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Customer Computations

The role of artificial intelligence in casino marketing

Customer Computations

Artificial intelligence (AI) has emerged as a transformative technology revolutionizing numerous industries’ marketing efforts. With its ability to analyze vast amounts of data, learn from patterns, and make intelligent decisions, AI is reshaping how businesses connect with customers and optimize their marketing strategies.

As we continue through 2023, the role of AI in marketing continues to expand, enabling marketers to gain deeper insights, deliver personalized experiences, and enhance overall campaign effectiveness. So, what will the impact be on casino marketers?

Today, AI—first introduced as a concept in the 1950s—has gone from theory to a practical and powerful tool. Advancements in computing power and a deluge of data and algorithmic breakthroughs have put AI in the spotlight in the last 12 months, but it has indeed become embedded in our lives. Just ask Alexa or Siri.

Spin Sucks founder and CEO Gini Dietrich says this wave of AI tools feels different than the early social media wave.

“The difference is that many business leaders proclaimed social media was just for the kids and it would never work in a work setting, and they buried their heads,” says Dietrich. “This time around, though, pretty much everyone has at least tested out one of the AI tools if only to see what the fuss is about.”

She shares recent findings of a Muck Rack survey showing that 28 percent of respondents already use AI, and 33 percent plan to explore it. When you look solely at the C-suite, those numbers shift slightly, with 38 percent saying they already use it and 32 percent saying they plan to use it.

Executives are not sticking their heads in the sand this time. They’re fully embracing it, and so should you.

AI and Casino Marketing

A 2018 McKinsey study indicated that of more than 400 use cases, marketing would be the area where AI would create the biggest impact. When it comes to casino marketing, we’re always trying to build a better mousetrap, whether that is emailing our monthly offers rather than snail-mailing them, offering bonuses while in play at the slot machines, or evaluating free play offers with a near-electron-microscope view. When our traditional tools have reached their peak, perhaps AI can give us an advantage.

By using advanced algorithms and machine learning, AI can super-charge our current tool set to give us usable insights into player behavior and preferences, allowing casino marketers to further curate individual experiences for multiple customers. This level of customization can lead to enhanced player experiences and increased revenue.

AI can also analyze social media and other online platforms to stay on top of trends often invisible to the human eye, allowing us to react more quickly to changes in the market. With AI on their side, casino marketers might have the most powerful tool since the start of players’ card programs, and can advance our efforts in customer acquisition and retention.

AI in Customer Acquisition

Using a mix of algorithms, insights and instincts, marketers can develop targeted marketing efforts to engage with prospective customers more efficiently and effectively. Service provider chatbots and those Netflix recommendations you get are everyday examples of how companies currently engage with us using AI.

Amazon utilizes AI-powered recommendation systems that analyze customer browsing and purchase history to suggest relevant products, leading to increased customer acquisition and sales.

And, of course, a simple scroll through your Facebook or Instagram feed will show AI in action again. Meta’s application of the technology allows us to connect with like users, but more importantly, it allows advertisers to reach highly targeted audiences for customer acquisition campaigns.

A similar application also allows marketers to place digital ads in precise locations, optimizing our marketing efforts, media plans and messages for even the most complex acquisition strategies.

AI in Customer Retention

For marketers, the goal is not only to acquire customers but to keep them. By utilizing AI for customer retention, casinos can enhance customer satisfaction, improve loyalty, and reduce churn, ultimately driving long-term profitability and growth. Using the vast amount of data at our fingertips and AI, casino marketers can identify possible churn indicators and proactively intervene before customers choose to leave forever. Virtual assistants and chatbots can provide real-time support (critical in these days of understaffing) and resolve issues promptly.

Moreover, the utilization of AI technologies can enable the delivery of personalized experiences, offers, communications, and even recommendations based on customer preferences. By analyzing customer data and behavior, AI can also deliver personalized advertisements and even alter product offerings to better fit an individual’s preferences.

One of my favorite brands, Sephora, uses a vast collection of data to make individual recommendations based on skin type, preferences and past purchases to increase their share of wallet.

Considerations

AI-powered tools continue to evolve and become more useful. They can be overwhelming in their power but, at the same time, limited in their power. A chatbot cannot market for you. While it can deliver targeted messages and collect useful data, marketers still must make the decisions and create the inputs.

Marketing strategist Mark Shaefer shared highlights from studies from Deloitte, Accenture and others, concluding that between 30 percent and 40 percent of all sales and marketing functions could be replaced by AI in the near term.

“Where will this happen?” he says. “For a clue, look deeply at your business and find the patterns. What tasks are simply patterns of work that are performed over and over? Some examples might include search engine optimization, simple content and content marketing, programmatic email marketing (in which casino marketers are expanding their efforts), copywriting for ads, and social media content and posting.

“Many AI programs can instantly boost creative activities such as graphic design, editing, and even video and podcast production.”

So, while it is not a hard reach to assume AI can take over marketing roles, for now, AI is best used as a junior associate or coordinator, allowing them to take the first pass that is then elevated by a marketer’s touch.

TrustInsights founder and Chief Data Scientist Christopher Penn has shared some great perspectives for marketers. In one of his recent posts, he pointed to simple chatbots:

“Previously, to deploy a large language model in a marketing context like a chatbot on your website, you pretty much had to pay the OpenAI tax and use their APIs if you wanted high-quality output. With the release of (Meta’s) LLaMa and the crazy number of free, open-source models (including some derivatives that are licensed for commercial use), that’s no longer the case. Now, if you have the technical team in place, you can use an open-source model and save yourself a big bucket of money.”

Penn also adds that marketers with access to technical resources that can fine-tune open sources will see massive benefits. “These models are relatively straightforward to fine-tune—not easy, but simple. It’s now even easier to customize them to your company, to your needs, to fulfill specific tasks that your team needs to work on.”

The number of tools to help casino marketing teams become more effective and efficient through AI is overwhelming. It may be wise for all of us to keep an eye on the growing revolution that is artificial intelligence, and it is probably time to assign somebody from your team to experiment with these programs, as AI will make nearly every marketing task simpler, faster, and more targeted to specific customer needs.

As more and more casinos adopt this cutting-edge technology, the competition for customers will undoubtedly increase. The outlook for AI in casino marketing promises to be a game-changer in the industry, offering a more personalized and efficient experience for casinos and customers alike.

Julia Carcamo has held property and corporate leadership positions at medium to large casino companies. She is the president of J Carcamo & Associates marketing consultancy and founder of Casino Marketing Boot Camp. Contact: julia@jcarcamoassociates.com.

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