It’s no secret Fraud and Marketing at online gambling operators have a history of conflicting interests. It’s Marketing’s job to attract new players and boost existing players’ spending. They’re the revenue generators.
By comparison, Fraud is the neglected stepchild. Yes, the department stops fraudsters from cutting into revenue through credit card fraud and abusing bonus incentives, but Fraud’s success doesn’t show up on profit and loss statement in the same way as Marketing’s.
With the savings delivered by a successful fraud team comes the temptation to reduce the department’s budget. The logic being: ‘when there’s less [perceived] fraud, the department must need fewer resources.’
Fraud and Marketing: Opposite sides of one coin.
If Fraud tightens the sales funnel too much, it may negatively impact Marketing’s performance metrics.
But if a surge of suspicious players overwhelms Fraud, the operator’s overall fraud risk increases. In turn, Fraud may have additional (and, as we explore in the report, avoidable) work keeping fraudsters at bay. With more fraudsters hammering at the gates, their chances for success increase.
We asked fraud managers at online gambling operators about the costs when Marketing doesn't work well with Fraud. Here are their answers in their own words:
- The result will be financial losses in terms of paid commissions, bonus money, winnings paid out to promotion abusers. Reputational loss following bad publicity due to posts by blocked promotion abusers and complaints to the licensing authorities.
- Bad campaigns need to be taken down prematurely, loss of revenue, damage to the brand, friction in the cooperation between departments.
- Bad user experience is a possibility. And bad atmosphere in the office in any cases that could go wrong (such as a big VIP turning out to be a fraudster).
Just like the quality of a meal is influenced by the quality of its ingredients, so is Fraud’s efficacy influenced by the intensity and frequency of fraud-attempts that it must identify and stop. Marketing can help if it includes Fraud in the planning phase of its campaigns.
How Marketing and Fraud can work together better.
Fraud and Marketing share the best interests of the operator. They’re two sides of the same coin.
By helping Marketing to improve the quality of inbound traffic, Fraud can help improve each campaign’s conversion rate. Doing so may raise the cost per lead, one of Marketing’s key performance indicators.
Is it worth the extra effort for Marketing to focus on the cost per qualified lead? We think so, and we think you will, too, once you read our new report, Stacking The Odds Against Online Gambling Fraud.