Online Poker, Bubbles, Bursts, and Marketing

Ok, so I’ve been saving up some posts that I wanted to talk about but I haven’t gotten around to it. I’ll steal the infamous uber-post format because . . . I’m lazy.

It wasn’t all that long ago that people were predicting the burst of the poker bubble. At the time I was convinced that those people were dead wrong. Most journalists are ignorant of the subject matter that they cover and when you combine that with a tendency to hype non-events in the hopes of selling papers (or page views) then you’ve got good conditions for a lot of misunderstood and misreported information.

According to the story, Party Gaming reporting worse than expected numbers was the beginnings of the death of online poker. Hell, some went so far as to predict that the entire poker bubble would burst. All you need to set this up is for one or two other small confirming pieces of information and, voila, you have a crisis in the making.

Of course, Party Gaming was reporting poorer than expected numbers because they have a lot of internal problems. The whole debacle with their skins was one of the things dragging their numbers down. That combined with the fact that you can’t keep churning out 200% growth forever and the press had a field day predicting the demise of poker.

However, when you took a step back and actually looked at what was going on, the facts told a different story. Growth at Party was healthy as was the growth at every other major site who reported financials. Even those too lazy to read a spreadsheet probably could sense that poker wasn’t taking a dirt nap anytime soon. All one had to do was take a look at that little box most sites have in their lobby telling them how many players are on the site. I mean, some sites were still growing 100%+ per quarter.

Fast forward six months and Excapsa (cough Ultimate Bet) just floated an offering on the London Stock Exchange. PlayTech, the makers of online casino software (for Golden Palace and Empire), just floated on the LSE as well. Party’s more recent earnings reports have been cheered by investors and it seems like every other week a new poker site is sprouting up promising to be the hottest new site out there. Even the World Poker Tour seems to be positioned to have its online poker site revenue take over the money it makes on the television show.

The bubble seems well intact (for the moment).

Of course, the market is crowded and whenever a market gets crowded you see a lot of creative positioning. I’ve been observing this trend over the last year or so and though I’ve made some snarky comments about specific hype generators, I’ve found it to be somewhat interesting. Though, keep in mind, my analysis here is not scientific, informed, or even accurate so make of it what you will.

Along the marketing spectrum for online poker, you have companies like Full Tilt and Bodog on one end and you have Golden Palace on the other. In the middle, you have a lot of other companies ranging from Party to Titan. One has to think that every company has some sort of method to its madness in regards to its marketing plan. That would mean that these companies have chosen to be wherever they are on the spectrum. Now, some may be forced to pick a spot on the spectrum because they can’t compete against another company who has already carved out their position but it is a choice.

One end of the spectrum: Lifestyle Marketing

I think you can certainly fit Full Tilt and Bodog on this end of the spectrum. Everything about their advertising and other marketing is squarely focused on creating an image. Full Tilt focuses a little more on the pros and Bodog seems to go after the kinds of guys you might run into at a ultra-hot nightclub in Hollywood. Or, as I like to think of it, Bodog has a higher tribal tattoo ratio than any other online poker site.

The whole idea is like the marketing behind cigarettes, booze, and a zillion other products; make you associate certain images with being their customer. If I drink this sort of booze I’ll be really popular and have hot models hanging on my elbow. If I play on Full Tilt I’m circulating in the world of professional gamblers. If I play on Bodog I’m that trashy-rich guy who jets around the world, rides a Harley, doesn’t shave unless he wants to, and gets into all of the hottest nightclubs.

The other end of the spectrum: Gorilla Marketing

These are the guys I certainly have fun making fun of. buys grilled cheese sandwiches with the Virgin Mary on them. . . . well, they have crazy in the name. I guess that says a lot. These guys will do absolutely anything to get cheap (and sometimes, not-so-cheap) marketing. In my experience, these guys don’t tend to last. Does anybody ever admit to buying stuff from Crazy Eddie’s Discount Electronics Emporium? Don’t get me wrong, I’m sure they have decent cardrooms but would you wear a t-shirt with on it if you weren’t getting paid or doing it as a joke?

In the middle of the spectrum: Joe Sixpack

PartyPoker and PokerStars are both in the middle of the spectrum but this being a spectrum they tend to gravitate towards different ends. Party’s strategy seems a little confusing to me. One series of commercials features big money prizes people can win (time on a private jet, Porsches, etc) but their other ads feature blow-up sex dolls. They seem to have a slight tinge of the Gorilla Marketing end of the spectrum in that they’ll do anything. Actually, it seems most likely they don’t have a real overall strategy. They’re just sort of winging it and going with whatever has the best response rates. My guess is that they’re a victim of their own success. What got them to where they are is not what can take them to the next level and continue growing the company and they haven’t quite figured out what their next move is.

PokerStars, on the other hand, gravitates a little more towards the Lifestyle Marketing end of the spectrum. They feature Chris Moneymaker and Greg Raymer in their advertising and sort of sell the dream that anybody can become the next poker legend. But they fall short of the Lifestyle Marketing end of the spectrum due to their inability (or lack of desire) to really polish their message. I remember some of the early Chris Moneymaker commercials where I was thoroughly convinced that the entire shooting budget was less than $100. I just had this image in my mind of some PokerStars marketing guys running around with a cheapo DV camera filming pieces with Moneymaker until someone noticed and chased them off.

Now on to some random stuff . . .

CNN Money suggests that becoming a casino general manager is a lucrative gig. Yeah, try telling that one to your folks. (one of my favorite sites) has figured out that you can make a buttload of money being an affiliate for online poker sites. Fark will be sponsoring a freeroll on PartyPoker and the Farker’s have their own little thread going about it.

PartyPoker announced that they were aquiring the assets of Empire Poker and launched a newly designed client software update. I don’t think the Empire news comes as much of a surprise. Empire has been trying every trick in the book not to go under since Party pulled the skins off their network and Party has had a chance to steal everyone from Empire that they could. First Party pulled the “Hey we have rakeback [what is rakeback?] too” trick and then once they consolidated accounts they pulled the individual trackers and killed off the rakeback. Now they know who the rakeback whores are and feel that they have them trapped between a rock and a hard place. Long-term, I think these strongarm sort of tactics will blow-up in their face but for the moment it looks like things are working out as planned.

The upgrade over at Party is a move in the right direction though. I like it though I’m still trying to get used to it. I find myself not knowing where certain tools are and spending a lot more time than usual trying to do things that were once burned into my motor-reflexes. I’m curious as to whether or not this causes a hit in the rake and juice departments as it takes people a while to get used to the new system.

One thing they still didn’t fix is having to click three or four times on an action button to bet, raise or fold. Boooo.

I won’t list them out (because there’s no need to) but it looks like the over/under on stories per week saying that poker is popular on college campuses is 5.

After prematurely giving Bodog props for being more of a Lifestyle Marketing sort of company, this week they announced that they’ll be branding some airplanes with their logo and shooting a reality television show down in Costa Rica. Maybe they’ll launch next.

The World Federation of Poker announced this week that they want to be the unified organization to represent the poker community. With the other 17 or so similar organizations with exactly the same mission statement, we’re going to need an organization to organize all of the organizations.

Andy Beal finally walked away from Vegas a winner. Now the big question is whether or not this was all part of The Corporation’s plan to get him to play for even higher stakes.

Some asshat lawmakers are trying to make online poker illegal (uh, it already is). The link is to FlipChip’s excellent analysis of the situation.

Speaking of asshats, I ran across this gem the other day. Jeff “Panites in a Bunch” Simpson, writing for the Poker Gazette, laments that his state of Nevada is not doing enough to arrest and prosecute people who play online poker. Jeff says:

But while regulators fiddle, these offshore scofflaws thumb their noses at Nevada, raking in big bucks and making lawbreakers out of our citizens.

Hate to break it to ya, Jeffy but you live in Nevada. Not only are many of your citizens already lawbreakers but there’s this town called Las Vegas which has been nicknamed Sin City. Playing poker online is probably the least of Nevada’s law enforcement issues. Take a chill pill.

Also in cheating news: MissT74 (I like her so much more than MissT73) reports on the JJProdigy scandal. Seems JJ played as two different players during the tournament and one of his online personas monied for $140,000. Well, until he mentioned it to some folks and got caught on a message board.

And what uber-post would be complete without the obligatory photo that has nothing to do with the post?

How to spot a rich guy

Bill Rini
Bill Rini is currently the Head of Online Poker for WSOP. He has been working in the online poker industry since 2004 and has held management roles at Full Tilt Poker and PartyPoker.