Strategy

Promoted feature: The new normal in esports

Alexey Khobot, the developer of Fonbet's first software, discusses contracts with the Russian national football team and KHL, creation of a super app and survival of betting companies without sports

Now that sport is back, the main question is whether the industry will see a return to its pre-pandemic levels of explosive growth and how much time will it take for the industry to see the return of pre-Covid betting volumes and large advertising budgets?

As with many industries affected by the quarantine, there will be a deferred demand effect. People sorely missed top-level sport. “This is evidenced by the significant increase in new registrations and bets placed with us since the resumption of the Bundesliga,” Alexey Khobot of Fonbet says. Some Fonbet customers took a hiatus, but now they are returning. The company expects to reach pre-quarantine levels as per MAU and DAU indicators in the not-too-distant future.

“As for reaching the previous high rates of growth – it’s almost impossible to be sure. On one hand, for obvious reasons, we have to brace ourselves for the reduction in disposable income among our customer base,” Khobot states. This will affect the average total amount of each betslip, as well as the number of bets placed per customer. On the other hand, any kind of crisis can be used as a window of opportunity, especially for an industry leader. Alexey Khobot also notes: “Our company’s strong product, technology and optimisation, something which we focused heavily on during the quarantine, will allow us to reach previous rates of growth by the end of the year.”

During the crisis, the company refocused marketing budgets towards esports. The question is whether this has been a profitable investment, if compared to budget appropriated for the ‘traditional’ market?

The esports’ uptick

Some of the main esports events were also cancelled or postponed as a result of the lockdown. Teams were unable to practise normally, given that they are usually all based in different parts of the planet.

In Fonbet’s experience, players were more interested in FIFA or PES, games which involve real athletes, rather than Dota or CS. We also managed to trial cyber hockey and cyber martial arts with the participation of ‘real’ people. We held the FONBET Cyber Basketball Championship of Russia in tandem with the company’s partners, the RBF.

According to Alexey Khobot, Fonbet shifted a chunk of its budget towards esports, but in general, as far as the period in question is concerned, the company’s primary strategy involved the optimisation of marketing expenses. Now that professional sport is returning, we are looking to increase spending on marketing. We are open to moving into different areas and trends, but not so much with esports.

Another important matter is what the company’s main focus regarding the distribution of the marketing budget will be when the sporting situation is back to normal.

Alexey Khobot shared that the company’s primary focus would be in providing internet and TV broadcasts of the main events from all the top leagues and competitions, as they return. Fonbet will continue working on and with all of its current contracts and main partners: KHL, the Russian national football team and VTB United League. According to Alexey Khobot, the main plan is to expand Fonbet’s sponsorship portfolio.

Khobot adds: “We are looking towards creating new advertising channels. I’ll share with you our plans of how we’ll do this. We also plan further investments in CRM [customer relationship management – our collaborations with Betting Insider being a fine example], this is one of our key priorities as regards our marketing activities going forward.”

The post-pandemic future

The next question is concerned with how much the company expects the proportion of offline players (those who place bets in physical betting shops) to decline once the pandemic is over.

Consumer habits have already shifted towards playing online, the same has been seen in almost all industries, from retail to the entertainment industry, Alexey Khobot states. Fonbet has always had strong online products – the website and application for mobiles and tablets. Most of Fonbet’s customers prefer to play online. In answer to the question about the transition to online, Alexey Khobot’s opinion is: if sports hadn’t been suspended, Fonbet would probably be talking about expectations for an extremely significant migration of offline customers to the online platform. What the company is actually seeing is a relatively small migration of offline customers to online. Still, betting shops don’t just provide lively communication, but also other benefits: a bar/restaurant, VIP rooms, massage chairs, and table service. The company’s offline customers call the company’s top managers, especially our VIPs, to ask when the betting shops will open. Some of them have started to play online, especially since the Bundesliga resumed. However, they still plan to return to visiting betting shops.

At the moment, Fonbet’s betting shops in Moscow remain closed. They will only reopen once there is permission from the authorities and can be sure that all safety measures are observed.

Alexey Khobot shared with us some ideas for boosting customer engagement levels and whether there will be any changes made to the bookmaker’s website and mobile application.

The company plans to release a new mobile application soon. One of the new useful features allows for the personalisation of the app’s interface and betting process. In general, bookmakers use the total volume of bets placed and accepted online as a yardstick for success. “Everyone likes to discuss who has the best advertising, and in fact, the amount a bookmaker can earn depends on how easy-to-use and fast their live section is,” Khobot adds. There are a lot of betting companies, for whom it is simply impossible to offer any form of live service because they lack the capacity to deal with ever-changing odds in real time. In the Fonbet application, you can select different modes for controlling the auto-confirming bets in case the odds change as the bet is being placed. For example, you click to place a bet with odds of 1.55, if during the split second it takes for the bet to be accepted, the odds go up to 1.57, the bet will still be placed without any further confirmation.

According to Alexey Khobot, Fonbet is also moving towards the conception of a so-called super application. The clients are already able to watch live broadcasts, keep track of events in the Match Centre and read our latest sports predictions/news.

The last question is concerned with whether the “new normal” will change the way your employees in the marketing department and physical betting shops work and whether the company plans to keep some of them working remotely.

According to Alexey Khobot, the company’s offices were quarantined two weeks before the official order was made. The company’s employees and top managers were worried about the situation with the virus, and Fonbet’s shareholders fully backed the idea of working remotely.

In the middle of June the company discussed how the return to the office will be organised if/when the quarantine measures are lifted. Fonbet plans to maintain an office occupancy rate of no more than 30% (for the size of our office space, the recommended maximum occupancy rate is 60%). The company will also provide employees with all the necessary protective equipment, Alexey Khobot states.

Ensuring the health and safety of the company’s employees is of paramount importance to senior management. It’s worth adding that Fonbet provides excellent medical insurance, which also covers online doctor’s appointments.

The marketing department will work for two to three days a week in the office to give an opportunity for meaningful participation in offline meetings and conferences.

As regards to remote work, Fonbet employees already had the possibility of working remotely. Several of the company’s designers work remotely after moving to Bali and Thailand. The executive management does not mind, provided that the quality of work doesn’t suffer and deadlines are strictly met. What will change is the approach to hiring people from these regions. The company proved that it is capable of working remotely. Alexey Khobot adds: “The crisis will make us more sensitive to costs. I’m sure there will be a tendency for us to recruit remote workers from the regions.”

Fonbet was founded by Anatoliy Matchulskiy in 1994. Fonbet is a sponsor of the Russia national football team, Continental Hockey League and VTB United League. It also has partnership agreements with the Avangard and Spartak hockey clubs. Fonbet was a sponsor for the 2017, 2018, and 2019 Ice Hockey World Championships, and will sponsor the upcoming 2021 tournament as well. In 2020, Fonbet was the title partner of the Ice Hockey Star Week and the Russian Interactive Basketball Championships.

Coronavirus | Esports | Fonbet | Marketing | Mobile app | Retail betting | Russia | Strategy

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