Wynn Resorts Folds on Digital Marketing Spend in Favor of Affiliate Model

Posted on: March 3, 2022, 09:32h. 

Last updated on: March 3, 2022, 02:15h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Wynn Resorts officials told Nevada gaming regulators yesterday that the company has greatly changed its marketing strategy as it relates to its digital gaming unit.

Wynn Resorts WynnBet interactive affiliate marketing
A WynnBet advertisement featuring Shaq promoting a risk-free sign-up incentive. Wynn Resorts is scaling back its marketing budgets for its interactive gaming unit. (Image: WynnBet)

Wynn Resorts Senior VP and Treasurer Vincent Zahn provided insights into how its digital unit is being promoted. He was appearing before the Nevada Gaming Control Board (NGCB) to discuss the company’s application for a delayed public offering.

Zahn told the state that the overly competitive sports betting marketplace has rendered traditional advertising costs unreasonable.

Zahn explained that Wynn Interactive, which oversees the company’s WynnBet sports betting and interactive gaming division, is no longer aggressively marketing in the emerging gaming verticals. Instead, the Wynn executive said the organization is engaging in affiliate customer acquisition models.

We cut back on media spending and we shifted the business … to more of an affiliate-based customer acquisition model,” Zahn said, as first reported by CDC Gaming Reports.

Zahn concluded that traditional advertising for sports betting and iGaming products currently presents an “irrational” cost of customer acquisition.

Affiliate Marketing

WynnBet is operational in nine states — Arizona, Colorado, Indiana, Louisiana, Michigan, New Jersey, New York, Tennessee, and Virginia.

WynnBet’s robust marketing budgets were used to produce and air star-studded celebrity commercials. The spots were headlined by Ben Affleck, Shaquille O’Neal, and Jennifer Lopez’s mother, Lupe Lopez. But Wynn Resorts is now betting not on celebrities, but affiliate marketing schemes to sign-up new sportsbook and internet casino accounts.

At its core, affiliate marketing is the concept of an entity such as an online website marketing and promoting another company’s products. When a user clicks through from the affiliate site to the product and makes a purchase, the affiliate receives a commission based on the sales generated by that customer.

Affiliate marketing plays a critical role in an array of industries, not just online gaming and sports betting. But for WynnBet, affiliate marketing can help the business significantly drive down customer acquisition costs.

“Affiliate marketing creates mutually beneficial relationships between companies and their affiliates, and significantly reduces the cost of customer acquisition,” explained LeadDyno, an affiliate marketing firm that is primarily focused on e-commerce.

Capital Savings

Wynn Interactive spent $100 million in the third quarter of 2021 on customer acquisitions. The firm reduced that amount to $80 million in the final three months of the year.

Zahn detailed that Wynn Resorts has budgeted $40 million for Wynn Interactive marketing and customer acquisitions for January through March 2022. The spend is expected to further decrease over the next three quarters.

Wynn Interactive is the latest big name in the US interactive gaming space to slash its traditional marketing spend. Caesars Sportsbook, the digital gaming unit of the Las Vegas Strip casino giant, announced earlier this month that its media spend is being cut drastically.

Caesars Entertainment CEO Tom Reeg said Caesars Sportsbook will record a $1 billion loss this year on the basis of earnings before interest, taxes, depreciation, and amortization (EBITDA).