The Technology and Innovation Challenge

Despite the focus on disruptive innovation and unique consumer-facing solutions in other areas of online activity, there can be little doubt the online gambling industry struggles with innovation.

Crispin Nieboer, currently the temporary head of online at William Hill but previously the director of corporate development and innovation, was the man in charge of launching the company’s incubator William Hill Labs. He says companies should be looking at how upstarts have emerged in other new industries and swiftly stolen huge market shares.

“People are perhaps waking up to the fact that they can’t afford to be complacent any more, with so much disruption happening in other consumer tech markets, and the barriers to entry in regulated gaming not really being that high,” he says.
Nieboer notes that gambling has seen its fair share of industry disruptors – Betfair being perhaps the most obvious example. But the world of technology doesn’t just offer object lessons about the dangers of getting swept aside by new innovative business ideas. It has also opened up social media interaction to an extraordinary degree.

Dominic Hawken, chief technology officer at gaming technology specialists Grand Parade, notes that the behemoths of the online and social media eco-system have not only been investing hugely in R&D and developing coding technologies to enhance their product, but have been sharing the results too. “It’s open source,” he says. “Google Analytics, Bootstrap, Firebase - all our developer led programs that are changing the way we deal with data. Google and the likes of Twitter and Facebook are developing code that is revolutionising the speed at which our systems can communicate and process transactions.”

Hawken suggests it offers the opportunity for all comers to stand on the shoulders of giants. “That kind of innovation is the tipping point,” he says. “We are building tools that leverage the work being done by these big social companies and using it in our sector.”

But innovation is about more than simply having the idea – it is also about how the injection of discipline and simple rules can aid the rejuvenation of a core business as much as the introduction of radical new ideas.

An article last year by Donald Sull, a McKinsey alumnus and senior lecturer at Massachusetts Institute of Technology’s Sloan School of Management, points out that the current widespread fascination with disruption “obscures an important reality”.

“For many established companies, incremental product improvements, advances in existing business models, and moves into adjacent markets remain critical sources of value-creating innovation,” says Sull.

In online gambling the opportunity is opening up for brands to leverage their own customer data to better deliver ever-more personalised betting experiences to the customer. Says Nieboer at William Hill: “As device sizes get smaller - some say the website is already ‘dead’ - we have to use data to provide customers with what they want, with the fewest interactions possible, and use machine learning to make the right recommendations and suggestions, just as Uber is doing for transportation or Spotify is for music.”

William Hill has turned to CRM and data analytics specialists Featurespace to help with its aim of gaining a greater insight into the motivations of its customers. David Excell, co-founder and chief technology officer at the Silicon Fen-based firm, points out that unlike with other online retailers, online gambling companies represent hugely complex environments in terms of the product set available and the randomness of the data collected.

“The analysis can be done in real-time, which is cutting-edge,” he says. “But you don’t always need to make a decision instantaneously. It’s about how you can handle large amounts of data; monitoring huge volumes of data, and being able to process the data, and take the meaning out of it without getting overwhelmed. From that data we can predict what the customer will do in the future.”

Hawken from Grand Parade concurs on the complicated nature of the gambling business, and the need for learning from experience when it comes to handling data. “Betting as a business is really weird,” he says. “It’s fundamentally different to other retail businesses. You can’t apply the logic from elsewhere.”

He points to the work Grand Parade has done recently with Sky Bet on the Sky Sports News website, providing contextual ads embedded within the news-page content. “We worked out the best banners to sit embedded within the content,” says Hawken. “We could see what worked through the clicks. We can see what is working for all the banners, what clicks we are seeing, it was a nice seam to mine,” he says. “We’ve learnt our lessons about content; we react to the latest click. You have the measurement, you can work out in real time what to show them. It’s like a newsroom. It’s all about real-time clicks, optimising every single product and reacting.”

Hawken says he likes Sky Bet’s willingness to test ideas and concepts. “It’s a huge challenge if you can’t measure the results,” he says. “You really should allow your customers to dictate what they want and how they interact with you site. Companies need to be happy to use focus groups.”

His point is echoed by Fintan Costello, co-founder at another digital marketing agency Revenue Engineers, who says that most operators are at this stage still “running blind” when it comes to using their own data. “The biggest problem is getting clean data,” says Costello. “It will never be perfect. Getting anything to a starting point where you can actually use the data is the difficult part. It’s about smart analytics.”

Companies which innovate will reap the rewards from blazing a trail. But the more forward-thinking operators will know one of the inevitable truths about pushing out new ideas: the successful ones will be copied, and quickly. In a presentation to investors given at the end of last year, Betfair – which has recently had some success with its newer product and marketing innovations such as ‘Cash Out’ and ‘Price Rush’ - put a limit of six months for any successful new enhancement before the competition brought out its own copycat product.

Grand Parade

is a digital creative agency specialising in high-tech products, content, design and marketing for the gambling industry

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