It’s often said that a rising tide lifts all boats, and this may very well be the situation on the ground when PokerStars joins the New Jersey online poker market – a moment that is expected to occur by the end of the year.
The general consensus is that once PokerStars is licensed in New Jersey, PokerStars will put a full blown marketing blitz into operation and ascend to the top of the market.
In addition to PokerStars using their marketing budget to overwhelm their competition, several other factors make this marketing push likely:
· PokerStars is launching roughly a year after their competitors and will need to make up ground in the market;
· PokerStars reputation was damaged (in the general public’s eyes) following Black Friday and they’ll need to do more damage control than the other sites;
· PokerStars competitors haven’t exactly set the world on fire with their marketing efforts in New Jersey and PokerStars may feel the need to clean up the mess;
· and PokerStars has the largest marketing budget of any online poker provider and has historically gone into new markets with guns blazing.
However, as much stock as people are putting into PokerStars ascension to the top of the market, their marketing campaign could also benefit the entire industry.
Over the course of the first few months of online gaming in New Jersey, the operators were pouring quite a bit of money into marketing campaigns. Print, billboard, online, and TV ads were everywhere, as were more innovative campaigns such as partypoker‘s partnership with the Philadelphia 76ers and New Jersey Devils (which begot the Dream Seat Series) and promotions like No-Overlay by Ultimate Poker.
Unfortunately, even with all of this advertising consumer awareness has been severely lacking in New Jersey.
Despite a lot of mainstream press surrounding the passage of the iGaming law in early 2013, the nine-month buildup to launch, and nearly a year of legalized online poker in the state, the majority of New Jersey residents are still unaware online poker (and casino games) are legal in NJ – the actual percentage of New Jersey residents who are unaware of the fact that online poker is legal in the state has been estimated at anywhere from 50% to 90%, depending on who you talk to.
Whatever the actual number is, it’s simply not good enough. The low consumer awareness has led to a smaller than expected market, and therefore, smaller than expected revenue; which has led to budget cuts.
In May, 888 CEO Brian Mattingley told Bloomberg News they were “Absolutely shocked at the slowness of the market,” and indicated the company was shifting marketing dollars from online poker to slot machines. During an interview in August, Mattingley told me that only about 10% of NJ residents are aware online poker is legal.
888 is not the only company cutting back on their online poker advertising.
The COO of the Borgata, Tom Ballance, also indicated to Bloomberg that they would be cutting back on their marketing expenditures, while bwin.party’s Group Director of Poker, Jeffrey Haas, said the company expected the market to be 3-4 times larger than it turned out to be and indicated they needed better education and to reengage with disenfranchised players.
In addition to the current operators reducing their online poker marketing budgets, it’s important to note that Ultimate Gaming has left the market and Betfair has been left in limbo following the closure of Trump Plaza, leaving a major hole in advertising to be filled.
However, I don’t see the reining in of their marketing budgets as a sign that the current operators are giving up on raising awareness. It’s more likely this is simply a strategic retreat.
As Mattingley told Bloomberg News, “The operators have not seen a positive response to their marketing campaigns. We’ve got to think again, the way we market.”
Part of that rethink may very well be to do what tournament poker players with short-stacks have to do; pick their spots to get their money in good.
Competitors may be waiting on PokerStars
So why haven’t partypoker, 888, and the other online operators tried to reinvent and renew their marketing efforts? What are they waiting for?
The answer could very well be, they are waiting for PokerStars.
When PokerStars launches and starts blitzing the New Jersey market with their ad campaigns in an effort to raise the lagging consumer awareness, it will likely benefit the entire industry. PokerStars will certainly help turn around the consumer awareness issues currently plaguing New Jersey, and at the same time, partypoker, WSOP.com, and 888 can reboot their marketing campaigns and for lack of a better term, ride PokerStars’ coattails.
If PokerStars’ marketing efforts increases consumer awareness, it should act as a rising tide for the entire industry – the same can be said of partypoker’s or 888’s marketing efforts as well. The online poker sites in New Jersey will for all intents and purposes be working together to raise consumer awareness.
PokerStars may inform someone they can play online poker in New Jersey (and they are likely going to give PokerStars a look), but if they also see an ad by 888 or partypoker offering some promotion that tickles their fancy they may end up on that site, or it may lead them to Google searching for “legal poker sites in New Jersey.”
Speaking to me at G2E, Jeffrey Haas said he expects PokerStars’ entry into New Jersey to help with consumer awareness and improve the market.
888 CEO Brian Mattingley made similar statements to me back in August, saying, “We compete with PokerStars throughout Europe… they would make all of us work much harder and it would expand the market.”
So while they may fret over the addition of a formidable competitor, this seems to be offset by PokerStars’ ability to help the entire market, and fix a problem (consumer awareness) the other sites have not been able to solve up to this point.
You know, rising tides and all that.