo providers have a number of licensing concerns and legal requirements to adhere to way beyond what a non-gaming site like this one has. But there is one thing we have in common - the new regulations around advertising and promoting online bingo. As this site, and many like it run paid advertising, we are bound by the same advertising laws as the operators. Considering one affiliate is considering going into TV advertising, we'd do well to take heed of the new regulations.
According to the panel, many in the industry were disappointed at what was considered a badly drafted plan to bring the UK's online gaming sites onshore. A number of people applied for UK licenses, but given the high tax level imposed by Gordon Brown, it's unlikely many will take them up on it. All operators had hoped for a competitive tax level, given the government's pro gambling messages of recent years. As well as 15% gaming tax, many in the industry would also need to pay 30% corporation tax on their profit. The high rate is enough to make offshore licensing the most cost effective method for online bingo operators. It was mentioned that only 8 of these UK licenses had been applied for, and it was unlikely that they would all be taken up.
With companies going offshore, it was stressed by the panel that they'd need to be very careful about actually physically being 'offshore.' This means that no data from the gaming operation is allowed to be held in the UK. The data from the operation is ok to be accessed from the UK via the web, but there can be no physical data held on UK servers.
The advertising regulations were also covered in some detail, and for me raised some interesting points. For TV there are strict watershed type regulations in place on when ads get shown, to keep them away from children. It made me wonder how that would apply to the online world as well - where there's no real way of restricting the age of who gets shown the ads. Despite generally supporting the new regulations as a means of improving the game's reputation online, there was frustration from one of the panellists about the regulations. Jason Chess complained that the Gambling Commission had basically replicated the regulations for what can be shown in advertising from the alcohol industry's regulations, severely limiting the amount of creative leeway advertisers could employ before falling foul of the regulations.
Affiliate Marketing - Cost Effective Or Combative?
From a personal viewpoint, the panel on affiliate marketing was the high point of the show for me. Affiliate marketing is an important part of Playing Bingo - the advertising we run on the site pays for things like hosting, and my time to put stuff together for the site. Personally, there are a lot of good points to affiliates in the bingo space, and I was keen to see how the big bingo providers valued their affiliates, and how they could see them helping the marketing of a bingo site.
Jess Luthi of Astro Bingo made a good case for using affiliates as a means of marketing her site. For her, the affiliate channel remained the most cost effective channel she had for acquiring new customers. She also stressed the importance of shaping the offer made to affiliates to be one that encourages them to send players to the site. Astro Bingo offers a hybrid deal with a CPA that is only paid when players have paid for and played a certain amount of money. This discourages fraud from the affiliate side, where CPA deals might encourage phantom sign ups and the like. Personally I agree, deals that concentrate affiliates on sending regular quality players could help towards weeding out some of the more fly-by-night bingo affiliates out there and make the web space a better one for users.
Simon Collins of Foxy Bingo was in agreement about the success of the affiliate channel as a means of gaining players, but also had concerns about the means affiliates were using to gain what he describes as his traffic. Affiliates bidding on his keywords are frowned upon. Certain trickier means of SEO are also not appreciated by the bingo operators. Simon spoke of the success that Foxy's free £5 offer had brought them, and how useful it had been for affiliates in acquiring them customers.
As an affiliate, one of the big concerns is the poor communication between affiliates and the bingo operators. The much documented problems between Gala Bingo and its affiliates was an example of the problems that can arise. It was discussed how these big companies should value their affiliates more, as the work the affiliates do could be used to inform the companies' own marketing and targeting of audiences. A good affiliate can provide both a great insight into his traffic as well as providing ideas for marketing and driving revenues to the site. Affiliates are often able to move faster than providers, and put innovative ideas into practice at a speed a company is often unable to manage due to its size.
One example of this innovation came from Chris Wesson from Little Star Media who was considering marketing bingo as an affiliate on TV. This is one example of how the affiliate space is changing and developing. Also on the panel was Scott Logan of Bingo Port - this site is another example of the sort of innovation in the affiliate arena. I've mentioned Bingo Port around here before, and there's an interview with Scott on the site. Bingo Port offers an almost live update of players and prizes around a number of the UK's most popular online bingo sites - prior to Scott launching Bingo Port, there was nothing similar in the space.
Exciting developments like these should be a good indicator of what inventive affiliate marketers can bring to the space and the promotion of the game. Already a number of affiliates are making their mark in new channels of web marketing. With big bingo providers focused more on traditional means of marketing like TV and media buys on big sites, affiliates are currently feeling their way in newer channels such as video and social networking / web 2.0 spaces. It's the affiliate's ability to target these niche markets that makes them such an exciting opportunity for bingo operators.
I asked a question: 'should companies that use affiliates take a bit more responsibility in the way they work with affiliate marketers?'. For me one of the big problems, with the current bingo space is that there is a lot of junky replicated content clogging up the search engines. It makes it hard for users to trust what's written in the space or find good information. As a result of this junky info, I ended up making this site because I couldn't find the sort of info I was after. Some bingo operators offer reviews of themselves for webmasters to publish on their sites, which I find unacceptable and leads to a number of lazy websites out there. The answer was dodged somewhat - but it's certainly an area I'd like to come into sharper focus in the near future.
Networks Vs Standalone - The Debate Rumbles On
One debate that reverberated across the two days was the schism between network and standalone sites. There's information on what a network is elsewhere on the site. Despite a number of talks around the merits of each model, the general consensus from both sides was that both models are worthwhile, depending on what your requirements are. It was interesting for me to pick up on a number of the arguments covered in the debate, as they highlighted a few issues I'd not really considered before now.
A number of pros and cons were discussed by Leigh Nissim of the St Minver network and Dylan Schlosberg of Herotech. Both were in agreement that at this moment in time and given the saturation of the market, anyone deciding to go down the standalone route would need either a strong and already recognised brand or very deep pockets to succeed. Dylan agreed with a lot of what was said about the strong points of networking, adding that in many ways and for many people it was the right route, but for some it would not be and could prove problematic to their future growth.
For speed to market, ease of implementation, simplified running and the ability to be in a state of liquidity from the start, the network model was a clear winner. A standalone site would need to manage all the different aspects of their service - hosting, financial, admin, etc themselves, but under the network model, these were all taken care of.
One of the big concerns about the network model was what happens when your networked brand grows to a level where it could succeed on its own. The move of Gala Bingo away from St Minver to standalone was highlighted as an example of the issues. For Gala the move was a positive one as the brand was strong enough to weather the transition. In some cases though, the loss of players and support could prove to be highly problematic. It was also noted that given the amount a networked site could spend marketing their site, essentially they would be building up a property for another owner, much like the blogger writing a blogspot or wordpress domain blog rather than on their own domain - in the end all the links and press is pushed to a site run and owned by someone else.
It was also mentioned that if you tried to sell a networked site, in the future, it would be a lot more difficult as a networked site than it would as a standalone. The network option was also highlighted as the ideal means for new non-gaming brands to bring a bingo site to the market. As an example, eBay were mentioned. If they wanted to add bingo to their catalogue of services then the network approach would be the easiest way for them to do it. Given the increasing likelihood of this happening in the future, it looks like the networks are in for a good time.
Despite the difficulties for standalone sites, it's not all bad news. The success of The Sun's Bingo is a great example of how a standalone site can succeed in the market place. It was also mentioned that the space is changing and new services could start appearing that would make it a lot easier standalones to contract out sectors of their administration and running. Personally, I'd love to see more standalone operators in the market place. I don't really think there's much to be gained from launching more and more 'skins' via networks like Globalcom and St Minver. However, given the amount of new brands itching to become bingo brands, it's somewhat inevitable that we'll be seeing a lot more skinned network sites in the near future.
Author: David Lloyd