First-time deposit (FTD) conversion is a widely used acquisition metric in the online gambling industry. It is normally calculated by dividing the number unique visitors by the number of FTDs. The value of the FTD and second deposit (if there is one) is a strong indication of the potential life time value of a customer.
However, FTD conversion rates for gaming companies can be very low, in some case less than 1%. This means acquisition costs for casino in particular can run into the hundreds of pounds for each player. Some affiliates will charge in excess of $300 per real money player (RMP). Companies therefore prefer to attract new customers though PPC and organic campaigns by offering large deposit bonuses to attract VIP players.
Low conversion rates also make it difficult to conduct A/B tests on many sites as it can potentially take months for a test to build up sufficient conversions for a conclusive result. In addition, some sites offer a cash free bonus for new customers and so FTDs numbers can be artificially boosted by these kinds of promotions. If possible avoid including free cash bonuses in your FTD figures and measure RMPs instead.
Due to low FTD conversion it may be necessary to optimise for micro-conversions (e.g. registrations) when conducting A/B tests. This does however make it difficult to estimate return on investments levels for A/B testing tools.
The danger here is that some sites end up optimising for clicks on the call-to-action (CTA) button. This is not recommended as clicks on a CTA are meaningless when it comes to increasing FTDs and revenues. Always measure the impact of a test on FTDs and revenues as if you don’t see an improvement in these metrics it is likely the new experience is not having the desired effect.
Many companies also use third-party platforms for their sites, which in some cases are also competitors. This means that companies may have to rely on analytics reporting from the platform provider and may not have full control over key points in the customer journey (e.g. registration form). As a result these companies may have limited ability to A/B test to improve FTD conversion.
For more details of some of the challenges around welcome bonuses read my post Secrets of optimising gambling sites – Bonuses.
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