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Sportdec CEO Bruce Bale – Addressing non-betting football fans

Innovation forms a crucial aspect of many industries, particularly amongst the plethora of spheres within gambling and gaming globally.

With the cost of acquiring new customers and the rate of churn increasing, one particular challenge is how to engage and monetise new customers.

Bruce Bale, CEO of Sportdec, briefly discusses this challenge and the motivation for innovation: “[It] is about increasing revenues from the customers you already have, it’s about acquiring customers from competitors, and in particular about acquiring brand new customers, and how do you do that by driving them to be more engaged to play more frequently, to become more engaged in terms of the number of bets they place on individual events, and to improve margin.”

Football is one such example where monetising non-betting fans is proving particularly tricky, with studies showing 23.3m football fans currently reside within the United Kingdom, however 79.5% are currently inactive in a betting capacity.

The wider picture highlights 45% of fans do gamble, but 31% of those play the National Lottery only, with just 18% overall showing some form of betting activity on football. Social media has long been hailed as the answer, but with Bale highlighting a significant decline in engagement, the number of people seeing posts from gambling companies, and the number following them on the various platforms and having a propensity to gamble as result, the impact of social media is seemingly on a downward spiral.

“What else can we do differently? I believe the answer lies in viral effects and network effects.”

Social games are similarly disregarded, with the majority of these focused on casino, alongside just 7% of global revenue for the vertical coming from Western Europe, with the UK a fraction of that. Bale stated: “So if not through social media and through social games, what else can we do differently? I believe the answer lies in viral effects and network effects.”

Adding on the differences between the two: “A viral product centres on acquiring more new users for free. If I can acquire one person, how many other new users will that person invite, which reduces cost of acquisition and CPI – the more people I get, the more people that are likely to continue to join.

“The difference between viral and network effects is that those products are about creating defensibility, building an audience, building scale, where there is less incentive from users to leave that product or for new users to use a competitor product rather than our own.”

Asking the question “Has innovation led us to successfully adopt strategies that optimise for virality?” Bale picks out six key examples of viral effects he believes could be successfully leveraged by the industry:

  • Referral Loops – “How can we truly incentivise users in the same way that Airbnb would incentivise me as a guest to have others become guests, and therefore give me credit, or incentivise hosts for others to become hosts and receive credit?”
  • Double Viral Loops –  “How do we actually get people to connect with each other in the same way Facebook and LinkedIn do?”
  • Additional Product Incentives – “What can we do around additional product incentives that don’t actually cost us money? DropBox gives you 2GB of free memory when you join, and then for every person you invite, you can have an additional 500MB – up to a maximum of 32 people, an additional 16GB. I think it could be interesting to explore what the equivalent may be for us in football and sports betting.”
  • Making Sharing Easy – “How can we leverage tools that products such as Gmail and others have used, around the launch of products, restricting early access but facilitating invites through existing users who are friends.”
  • Make Sharing Fun – “How can we leverage the competitive element? I think there’s definitely a sensitivity around sharing our betting behaviour in a public forum, but there is a way to compartmentalise that privately, so we can still compare our own performance to our friends, even perhaps in non-monetary ways.”
  • Leverage Existing Platforms – “How can we leverage the networks that are already out there, Facebook, Twitter and more particularly the messaging networks, WhatsApp, Facebook Messenger?”

“There’s definitely an opportunity for innovation, by providing sports fans with a new alternative”

Network effects as defined by NfX, a San Francisco investment firm, come in 13 types, which in turn fall into main categories of direct, two-sided, data, tech performance and interpersonal/social. Bale added: “I think what people really look at now is where there are more people on a network, more value can be created, if you truly leverage one or more of these network effects.

“Those are the products that truly have defensibility, those are the ones that create significant multiples of value for their customers, and therefore also for their investors.”

Pointing to a belief that an answer lies in a more social aspect: personalisation, customisation, the ability to make real world connections or simply play with friends, whilst also utilising networks to allow sharing through private groups, Bale concludes: “There’s definitely an opportunity for innovation, by providing sports fans with a new alternative, a different offering to capture the attention of those that haven’t bet to date.”

Adding: “It’s very much a broad sports fan focused approach, the idea of taking someone who is a casual football fan, or a casual sports fan, on an experience where they are going to enter a pay-to-play game; actually for the first time in many cases when they ‘bet’ for the first time.”

Bruce Bale was speaking at the years Betting on Football Conference at Stamford Bridge, with a presentation entitled “Playing the Game – how to engage and monetise non-betting football fans.”

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