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The Case for Casinos to Sell Advertising

Native Advertising

New market provider sees 100s millions in revenue potential

by Matthew Olden, President, Context Networks, Inc.

Digital advertising has become one of the fastest growing and most lucrative industries in the world today.  Revenue from advertising is absolutely incredible.  In 2017, an estimated $223.74 billion was spent worldwide on digital advertising according to eMarketer.com.  The mobile ads segment is expected to grow to $61.26 billion in 2018, and $73.30 billion in 2019.  Video-based mediums of communication will continue to adopt native ads into their business models.  The Interactive Advertising Bureau (IAB) predicts native ads will drive 74% of all ad revenue by 2021.

Nearly 50% of all ad traffic is generated by bots; defrauding advertisers of their money and reducing publisher revenue.  Disruptive technological advances like blockchain smart contracts are allowing transactional information to be stored and distributed, but not changed or copied.  Blockchain brings a high level of security to advertising transactions and negates very costly middle men.  This immutable transparency of blockchain eliminates the need for service people while creating a direct connection between consumers and businesses.  Blockchain will severely reduce bot fraud while improving publisher revenues and advertiser efficiencies.

Today, there is no substantive digital advertising within the global casino market.  The global gaming market has been valued at $97.80 billion and is expected to experience remarkable growth spurred by technological proliferation and innovation in both hardware and software.  Rising shifts from physical games to online games has led the industry to focus on hardware compatibility and efficiency.

Some of the technological proliferation and innovation should also come from native advertising delivered across myriad digital devices present in every casino.  That will drive millions of dollars in new revenue from entirely new sources to allow casinos to grow even better bottom lines.

What is Native Advertising?

na·tive ad·ver·tis·ing

n. Native advertising is a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed.

Form + Function = Native Advertising

Native ads match the visual design of the experience they live within and look and feel like natural content.  Native ads behave consistently with the native user experience and function just like natural content.  The Forbes Insights and Sharethrough Research teams found native ads are 25% more visible to people,  97% of mobile media buyers reported native ads were very effective for branding goals, and native ads registered an 18% higher lift in purchases.

For casino resorts many opportunities exist today for native advertising; table games, digital signage, hospitality TVs, slot machines, promotional kiosks, ATMs, cash advance kiosks, cage windows, restaurant and bar digital table tents, websites, mobile gaming, and mobile concierge applications.

To maximize efficacy of advertising within casinos the following integrations should strongly be considered as they increase the context for the ad bid and deliver the most native advertisement experience for viewers:

  • Video and still image digital display advertising
  • Coupon and Offer redemption
  • Augmented Reality
  • Location services such as beacons, GPS, and Wi-Fi
  • Facial Recognition
  • Interactive Direct Mail
  • Contextual data from casino systems

The question is often asked, “Why Haven’t Casinos Done This Yet?”  The answer is three-fold.  Primarily, it is a lack of technology, secondarily,  a lack of skilled casino personnel versed in selling advertising, and thirdly, the lack of scale to entice substantial advertisers.

The technology required must aggregate a very large quantity of networked digital display devices; possess audience measurement capabilities; offer interactivity; include real-time bidding; and proof of play.  Digital inventories will be in constant and rapid flux.  These are not the systems or products which the renowned casino systems companies develop or provide.

The personnel required must be able to account for vast, ever-changing inventories and audiences; operate bidding auctions; and manage AR & AP for thousands of local, regional, national, and international advertisers.  Most casinos simply do not staff this type of resource in their marketing departments.

Consumer packaged goods advertisers prefer not to have 100s or 1,000s of individual casino contracts and advertise with disparate casino networks.  They want to expend the least effort for the greatest results so the scale of the advertising exchange’s reach is a significant concern.  Casinos, even the conglomerate casino companies, simply do not have this scale on their own.

What is the answer then?  A programmatic ecosystem delivered as a Platform-as-a-Service (PaaS).  Such a service creates the necessary scale for advertisers and provides the real-time bidding engine for casinos to ‘sell’ digital space.  The service should also provide a real-time advertising rules engine to permit casinos to filter permissible ads for their properties.  The service should also provide offer presentment and redemption via international intermediaries.

Any service should also utilize a private, permissioned blockchain for immutable smart contracts and digital tokens for all payments, exchanges, incentives, and fees in the ecosystem.  Lastly, it should be a turn-key, cloud-based service for the easiest implementation with the least impact upon casino operations.

Stay tuned for the next post which will describe the launch of the casino industry’s first-ever, programmatic, native advertising ecosystem.  See how a single casino site enjoys $37 million in new revenue, or estimate your own organization’s revenue potential.

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