Featurespace CEO David Excell discusses how online gambling companies can best nurture their customers to help provide their businesses with long-term revenue
The online gambling industry faces a great deal of scrutiny with regards to the regulations it has to comply with across multiple jurisdictions. There are so many different rules and regulations to overcome and work with operationally now that it is often difficult to grow an igaming business.
“Rather than working within the rules developed by regulators, the industry needs to take the lead in developing more responsible methods of managing its players. By being at the forefront and helping to develop these practises, the industry will be in a better position to shape future regulation and ensure a more uniform regulation across multiple jurisdictions,” said David Excell, CEO of Featurespace, a key technology provider to the online gambling industry.
Featurespace was launched in 2005 by David Excell, a PhD student at Cambridge, and William Fitzgerald, his professor of applied statistics. While Excell was researching automated methods of studying human behaviour, the pair became convinced of its potential in the commercial and public spheres. The company grew from there and it now works with a majority of the top-tier gaming operators in Europe, including Betfair and King.com.
Featurespace helps online gambling companies to achieve sustainable gambling, which combines the need for economic profit with social responsibility. “From a commercial point of view, it means encouraging steady and reliable customers with a long-term lifecycle value with a reduction in problematic play and customer self-exclusions,” said Excell.
It also helps companies in the online gaming industry to identify problem gamblers early, enabling them to take remedial action before the situation becomes acute. “Unlike other forms of data analytics that give only a broad assessment of behaviour, this solution can reliably pinpoint individuals and quickly identify sudden shifts in behaviour. Featurespace's platform can be deployed in a wide variety of situations, including fraud prevention and marketing optimisation, maximising the investment into the technology. This makes it cost effective to deploy Featurespace's solution,” said Excell.
The company's unique form of behaviour analytics enables better-informed decisions about individual customers across a wide range of areas, including targeted marketing, detecting fraud and managing risk. These use self-refining, pattern-matching algorithms to predict customer behaviour and value faster and more accurately than alternative approaches. Every single online transaction by every single customer is captured as it happens. New information is constantly added to existing data, sequentially updating beliefs about what each customer will do next and their future preferences.
As a result, online gambling companies have an increasingly accurate profile of each customer. This can be used to understand and predict their likelihood of doing anything from committing fraud or becoming a problem gambler to responding to online marketing. This can trigger immediate intervention, in the case of fraud, help refine and more accurately target marketing offers and generally help online companies offer a more personalised experience to their customers.
“Operators want to recruit and nurture long-term customers who will provide revenue over a long term. They also often want to expand their market and encourage customers who are new to gambling. Problem gamblers do not provide regular and long-term profits; they also do not help the reputation of an industry, which is working hard to prove its respectability and responsibility.
"Operators must ensure that players play within their limit on a regular basis rather than overspending. Deploying a pro-active responsible gambling solution will help operators shape future regulation, rather than having something imposed upon them,” Excell told iNTERGAMINGi. “By being able to identify a problem in its early stages, operators actually help individuals prevent a potential compulsion from becoming a serious addiction,” he added.
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At the moment, all existing controls require the customer to set their own limits or exclusions. For a player to use these features they need to acknowledge that they need help in controlling their gambling activities and know that this functionality exists. Generally, a player will only use this functionality due to some external influence rather than acting independently.
By providing the operator with knowledge about each individual, the operator can predict which customers may be at risk of problem gambling and take appropriate action. This could be anything from restricting marketing communications to offering information on where to go for help, such as web links or phone numbers.
Excell believes that there are many signs that a majority of the industry takes the issue of problem gambling very seriously. “Online companies focused on long-term growth are far more interested in the reliable, regular customer rather than one where the initial spend is high but unsustainable, so it is within their interests to do so.”
He continued: “However, until now there has not been the technology available to enable operators to take early control. Other solutions on the market only identify markers of problem play. These markers are developed by comparing an individual player's current behaviour to all previous players. There are two potential issues with this approach; firstly there is no definition of problem play for the data mining algorithms to learn from and secondly what is a problem for one player may be perfectly normal for another. Featurespace's products identify changes in a customer's behaviour, if these changes are identified as problematic, engagement with the customer is recommended. The customer's behaviour post this engagement is then monitored and then used to refine the models to ensure they are always up-to-date and accurate.”
The company has seen increasing demand for online gamblers, like most online consumers, to have their experience tailored to them as an individual. “Customers want to see more relevant information about tournaments or events that they would be interested in,” said Excell.
He added: “Overtime we anticipate that the immersion of gambling products and other sources of digital entertainment will continue to converge, in particular through mobile and interactive media channels. We are also seeing consumers spending less time infront of the television and more comfortable with making financial transactions online and through their mobile devices. We therefore see the emergence of new gambling products that blur the distinction from traditional sports betting, poker and casino with more traditional games or social gaming.”
