Information systems in the gaming industry were originally driven by the finance department. That is where the data that needed processing was, and that is where the significant labor-saving opportunities were. After all, aren’t computers just fancy typewriters, adding machines and filing cabinets? Wasn’t the greatest value to be found in replacing the traditional office machines with better ones? For example, automated payroll systems cut many hours of labor and eliminated many errors simply by quickly calculating the gross pay and taxes, and then quickly printing out (typing) a batch of checks. In fact, as I was coming up in IT, the MIS department (as it was called for many years) reported to the finance department. Today, it is marketing departments that are driving much of the gaming industry’s technology forward. For these departments, computers are not only ideally suited to store and analyze the massive amounts of available data, but they are also the most efficient tools for developing creative messages and presenting them to the world. This is primarily because word processing and graphics programs are more than just a better typewriter and graphic artist’s table, just as air travel is more than just a faster train. Likewise, e-mail and the Internet are more than just faster mail and publishing services. Historically, great leaps in the speed of things provide qualitative changes, making new things possible.
To successfully apply marketing technology requires a Vulcan mind meld between the highly logical Spock (IT guys) and the subjective Dr. McCoy (marketing types)—“And a lot of foolish human emotions. Right, Mr. Spock?”
Voluntary economic transactions are fundamental to capitalism. In the gaming industry, the objective of marketing is to entice customers to voluntarily enter the casino (ideally through the porte cochère) so that properly placed slot machines, table games and attractive, appetizing restaurants can further entice them to voluntarily spend their money. All manner of subjective activity is thrown at this objective, including emotional appeals and enthusiastically offering customers what we expect they will like. It has always come down to providing the right message at the right time to the right people.
Casinos have long been able to collect a plethora of accurate marketing data in the course of doing business with their customers. For example, ratings on both slot machines (usually through the player’s club) and table games, which collected in exchange for bonuses and/or complimentaries, provide the casino with exactly the types of games patrons play, how long they play them, how much they play on them, how well they play, and how often they play. In exchange for credit, players provide casinos with some of their most personal financial information. When customers stay at the hotel, casinos learn if they are Internet users, movie watchers, the type of room they like, how much they spend, what type of food they like, and even if they had a headache and bought aspirin in the gift shop. Kellogg’s would love this kind of profile data on people who buy Mini-Wheats®. The best they can do is to make inferences tied to demographic information from grocery store loyalty cards or from marketing satisfaction surveys. The quality of this data is always questionable.
Realizing the value of their data, large casino operators have spent small fortunes placing this information in various databases—and thousands of man-days analyzing it. The result of much of this analysis has been developing targeted offers to existing customers and communicating those offers through the United States Postal Service with millions of pieces of direct mail each year. This direct mail advertising is supported through more-traditional media such as print and outdoor advertising, radio, and television. Additionally, today many operators have added attractive websites (these are essentially online brochures and video commercials) and have begun collecting e-mail addresses as an alternative to sending offers via snail mail.
These efforts have paid off nicely. According to the Las Vegas Convention and Visitors Authority, Las Vegas gaming revenue has increased from $7.6 billion in 2002 to $10.9 billion at the end of 2007.
The tides are changing, however. Not only database analysis, but also website design and development, e-mail blasts, and sometimes managing thousands of video displays, require lots of technology and therefore, technical skills. Marketing departments’ organizational charts are reflecting the need for these skills. I did a career search of the job openings within the corporate marketing department for two major casino operators and found that two-thirds of them were for what could be considered technical positions. Job titles included database analyst and web designer; both positions required advance skills working with technical tools (e.g., data mining tools and video programming, respectively) in their related fields.
Of course, once the customer has entered a casino’s doors, internal marketing takes over. Video and static displays are everywhere (in some casinos, at every slot machine) announcing events, advertising restaurants, bonus events and sweepstakes. We haven’t mentioned the advertisements while waiting on hold—oh, and I forgot, before you even enter, there is the outdoor marquis. These messages are all temporal. Because the casino has full control over their content and timing, internal messages can be updated on the spot, fully reflecting and adapting to the current situation. In some cases, the displays are updated every few minutes. Examples include announcements when sweepstakes winners are chosen, a congratulatory message when someone with a birthday inserts their player’s card, or an updated value when a bonus amount increases.
So, the marketing department’s challenge becomes managing not only the data about customers, but also the timing and content of each customer-communication method. There is no longer time to wait for the IT department to help. Industry marketing veteran Christa Myers, president of Akamai Strategies puts it this way: “The challenge of casino marketing departments is managing the temporal aspects of the various customer touch points. The message content and shelf-life of a direct mail piece is, of course, different than that of an e-mail, which is different than that of the in-house displays. Direct mail may have a shelf-life of a month. E-mail blasts with an offer might stay in someone’s inbox for a week; an announcement for an event, only a few days. An in-house display, however, may be effective for only a few minutes. How long are customers influenced by an electronic happy birthday wish? I can’t think of another industry that has the opportunity to manage so many customer touch points with such frequency implications.”
So what has happened here? To be successful, the marketing department requires data analysts, data mining experts, programmers and graphic designers who are not just drawing pictures, but who are creating interactive experiences. They must manage communications in multiple time continuums, and the messages must look like they have been offered to an individual customer for the first time. The same data we’ve been collecting for many years now must become the notes that create a symphony of messages coordinated across the new media to entice the customer to come and play.
Bart Lewin has more than 25 years of experience in the Engineering and Information Technology field, holding serveral technical and executive technical management positions. He is currently a technical and management consultant. He can be reached at balewin@mac.com.
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