How to demystify big data in iGaming – setting the right KPIs for success
Daniela Castillo – iGaming Business Magazine – May/June 2013
Terms such as SMART objectives and SMART KPIs have become a part of our day-to-day vocabulary in the iGaming world. To get from where we are now to where we want to be in future, we need to have a plan. We’ve all heard it before, failing to plan is planning to fail.
Many affiliates and operators alike would start off the process by identifying Key Performance Indicators (KPIs) that would eventually help to determine success or otherwise at the end of a specific period. Such KPIs can revolve around different metrics, such as number of players acquired, Net Gaming Revenue (NGR), number of games or sessions played, daily average revenue per user (ARPU), average player days and churn.
Such metrics can be quite easily obtained, however others that are more elaborate, such as estimating player lifetime value and segmenting the player or affiliate database on different dimensions, can prove to be impossible to obtain.
The problem: big data
The barrier to this could be data itself. Within gaming companies, it is quite normal for databases to grow by millions of rows every day due to the large number of transactions effected every second. Managing and processing this data within a tolerable elapsed time is becoming more and more difficult.
Additionally, either as a company expands or as it offers a wider product portfolio, additional systems are brought on board, creating disparate data sets that just make it harder and more time consuming to obtain consolidated metrics. Accessing the same metrics from different systems doesn’t necessarily mean that the metrics will match – it’s a common occurrence to find significant data discrepancies that result in confusion and distrust in the information obtained.
How does one go about this? The answers to the questions below should provide some initial guidance.
What metrics do you need?
Firstly, you will need to think carefully about the kind of KPIs that can lead to competitive advantage. Simpler metrics such as clicks, visits, daily revenue, and new players acquired are still important. However, relying on such metrics alone leads to a tendency to take a short-term view of performance data and to optimise quickly on these metrics, at the peril of ignoring more powerful ones.
The shift is now towards more in-depth, predictive analysis that can for example calculate customer lifetime value based on a few hours’ or days’ worth of data. Such metrics provide you with agility – and with the possibility of stopping or changing a campaign only a few days after launch, rather than having to wait until the end of a campaign to have all the results in hand.
The key is to evaluate the likely benefits that such agility will bring about. Is it going to put you one step ahead of competition? Is it going to enable you to deliver the right communications, bonuses and promotions to the right players at the right time?
The good news is that your current systems should already contain the needed data for such an analysis, the next step would be leveraging the current data in a sustainable way to extract the needed information.
Who needs access to metrics?
This depends very much on the centralisation or otherwise of business intelligence functions. If non-technical business users are to be empowered to make decisions based on the data available, then some form of self-service analytics will have to be in place to allow them to explore the data on their own and slice and dice the data by different dimensions.
As an example, providing the marketing team with needed analytics, means that they are able to easily identify the customers that are prime candidates for cross-selling into other products, they can analyse the return on investment of marketing campaigns or understand the promotions or bonuses that best induce the desired behaviours within different player segments.
If a more centralised structure is adopted, whereby a central team, such as BI, is the main reporting custodian, then a number of simplified, standard dashboards reflecting key metrics could be created to allow non-technical users and senior managers to keep track of KPIs and to reduce unnecessary burden from the central team.
Frequency of access to KPIs will also need to be agreed as certain business critical metrics will need to be accessed on a daily or real-time basis, whereas others can be available on a weekly or monthly basis.
The way forward
Once you have obtained the answers to the above questions and identified your requirements, the next step is to understand how you can achieve the required information. If only minor changes are required or if budgets are limited, an in-house solution or an open source system could be considered. If more fundamental changes are needed, this might require outsourcing the solution externally to help with such development.
In a time where the only constant is change, ensuring powerful and strategic decision making will be key. Effectively leveraging the growing amounts of data in your company can mean the difference between success and failure. You have an opportunity to find insights in new and emerging types of data and content, to make your business more agile, and to answer questions that were previously considered beyond your reach. Will you risk saying no?