Why Many Online Poker Rooms Are Failing

Awhile back I wrote an article titled, Why Affiliates Will Always Trump Online Poker Rooms, the received a lot emails from poker room employees and some side-discussions with affiliates. I guess it was a self-selecting group but most of the people who wrote me agreed with me but couldn’t do so in public.

One of the themes of the post was that online poker rooms really don’t get it. If you look around at the poker world right now, basically you’re seeing the top 4 or 5 rooms/networks getting bigger and everybody else is getting their butts handed to them. Most people are gravitating towards liquidity and liquidity translates into rake which can then be used to advertise to bring in more new players.

One of the failures of most poker rooms has been in what they’re doing with their players. I’ve commented several times that I’m lucky to get an email once a year from PokerStars. Full Tilt isn’t much better. I used to get weekly Tips From the Pros but I haven’t seen one in ages.

Today, I had TweetDeck open and one of the columns I have set up is a feed from my Facebook account. I get my friend’s status updates the same way people get tweets (or as Dan M from Pokerati would call them Twitters j/k). And this one caught my eye.

Why isn’t anybody doing this? I would have to imagine that the revenue that Zynga makes on poker is a drop in the bucket compared to Stars and Tilt but the best PokerStars can come up with is a Twitter Poker League that seems to have no real connection to poker. Why hasn’t a poker room developed a Twitter app that could insert these tweets into a player’s Twitter feed? Or do it on Facebook.

The idea is simple, at signup or as part of the signin after the update players are asked if they have Facebook and Twitter accounts. If they do they can agree to let them pump in messages into their status updates / tweets and if it resulted in any signups the user gets paid a refer a friend bonus. You could even allow them to configure the privacy settings so that only certain kinds of information gets sent (i.e. Only send tournament wins).

According to Zynga’s Facebook page they have over 6,000,000 players every day. Most rooms would give their left, uhm, uh, arm, for that kind of traffic. Yet despite the success of using players to spread the word I can’t get a monthly newsletter out of most of the sites I’m signed up with. In fact, it’s so bad that many don’t even bother sending the emails. They just send out a notice to affiliates and let it get posted on PokerNews and other affiliate sites.

I can see some potential legal issues here but both Stars and Tilt walk the line close enough that there really shouldn’t be too much they can’t do. Even if they had to offer play money only to get by Facebook’s rules that’s still a lot of people you can cross market to.

But if they did launch something like this would they promote it or throw it out there and let it die a slow death? How much did Zynga spend on Facebook ads and other marketing to get their application rolling? I doubt most poker rooms would spend the money because it doesn’t show an immediate payback. They understand television advertising, print advertising, SEO, and affiliates but nobody really seems to get social media.

My first thought when I saw that FB status update was what if you could insert a tweet every time someone signed up for a tournament. Let’s say you’ve got 1000 players and they have an average of 100 followers each, that’s a potential audience of 100,000 people. And the message is coming from someone they decided to follow so it’s not even a direct sales pitch from you (e.g. “Hey, I just signed up to play in the $30,000 guaranteed on Tilt. Want to join me?”). Even if you only get a 1% response rate that’s 1000 extra people on the site.

Personally, I hate most of the Zynga games on Facebook. I get so tired of all these farms and mafia wars and other games flooding my status news feed but they’re obviously working. Somehow Zynga is clocking somewhere north of $100 million a year in revenues (nobody knows for sure outside of the company). Outside of the top four or five poker rooms nobody is making that kind of money in poker. Granted all that Zynga revenue is not just poker but Zynga also isn’t raking any of those games.

Unfortunately, the online poker world seems to be content just doing the same old thing. Buying television time, buying print space, sponsoring players, offering bonuses, creating online tours, etc, etc, etc. Where’s the innovation? Where’s the outside the box thinking?

I guess the upside is seeing people completely out-market the online poker sites gives me plenty of stuff to blog about 🙂