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The Case for Casinos to Sell Advertising Part 2

by Matthew Olden, President, Context Networks, Inc.

In today’s extremely competitive landscape, casinos are under pressure for new revenues, to grow the bottom line, and to sustain that growth. In Part 1 of this series, I examined how digital advertising has become one of the fastest growing and most lucrative industries in the world today with an estimated $223.74 billion spent worldwide in 2017.  I also discussed the rampant problem with fraud with which advertisers have had to contend; nearly 50% of all ad traffic is now generated by bots, defrauding advertisers of their money, and reducing publisher revenue. I provided three reasons why there is presently no substantive digital advertising within the global casino market; a lack of technology, a lack of skilled casino personnel, and lack of scale.

The solution to each of these prohibitive problems is a programmatic ecosystem delivered as a Platform-as-a-Service (PaaS) which creates the necessary scale for advertisers and provides the real-time bidding engine for casinos to ‘sell’ digital space.  The service also provides a real-time advertising rules engine to permit casinos to filter permissible ads for their properties and the service provides offer presentment and redemption via international intermediaries.

This service utilizes a private, permissioned blockchain for immutable smart contracts and digital tokens for all payments, exchanges, incentives, and fees in the ecosystem.  It is a turn-key, cloud-based service for the easiest implementation with the least impact upon casino operation. Just what service is this you ask? The Contextual Promotions Media (CPM) Network by Context Networks, Inc.

The CPM Network includes:

  1. an advertising exchange;
  2. a real-time bidding engine;
  3. a real-time advertising rules engine;
  4. ShARepon™ (shareable, augmented reality digital coupons);
  5. an interactive, tournament-based, promotional casino marketing game with premise-based and mobile application touchpoints;
  6. casino marketing and promotion services;
  7. digital crypto tokens for payments;
  8. a dedicated, private, permissioned blockchain.

Benefits of the CPM Network

Publishers have instant access to all high-quality advertiser demand from the CPM Network with low cost barriers to participation and benefit from instant payment settlements on blockchain and transparent advertising demand within the ecosystem.

Advertisers are protected from non-human, bot-fraud traffic and can ensure brand safety.  By tamper-proof storing of all smart contracts and event logs inside a blockchain and secured storage, it is impossible to use corruption schemes within ad buying. In the CPM Network, advertiser stakeholders will be able to verify directly how ad budgets are spent and perform in-depth audits of third parties as needed.

Advertisers incentivize Users to act using compensation mechanics and are able to offer variated compensation schemes for clicks, lead generation, mobile application installations, completed ad video views, sharing posts within social networks, and other actions.

With an ecosystem built on blockchain, machine learning, and artificial intelligence, and access to myriad sources of data, the ability of Context Networks to offer analytics services with deep insights is truly remarkable.

The Technology

Blockchain technology is rapidly changing the way applications are built and function on the Internet.  With blockchain smart contracts technology the CPM Network enforces payments in real-time without paper agreements; without the delays of established accounting periods and bank transfer time frames from paper-based accounting systems.

The CPM Network’s blockchain provides for security and traceability of all transactions. Every party involved in an ad interaction has access to all relevant information about other parties involved in that interaction and their associated expenses.

The CPM Network ecosystem for digital advertising is built based on Hedera hashgraph platform Fabric, with a permissioned and private blockchain, and smart contracts with state channels and secure decentralized data storage to create a versatile and robust infrastructure that is reliable under a high ad transaction load.

Opportunities for Casinos

As stated earlier, casinos are facing significant competition in the gaming market. By implementing the CPM Network, casinos will attain new value propositions for key problems of improving hold, increasing visits and lengthening stay, increasing loyalty program participation, and fulfilling their Player’s Club patrons’ sense of entitlement with reinvestment offers other than incrementally greater amounts of “free play”.

The CPM Network provides an integrated and targeted marketing solution purpose-built for the gaming industry. Through an efficient solution that wastes nothing on unqualified consumers it enables advertisers to persuade consumers in the best position to buy.  “Hidden” customers will finally participate in casino loyalty programs. Patrons will discover new reasons to stay a bit longer and learn new reasons to return more frequently.

Casinos can advertise their amenities and services on ATMs and kiosks to; train employees; reward customer service; promote amenities; teach customers how to play; increase frequency of visit; lengthen stay; improve hold; promote entertainment; and manage hotel inventory.  Vendors can use the CPM Network to; build sales at casinos; take advantage of customer traffic increases during special events or holidays; introduce new brands; and test offers.

Potential Revenue

Casinos are considered Publishers in the Network.   The CPM Network also uses an industry standard cost-per-mille (CPM) rate model and video format over static format.  The Average CPM rates are as follows: $5.245 for video, $4.080 for interstitials, and $1.065 for banners.

Context Networks’ Use Cases for casinos include: table signage; digital signage networks; hospitality televisions; slot machines; promotional kiosks; digital restaurant and bar table tents; websites; interactive augmented reality printed content such as direct mail campaigns, TITO tickets, ATM receipts, and kiosk tickets; and mobile applications including resort concierge apps, online/social games, and interactive augmented reality digital content.

It may help at this point to see the potential traffic as it would relate to a single Hotel and Casino location with 1,400 slot machines; two (2) ATMs; and 10 cash advance kiosks.  This entity also has an average of 150,000 online/social gaming Users per hour. Ignoring for now any advertising in the hotel TVs, digital signage network, TVs at table games, BINGO, or bars & lounges.

With always-on, full-time utilization of 1,400 slot machines the CPM Network can deliver 36,817,200 ads per year, if only one (1) ad is delivered every 20 minutes, per slot machine.  Applying a conservative usage factor of just 20%, that would result in 7,363,440 impressions on slot machine service windows.

Using the average of 150,000 Users online per hour on the online gaming app and the CPM Network delivering five (5) ads per hour, per User to attain 6,574,500,000 annual impressions of video, interstitial, and banner advertisements.

ATMs and cash advance kiosks had a monthly average of 1,561 transactions per unit, or 224,736 transactions per year when extrapolated for annual estimates.  Context Networks can deliver one video advertisement to ATMs each transaction and two (2) video advertisements to cash advance kiosks per transaction. Based upon those annual estimates the CPM Network can deliver 3,821,328 total impressions per year to these devices.

So, like we teased in the closing of the first article, I have shown how a reasonably sized casino with online gaming could earn some very respectable revenues.  For additional use cases and for more revenue details, visit www.contextnetworks.net.