In an interview with Wagers.com, Rob Phythian, the CEO of SharpLink discusses a wide range of topics, including the future of sports betting marketing.
Affiliates are an integral part of the online gambling ecosystem. At the iGaming Next conference, Catena Media CEO Michael Daly said that while affiliates constitute 30% of marketing spend in Europe, in the US it’s around 10%.
To Daly’s overarching point, as the US market matures, the industry will become more reliant on affiliate marketing. And because of the vast opportunities, the industry writ large is rapidly evolving, and so is affiliate marketing, with entirely new categories of affiliates springing into being.
One such company trying to disrupt the affiliate status quo is SharpLink, whose CEO recently spoke with Wagers.com.
You can listen to Rob Phythian’s appearance on the Wagers Wonks podcast here.
What is SharpLink?
Steve Ruddock: Could you tell me about your product, and how it fits into the sports betting ecosystem?
Rob Phythian: The best analogy is if you’re shopping on Amazon.com and you buy car mats, when you look further down the screen, you may see jumper cables, a car battery, or other suggestions. So, you’ve now been prompted, based on one behavior, to consider other purchasing recommendations in a category that Amazon knows you’re interested in. That’s the software we’re building for sports betting.
We call it the “bot behind the bet.” We know what you like, teams, what players you like to bet on, and we log it through an ID system. When you come back online, we go, “Hey, Steve’s back on. You bet the Tampa Bay game, and it’s not really looking that good. However, there’s a halftime bet from BetMGM you might like.” We have also built a display recreating the actual bet slip for BetMGM and other properties on the audience site through which you can interact and build a bet. When we work with an operator, we deliver potential bettors to their doorstep, but we don’t have visibility if the bet was closed.
Simply put, we make sports betting easy.
NASCAR Highlights SharpLink’s Successes
Steve Ruddock: Looking at the data points you released regarding your integration with NASCAR and BetMGM, I was impressed with your engagement and conversion numbers. What makes that possible?
Rob Phythian: We have strong partners who fundamentally understand new strategies are needed to integrate their audience with sports betting. NASCAR just happens to be one of the most progressive leagues, so we’ve been able to take steps with BetMGM as a partner, who’s pretty progressive in their tech stack, to insert offers on the NASCAR homepage that are contextual.
We test all sorts of ways to get the user interested and it’s producing great results. So, it’s not a banner or button. It’s not a free money offer. Blanket promotions are going to end at some point. The shift will move from throwing money at the general audience to, “What is the audience? What are they interested in? How do you get their attention? How do you make it easy for them to interact?”
When compared to static banners, buttons, and other conventional methods, our results have proven to be very fruitful. In fact, our click-through rate was 9.2%, which is massive when compared to the standard industry rate of less than 1% for a banner ad. NASCAR fans who registered with BetMGM increased 72%, deposits increased 152% and qualified depositors rose 225%. MGM is very happy, and NASCAR is happy.
That’s what we’re doing with NASCAR, but we work with other leagues too. We do free-to-play games for the NBA, brackets for March Madness and Turner Sports, as well as the PGA Tour and NASCAR’s fantasy games. They know us and now they know us as a technology solution to convert sports betters. As mentioned, NASCAR has been the most progressive to get to market with some of these solutions.
It’s proving to be what I think is going to be in the next wave of league deals, where there’s going to be more onus on performance and less on brand marketing. So we’re just at the early stages.
A New Type of Affiliate
Steve Ruddock: It seems like you occupy a pretty unique position where your products are advertised on the NASCAR website and you can divert NASCAR bets to licensed sportsbooks you’re partnered with. As a partner, you seem to work seamlessly with both ends of the pipeline.
Rob Phythian: Yes, and when there is a relationship between a bookmaker and league, we can come in to help that relationship succeed. In those situations, we don’t necessarily get paid for delivery of the user, we just get a fee for service every month for what we do.
Phase 2 of the US Sports Betting Market
Steve Ruddock: What happens when marketing shifts and the low-hanging fruit has all been picked, and retention increases in importance?
Rob Phythian: Yes, so there are several ways to look at retention when you’re on a league site. Number one is fan loyalty. For example, NASCAR’s audience is very sticky. The next layer is sweepstakes and free-to-play games. You offer those and you retain the customer, and now you get to know a little about them. And then the next layer is the fantasy sports fan, who is really engaged. And you really get to know their favorite drivers, because they’re on their fantasy team. So, you get this breadcrumb trail to follow. This final thing that we’ve encouraged NASCAR to do when working with bookmaker partners is to embed some offers right inside of these applications.
As we get to know the customer, we get to know them better. If they’re fantasy players, we know them better than a sweepstakes player, who we know better than the casual fan, and then there’s the lurker. All of it is data that we can use to provide an offer. Maybe it’s a prop bet for the driver they like against another driver, and when they come back to NASCAR.com, they’ll see something within the fantasy game or the homepage about the driver they like. That leads to much higher conversion and retention.
That’s the system we’re building, and every league and media site should think about their users in that way and use technology like ours to surface the right bet at the right time. It helps control costs. , It is simply not sustainable to spend the money they’re spending the way they are currently spending it using banners and buttons. As the US market matures, the growth forecasts seem to be getting rosier. , Let’s just pick a number, say $9 billion in net gaming revenue is possible in a more matured market, and the operators will continue to spend a third of that amount to acquire bettors. My thesis is that third is going to shift to smarter betting conversion, and we’re just at the start of that shift. Companies like SharpLink, which are thinking about ways to connect to the user and get to know them, will benefit from that shift when it occurs.
I’m pretty excited about our Company’s positioning and the investment we’re making in our technology. It’s going to pay off.
UX Will Define the Winners and Losers
Steve Ruddock: Are you finding what sometimes an operator thinks the customer is interested in isn’t the case?
Rob Phythian: What they’re finding in my opinion, in talking with the bookmakers, is they have to redefine the user experience. Sports betting’s expansion across the US is happening faster than anyone would have thought three years ago. Keeping up with the state-by-state rollout has proven to be overwhelming to a lot of the books and they haven’t innovated. And now some of them are taking a step back and improving that user experience. Whether it’s the credit card decline rates, or intuitive UX, they’re all revisiting that right now. I think in the next 12 to 24 months, you’re going to see improvements in the user experience.
Finding Blue Chip Prospects
Steve Ruddock: Another interesting aspect of the NASCAR data was your customers were increasingly stickier with each step of the process. Do you know why the customers you send to a betting site have a better tolerance to these friction points?
Rob Phythian: Again, it’s stickier, but it’s smaller at every step and by the time they finally get to the book, they’re just sticking at a much higher rate as they go through the funnel. And I think it just comes down to what I said earlier, they become invested because we’re serving them the right information at the right time.
