Canadian Gaming Summit: Rivalry building brand equity and loyalty through marketing and internet culture

June 28, 2023 2:22 PM
Photo: CDC Gaming Reports
  • Mark Keast, CDC Gaming Reports
June 28, 2023 2:22 PM
  • Mark Keast, CDC Gaming Reports

Any igaming operator aimed squarely at the Gen Z crowd was going to do business differently.

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These days, a lot of the chatter in Ontario’s regulated igaming space concerns the sheer volume of ads and the possibility that the provincial regulator will soon impose restrictions on the use of celebrities in igaming ads.

A few weeks ago at the RBC Canadian Open, theScore Bet Senior Vice President of Content and Marketing Aubrey Levy commented on the need for more creative experiential marketing in the province, where a lot of operators care mostly about volume when it comes to messaging.

“There’s been a pretty low bar from what I’ve seen, how operators have been showing up [in the province],” Levy said. “Not all operators care about showing up in unique ways. We were never going to market the way they do.” TheScore Bet, for example, built an experiential Par 3 along one of the fairways at Oakdale Golf and Country Club in Toronto for fans to play on.

That’s what made a panel discussion by Rivalry CEO and co-founder Steven Salz at the recent Canadian Gaming Summit in Toronto interesting. After a year and with 45+ licensed operators and more coming, the rubber will start to hit the road more in how operators market in the deep grass, all to acquire customers more profitably. The market is starting to settle; some operators won’t survive and others will merge.

One of the advantages Rivalry, a Toronto-based sports-betting, esports, and entertainment company, has is they all but own the Millennial and Gen Z market (97 percent of their active customers, 1.5 million registrations globally, over 80 percent of their customers under the age of 30). In Q1 2023, the company’s betting handle was $120.2 million, a 199 percent year-over-year jump and a company record.

A lot of sportsbooks get caught up in big-market budget limbo tied to incessant bonusing, which they can’t advertise in Ontario. Salz said Rivalry reduced their marketing spend five percent year over year, resulting in betting handle, revenue, and gross profit all up by triple-digit percentages and a doubling of registrations.

Salz spoke about how Rivalry is leveraging content, creative, and influencers to differentiate themselves in the market.

“The way that retention and acquisition is historically done in this industry is it’s driven by bonuses and bonus promotion,” Salz said. “The sports-betting industry has a potential problem. People are habitually transient; they go from app to app. The average customer will have two to three different sports-betting apps.

“Our view is if the customer is coming for the latest bonus and if the only way you’re transitioning people relies on who has the latest and greatest best offer and then the only way to retain them is to be continuously feeding them essentially subsidies so they continue to use your product, what’s the value of what you have?”

Potentially, not a lot, Salz said.

“The problem with constantly feeding a customer a subsidy to use your product is it never stops,” he said. “It’s not super scalable.”

Giving them free money, as Salz says, doesn’t create customers who deliver “true operating leverage from an acquisition and retention perspective.”

The objective for Rivalry is to provide real value for their customers, a connection among product differentiation, brand equity, and marketing.

Rivalry customers demand this kind of experience that brings them in and retains them and it’s tough to argue with the numbers the company has been releasing so far.

Salz says that every available metric tells them they’re the most engaged brand globally in esports. Sixty percent of their business is sportsbook, 40 percent casino. Within that 60 percent, 90 percent of total wagers in any given month is typically on esports. Esports is therefore a key access point to under-30 consumers.

Salz spelled out specific Rivalry promotions that are youth-oriented, organic social-media-fueled, and entertaining, and result in viral word-of-mouth marketing, which he said is solidifying long-term engagement with users.

Those campaigns don’t involve big-money marketing spends, including the use of celebrities, seen elsewhere with other operators. The model for them in terms of marketing success with young people is Red Bull and how they connect products with brands and marketing to build a business that has scale. Red Bull has built a marketing strategy around an adrenaline product, not just an energy drink that has sugar and caffeine, and if an athlete signs a contract with Red Bull, it brings a high level of resonance in that market, which is unique.

Another example Salz offered the audience was Liquid Death. It’s literally just water in a can, as he said, just a few years old, but a billion-dollar brand doing hundreds of millions of dollars in sales. “They made water cool.”

Liquid Death has wrapped creative marketing around the product to dominate the under-30 demographic, thus connecting brand equity with entertainment and the consumer experience. That is Rivalry’s focus on the igaming front.

“They say they make entertainment, not marketing, which is something we really like,” he said. “That’s a nice way to distill, conceptually, what needs to be done for the under-30 consumer.

We think that building true entertainment, delivering actual value, rather than just slapping on a logo or giving them a bonus, is a way to create something that has actual intrinsic value.”

The “Mad Men”-style old-school marketing, paying a celebrity to read a script about a product, is on the way out, Salz argued. It doesn’t build true fandom for what you’re doing.

“A logo can only go in so many places and do so many things. You need to introduce something on social media that connects to what you’re doing. If you post something funny on social media, customers go to the website, and nothing there feels similar, it doesn’t do anything for you.”

Salz acknowledged that they’re noticing other operators starting to implement longer-term marketing strategies.