This blog is an excerpt from Future Anthem’s recently launched playbook: How sportsbooks can lead with AI. Grab a copy here.
Prove value and get buy-in from your CFO
No matter how many times the benefits of AI are mentioned in the news, scepticism is a natural companion of technology shifts. The inherent novelty of this game-changing technology inevitably subjects investment decisions to heightened scrutiny to ensure a sound business case is put forward to deliver a clear ROI.
Building your business case for an AI-driven sportsbook can be challenging, as it can be hard to know where to begin.
Below are the processes and considerations that Anthem recommends, based on our experience about how to best make the case for harnessing the power of AI. It follows 3 recommendations.
Recommendation 1 - take everyone on the AI journey
Stakeholder alignment and decision-making: Our first recommendation is to identify all the stakeholders involved in the decision-making process, and how AI will influence them. For example, Finance may not be involved in defining the player experience, but they will often end up being a crucial part of the final decision as the budget holder.
Some AI use cases may impact various teams. For example, player pop-ups – may involve marketing, compliance, legal, and design — as such, inputs of all teams should be considered, and a stakeholder from each team should be present from the beginning.
Be measurement-oriented from the start: As highlighted in step one, you must ensure that your AI use case aligns with your overall strategy and is measured in the same way. Your organisational North Star KPIs may have a specific focus on increasing ROI from acquired players, reducing churn, and increasing margin – to name a few.
You should anchor your business case against one of these KPIs and draw a direct line between the objective and how your AI initiative will contribute towards this headline goal.
Practical example: increasing margin: Use case: Implementing personalised betslip recommendations that aim to increase the number of legs in pre-game accumulators (parlays). To make a clear comparison, ensure that you are clear on your current baseline. For example, an operator’s single-leg betslips are responsible for 50% of their bets, with 2-leg betslips contributing to 10% of their total bets. As the number of legs increases, so does the potential margin.
We’d suggest providing a range of upside scenarios, in this case, if you aim to increase the number of legs by 1% (or 3%, or 5%) of bets by, the positive impact would be in the range of £xm.
Recommendation 2 - speaking the language of your CFO
At this point in the process, you should have the CFO’s attention. The numbers show promise, and they clearly align with your organisational goals.
Our second recommendation is to quantify the risk of making the investment. One of the common challenges with business cases is the need to be specific about the upside of individual parts of a player experience that you cannot attribute a financial value to. For example, how do you demonstrate the upside of a personalised navigation that leads to fewer clicks to bet?
To mitigate against this scenario, we recommend quantifying the risk of your entire initiative – i.e., what is the minimum value that your initiative needs to deliver in order to be cost-neutral?
Begin with a simple calculation that shows how many additional bets you would need over a year to break even on the investment
E.g., if your sportsbook has an average bet stake of £15 with a GW% of 10%, for a £95k annual spend you would only need to take an additional 1.2k bet per week to cover the cost of your investment.
Recommendation 3 - act now
Our final recommendation is to emphasise the often overlooked and underestimated concept: the opportunity cost of doing nothing.
To do this, we recommend taking the ranges you have used for the upside of the business case and demonstrating what the impact on the business would be if the same % of customers churned. This reinforces the fact that to stand still is to risk falling behind.
AI-driven personalisation is already a factor that sets category leaders apart – the winners in the sports betting industry will be no different. If you get behind the curve then the cost of catching up will far exceed making early investments, in specific measurable use cases with low downside risks today.
Learn more in Future Anthem’s recently launched playbook.
It walks you through 3 essential steps you need to join the race to real-time personalisation in the pursuit of outpacing your competition.
If you’re interested in how AI personalisation can build a competitive advantage that will help you grow and succeed responsibly, click here to download a copy.
Ready to make the leap to AI? We’d be glad to consult you at any step of your journey and show you how real-time personalisation will superpower your player experience.
For a limited time, and to celebrate our sports launch, the first ten sports operators who schedule a demo will win a custom JBL Clip 3 speaker – the perfect way to amplify your game.