How to Work with KPIs: Tips for Online Casino Owners

Each business structure has unique indicators. They differ significantly depending on the format of the commercial project, the direction of the company’s activities, and many other nuances.

About the Concept

This is a set of the most important metrics for an enterprise's productivity. Quantitatively, this data reflects the quality and success of the chosen policy. It also identifies points that require improvement, optimisation, or complete restructuring.

To solve various operational and commercial problems, it is necessary to work with certain groups of KPIs. Still, ultimately, the assessment of these parameters should be reduced to identifying the most profitable and cost-effective investment programs.

The term was first mentioned in 1932 in the “System of Indicators” management concept by the French scientist Jacques Malo. Later, this concept was used by such outstanding economists and publicists as Stuart Stern, Keith Roberts, and Lorenz Meisel.

Currently, KPIs represent an integral element of the overall balanced scorecard system in any business. These metrics are used to assess the complex activities of a brand and make managerial decisions (lending, loans, and participation in various investment programs).

Performance Characteristics in the Online Casino Segment

In the iGaming industry, working with such parameters allows entrepreneurs to solve a whole range of administrative, financial, and strategic tasks:

The Startup’s Overall Productivity Assessment

Working with the most basic set of metrics can help with:

• the calculation of expenses for launching and promoting the website;
• the performance audit (of hired employees);
• ROI analysis.

Strategic Planning

KPIs allow operators to set clear and measurable goals, dividing the global task into understandable and simple ones.

Casino owners can create various plans, specifying the numbers for profitability, payback, and conversion in 6 months or more. Real data is then compared with the strategic one. This makes it possible to evaluate the correctness of the chosen plan and adjust it for further work.

Staff Motivation

The parameter can be aimed at evaluating the performance of hired employees and their competence. Based on the received information, entrepreneurs make rational decisions about bonuses, promotions, and other incentives for their teams.

Development of a Marketing Policy

The indicator’s use is most often considered in the context of online casino advertising.

The system of this metric allows operators to analyse many marketing areas, including:

• the total number of transitions to the website and the frequency of visits during certain periods;
• cost of advertisement click;
• expenses for attracting one customer, etc.

More Data on Financial Indicators in the Gambling Niche

They contribute to the rational assessment of a startup and are used both internally by the company (for example, to provide reports to executives and investors) and for interaction with external organisations, including regulators and business partners.

Basic types of such parameters:

Gross Gaming Revenue (GGR)

This is a reflection of the establishment's operating income, which is based on the info about all bets minus paid rewards.

The metric helps to evaluate:

• frequency of visits to the portal with slots;
• limits preferred by users;
• the most popular products;
• ratings of games by volatility level;
• effectiveness of bonus programs.

GGR is an important criterion for predicting tax rates. In most jurisdictions, casino owners are required to pay turnover fees. This practice is widespread in Malta, Romania, Denmark, South Africa, and other regions where gambling is legal.

Gross proceeds may vary from month to month since they are subject to seasonality. According to statistics, in cold weather, users spend more time on gaming sites than in summer.

Net Gaming Revenue (NGR)

The indicator reflects the total profit of the establishment, taking into account several expenses:

• commissions established by the regulator;
• royalties to software vendors and content developers;
• rent;
• tax deductions and staff salaries;
• settlements for affiliate programs;
• fees to financial service providers;
• commissions for using hosting;
• payment of bonuses and coverage of other operating costs.

After deducting all expenses, NGR gives an idea of available assets left in the hands of entrepreneurs. This is a convenient tool for express analysis of the effectiveness of all internal processes of the platform.

Knowing the amount of net revenue, businessmen can additionally calculate:

• the difference between gross income and costs of project management (the higher the figure, the better);
• the volume of the brand’s total financial turnover (an increase in the index indicates excessive spending on encouraging players, and a decrease shows a correct bonus policy).

Return on Investment (ROI)

This is an effective and reliable way to evaluate the speed and the volume of the recovered funds spent on the launch and promotion of a digital casino.

The metric is calculated using the following formula:

The difference between GGR and investment capital.

A value above zero to 100% (for example, 0.97 or 96%) means that the business operates at a loss.

When calculating this parameter, the term “investment capital” means:

• all one-time financial injections, such as platform acquisition or creation of a website design;
• monthly wages;
• software rental.

The ROI indicator is necessarily included in the start-up business plan. This allows entrepreneurs to predict the development of the project several years in advance, and later compare the expected indicator with the actual result.

Tip for working with financial metrics: any of the above-mentioned tools are best used over time. The optimal option is when over a long period (from 6 months) the income of the firm grows, and the costs of daily operating processes are reduced.

Effective Marketing KPIs

They are used to form the initial promotion strategy and adjust it after the iGaming portal’s launch.

In the entertainment industry, there are s7 main advertising indicators:

Traffic

Using KPIs, it is possible to evaluate the attendance level, the number of views of individual pages, and other aspects of user activity.

Most often, specialists focus on the Click-Through-Rate parameter.

It is calculated using the formula:

The ratio between the number of times that an ad has been displayed and clicks on it.

Customer Behaviour

To assess the audience’s activity, the following metrics are used:

• Time Spent on Site (spent by the gambler on the platform);
• Pages per Visit (average number of browsed tabs).

They reflect the level of the client’s interest in the products presented on the platform.

Conversion

The index allows business owners to identify the ratio of players who performed a certain task to the total number of users for a selected period. Entrepreneurs can configure the tool to view reports for a day, week, or month.

Examples of targeted actions on the gaming site:

• registration on the resource;
• initial deposition of funds;
• launch of a slot;
• set of progress points, etc.

Each company may have individual requirements for calculating conversion but the main rule is the same for all market participants: the higher the indicator, the better the entire advertising program works.

Price of a Visit

To calculate the parameter as accurately as possible, the following data is used:

• Cost per View;
• Cost per Click;
• Cost per Lead;
• Cost per Acquisition.

The last value best reflects the quality of the website’s advertising strategy and shows how many clients not only visited the casino and filled out the registration form but also made an initial deposit.

Average Revenue Per Client

To calculate the indicator, it is necessary to apply this formula:

Total income of the establishment for the selected period/the number of active users for the same interval.

The higher the index, the better the customer retention policy.

Return on Investment

It demonstrates the rate of restored cash balance in relation to the advertising strategy used.

To calculate the metric, it is necessary to pay attention to:

The difference between the brand’s income and the marketing budget/total investment in business promotion.

ROMI above 1 or 100% means that the marketing and retention program is performing reasonably well. If the value is equal to 100%, ads are currently operating at net zero. A value less than that means the strategy is unprofitable.

To improve the indicator, project owners can:

• apply various optimisation programs;
• completely change the current tactics of working with clients;
• divide the advertising budget into promising and “weak” channels;
• attract additional investments.

Repeat Visits

To assess the activity of regular customers, the following tools and services are used:

1. Return Visitor Ratio. It shows the level of interest in the offered entertainment. A low parameter indicates that there is an insufficient selection of options on the platform. In the iGaming segment, the same figure reflects the audience’s reaction to seasonal promotions and new products.
2. Lifetime Value. It means the total profit of the firm for the entire period of activity of players. The task of operators who want to get a good level of user loyalty is to achieve the highest possible LTV value.
3. Churn Rate. The index reflects the number of verified clients who, for some reason, stopped visiting the establishment and placing bets. A sharp increase in the metric shows that the marketing strategy needs to be adjusted and a retention program must be well-developed.

The Best Way to Calculate Advertising KPIs

The Google Analytics program can be considered the most convenient and effective option for entrepreneurs. This is a powerful tool that makes it possible to track basic promotion parameters for free in real-time.

Features and functionality of the service:

• processing of primary data, such as the number of clicks, unique casino visitors, duration of sessions, etc.;
• calculation of the platform’s conversion rate;
• assessment of the cost of attracting one player;
• forecasting the payback time of a marketing program.

The tool allows operators to generate and store hundreds of reports in a convenient form (tables or visual charts).

The Main Things about KPIs in the Gambling Niche

Aspects that are worth remembering about such metrics:

• Based on financial and marketing parameters, the most winning promotion strategy can be created. These figures help to predict the state of the project over long distances and quickly respond to any market changes.
• Advertising KPIs promote the fastest return on investment. Entrepreneurs only need to analyse the main indicators for the selected period and adjust the current engagement program in accordance with the specified forecasts.
• Google Analytics is one of the most popular tools for working with marketing metrics. This is a free service that can take into account basic figures in real-time and visualise the obtained data in a convenient format.

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