Acquisition versus Retention is not an unusual dilemma in sportsbook marketing or any other marketing campaign. This is because there is a fine line between player acquisition and retention when it comes to making a profit. While player acquisition is a must in order to start a business and grow, it does come with a cost.
On average, it will take 3-4 months before a sportsbook can make an actual profit from a bettor. The actual timeframe will vary depending on how much a sportsbook will spend to acquire new bettors. The player acquisition range is usually between $300 to a $1,000 per player. This cost comes from not only advertising but welcome bonuses the sportsbook gives out to new players.
However, while sportsbooks are spending money on acquisition, they will take a short-term loss on them. According to bookie tutorials, it was just a matter of time before the focus went from acquisition to retention. This is because the U.S. sports betting market is changing from being “new” to “established” in certain states.
Several U.S. Sportsbook are Switching to a Retention Strategy
At the moment, sportsbooks in the U.S. like BetMGM, Caesars and DraftKings are shifting their stance on acquiring new players. While it is not obvious to most people, sports fans are now seeing less sports gambling commercial. Or at least, that is the case in states where sportsbooks have been in business for a few years.
According to Sportsbook Pay Per Head Industry experts, this is because shareholders want to start seeing profits. In the past 4 years, U.S. sportsbooks have been spending billons on enticing players to use their services. Despite all of this spending, only FanDuel has been able to make a quarterly profit. FanDuel currently own about 47% of the market share after spending a billion dollar in advertising and promotions last year.
For other sports gambling companies, investors want to see profits which means cutting down on costs. Usually when a company starts to become cost-conscious, marketing is where it begins. Following that route, BetMGM is cancelling more a quarter-billion dollars in planned marketing.
Putting most of their focus on player retention will drastically cut down on operating cost. Sportsbooks that have been in business for several years will usually spend 15% to 20% of the revenue on marketing. This is what sportsbooks that already have a client base need to start doing to start seeing a profit.
Sportsbook Retention marketing usually come in the form of free bets where players get a reward for reloading their accounts.
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