Harrah’s Entertainment, well known for its groundbreaking approach to mass customer acquisition and retention, is apparently out in front when it comes to forging marketing partnerships as well.
Recently, the Las Vegas-based No. 3 player in the casino industry, unveiled a national sweepstakes in partnership with Coca-Cola (KO: news, chart, profile) as it expands its relationship with the beverage giant. The effort, a drink-cup peel-and-win game similar to those found at fast-food outlets, is part of a “Treasure Hunt” tied to Harrah’s (HET: news, chart, profile) “Total Rewards” frequent customer program.
Lucrative revenue source
The amount of money involved was not revealed and is by all accounts not large. But the deal — and others like it — represent a new and potentially lucrative source of revenue that has largely eluded the gambling industry thus far. In stark contrast to other entertainment marketers including amusement parks, professional sports, even movies and concerts, casinos are just beginning to explore alternative sponsorship and promotional possibilities.
John Dluzak, vice president of strategic alliances and the company’s point man in this brave new world, says the idea is to raise brand awareness, attract new customers and cultivate customer loyalty — and to do it all more cost-effectively.
The company has partnered with various consumer marketers in the past, and continues to do so with operations including American Express and AT&T;, he said. Those have included everything from shared direct-mail initiatives to co-sponsorship of concerts.
“The trick is to find companies where there is a good match … and to ensure we can do it without hurting each other’s business,” Dluzak said. “Coca-Cola is a good example of a company in which Harrah’s is positioned extremely well in promotions that have national footprint.”
Promotional partner potential in best online casino singapore Indeed, Harrah’s has virtually all the requisites a large consumer products marketer could possibly hope for in a promotional partner: Its 25 casinos span 12 states; its casinos welcomed 35 million visitors in 1999, the most recent figures available. In addition, the bulk of the company’s properties are branded under the same name, and it boasts a proprietary database of over 24 million customers.
While those assets give Harrah’s a competitive edge when it comes to attracting promotional partners, on paper the industry as a whole offers plenty of potentially fertile ground. The American Gaming Association estimates that there were 162.4 million casino visits that year — that’s more than the attendance of U.S. ski resorts, NASCAR races and Major League Baseball games combined. Members of almost one-third of all American households go to a casino at least once each year, according to the AGA.
Behind those numbers are some solid demographics. Virtually every age group, income level, race and region is well represented in the gambling population with a gender breakdown almost exactly 50-50. And the biggest single chunks of it come from the most desirable segments: Adults 35-44 with household incomes of $75,000 or higher, according to industry figures.
So why haven’t there been more deals?
“The brand takes on the personality and demeanor of whatever you are sponsoring,” noted Karen Baker, vice president of sponsorship marketing for Omnicom Group’s Tattoo/DDB. And most marketers are likely to ask “whether they want their brand associated with gambling.”
Scaring off marketers
That is certainly one major overhang; even a hint of danger or depravity can scare off some of the most aggressive marketers. For instance, despite the phenomenal rise of NASCAR, Baker added, “it is still something that people look at twice.”
If gambling’s image is still — and will likely remain — a limiting factor, it is far less of a problem than it once was, said Bill Eadington, a professor of economics and gaming at the University of Nevada at Reno.
“There is a slow but pretty steady trend toward greater social acceptance and less criticism” of casino gambling, he said. At the same time, the big operators are “less parochial” than they have been in the past when the industry “was insulated from the marketing partnerships that have been proven in other industries.”
While some corporations have had “reservations” about Harrah’s primary business line, said Dluzak, “I can’t think of an instance where we haven’t been able to get beyond that.”
Harrah’s is “a recognized leader” in promoting responsible gaming and that in itself can be used “as a key differentiator,” he said.
Any incremental revenues or realized cost savings from marketing a partnerships are unlikely to make large, direct contributions to gambling’s bottom line, but they offer value to both parties and could well become more common in the future, said Bear Stearns analyst Marc Falcone.
And Coke jumping in could be something of a breakthrough since “other large companies looking to get some exposure like this will certainly be taking a look at this deal.”