Cmedia’s Oliver Crane explains how the company has turned a traffic generation business model into a successful social casino operation with the launch of the Soda Poker brand.
For anyone having worked in the Spanish or French online gambling markets, Cmedia is a familiar name. For several consecutive years we managed to position ourselves all over the pre-regulation southern European search landscape for almost everything related to gambling with an aggressive acquisition and SEO-based strategy.
In 2011, the high dependency on search engines, a limited number of customers capable of committing to long-term partnerships, government shutdowns and regulations seriously started to limit the growth of the company. It was time for a new model.
The only way forward seemed to either be to join forces with an existing gambling operator and become a sort of acquisition department; or launch a gambling operation of our own. Both options came very close to materialising but it would be a third option, in the form of social gaming, which would capture our attention.
We knew that a successful social operation needed two things: community driven social interaction and a considerable critical mass of player liquidity. We had both. We had been creating communities with play money poker games and had a database of more than a million registrations, and we were literally capturing millions of unique visitors with the free poker websites we were running in all the main markets.
The online gambling industry (including us) was becoming more and more intrigued by social gaming, but there was no real success story or an online gambling operator making it big with a model that back then was limited to games on Facebook and mobile phones. And both were inaccessible and virgin territories for real money gambling and the same applied to us.
The main question was whether, with the thousands of daily active users we could attract through search engine marketing and our network of 1,500 websites, we would be able to create an environment comparable to the million DAU of the successful Facebook based ones, and most importantly if it would be a profitable move.
Twelve months after launching Soda Poker, our first social poker offering, our average lifetime player value is around $75 and reaches $120 in the most developed markets, and our monthly ARPU of $0.55 is very much comparable to similar Facebook games such as Zynga Poker. Our current player base of close to 20,000 daily active users and 80,000 monthly active users is rapidly growing, but we are still only fuelling the project with our own traffic.
And this is where the things are going to get interesting; not only for us but also for the rest of the gambling industry from affiliates to operators. We know gambling regulations and the mass media campaigns that go with them are making the player base a lot more casual. And as more and more social gaming operators appear, more and more revenue share models based on deposits rather than rake should also appear. And the benefits for affiliates will be huge!
Think about it, on a rake model, if a player deposits $100 and loses it all in a just a few hands, there’s not going to be much rake to share, and this is typical behaviour for casual players. We believe social poker, as it is always at the very beginning of a poker player’s lifecycle, is a little like a massive poker school. Players will come and learn poker and just enjoy the game with no fear of dependency or risk, but ultimately anyone who understands online poker will tell you that a considerable share of those players will end up playing for real money. The model is similar to the dot.net strategies gambling operators run with play money software, except now there’s an additional business model and additional revenues to be made.
Having got a taste of both worlds, we see a real opportunity for gambling and social gaming operators to work hand in hand and control the whole player lifecycle, while maximizing revenues and doing what we all do best: providing fun and entertainment online.