A young fan at the Gold Cup & Saucer

It’s no secret horse racing events like the Derby and Breeders Cup are well attended. But the most watched live horse racing event you may have never heard of supplies us a strong lesson in the power of branding, buzz and being who you are

It’s two minutes to midnight on a Saturday in August. Thousands upon thousands of racegoers are waiting for the call to the post. The concession stands are quiet, the Ferris wheel beside the track has no one on it. Horsemen, fans and grooms are draped over the backstretch fence. Teenage girls dressed as jockey’s are holding a trophy, and flanking them is a singer, bellowing out a traditional island anthem. The lights go out and a spotlight from the roof of the 120 year old oval is switched on.

Each horse leaves the side paddock and the light centers right on them. Announcer Vance Cameron does not only announce the horses name, owners name and drivers name – he tells a story about each horse, and if the owners and driver is not local, he thanks them for coming. The crowd applauds each horse, whether they are even money or 100-1, and the connections salute them, usually with a huge smile and a wave of the whip.

Perhaps the most unique race on this continent is the Gold Cup and Saucer in Charlottetown, Prince Edward Island, Canada. The annual harness race has a $60,000 purse (well below the Hambletonian and North America Cup’s $1.5M) and does not attract the top horses in the sport, but don’t tell the people watching that.

PEI, for those who do not know, is an Island on the east coast of Canada, connected to the mainland by a ferry and a recently constructed bridge. The entire island can be circled in less than a few hours by car, and its population totals about 135,000, or the size of a small city. It is a 16 hour plus drive from Toronto, or New York, or Pennsylvania where most of the harness industry does their business. But each August, several trainers load up their stock (when they can race for a similar or larger sized purse at home, no less), people plan their trips and head to the east coast, in pursuit of participating in, or watching the Gold Cup and Saucer.

Hundreds of races are run during the week

Why do all these people go to the race, and why do trainers and owners want to win it, sometimes shipping for two days to compete? It is like an allowance runner shipping from Monmouth where he can race for more money, to North Dakota for less money. For race fans, they can see a million dollar race and spend some time in Manhattan or Toronto, and catch a broadway show on off race days instead. But they come to PEI in huge numbers.

The race is a part of “Old Home Week”, which is not unlike a county fair, or homecoming week. This week provides an excellent branding opportunity for the race, which they have taken advantage of. The whole week – the parties, the parade, the fair – all push the end of the week spectacle – the horse race. For anyone who visits, it is impossible not to know that a horse race is happening, and you better be studied up on it, or people will give you a funny look. Being married to the fair aspect of the week, was a very smart thing to do.

Jeremy Pierce, former manager of Harness Racing PEI, has a career in sports marketing, and has worked for the NHL’s Columbus Blue Jackets. He and the team has brought grassroots marketing to the event, and he thinks its uniqueness and spirit helps sell itself.

Old Home Week Parade

“The one thing we always talked about with the GCS is that we wanted to bring ‘the race to the people’ rather than rely on ‘people coming to the race.’ We actively start the promotion of the race months in advance – actually the campaign starts on opening day” he said.

The side attractions like the 4H club displays, the stands selling PEI potatoes and homemade jam, the fair, the cotton candy and the rest of the “down home” friendliness is not for everyone, but they are not marketing to everyone. They do not sell flash, or big city ceremony – they wear their heart on their sleeve and sell who they are. PEI is 4H clubs and down home hospitality, and they do not apologize for it or try to hide it. That is a strong part of marketing, which has stood the test of time – always be who you are, because consumers see right through you if you are not.

“When OHW rolls around, the sole focus is on hospitality. Not only for the GCS horses, owners and trainers, but the fans. We were all too well aware that this was the only time of the year that most come to the track. And if it is the only time of the year that they come, we want to ensure that they have the best time possible to ensure that they pencil in next year too. We build the horses up as heroes at the track and in the media.” Pierce added.

“I have been to the last 18 in a row” replied Harvey Timmons, a 36 year old police officer and racing fan from Trenton, Nova Scotia. “I have started new jobs, had birthdays to go to, anniversaries, but I always make it for the whole week. It’s a time to catch up with old friends, meet some new ones, watch fantastic racing and have a great time.”

Illustrating the impressive cross promotion of the event, Timmons elaborates on the racing.

“When you arrive in town for the week, everyone is talking about the race. It is not uncommon to see a stranger on the street ask you who you like. Sometimes you end up having a beer and discussing it”  Timmons explains. “We do not get to see a lot of speedy horses in this part of the world, so when they come, we all come.”

As for the event itself, it is well-reviewed.

“One of the best things I have ever seen in racing was this year when winning driver Scott Zeron took the horse around the fence and high-fived everyone he could. It’s the little things like that you see here that you do not see anywhere else” Pierce said.

“The race-night is fantastic”, Timmons added “The post parade is the best in the sport – by a mile. Everyone feels welcome from a child (mine’s 18 months & she had a ball) to the hardened fan, to a grandma there to spend time with her family, to the guy who gets bombed in a beer tent and won’t remember the night at all. The focus is on enjoyment and they use horses to do it which helps make a casual fan into just a fan.

“When the race is over, the week is over and you can feel it. But then we know that it is only one year away minus a week. It’s time to get ready for next year”

We have dozens of big thoroughbred races with low attendance, and some of the triple crown races in harness racing’s big cities can barely get one twentieth of the visitors this little race that no one has even heard of gets. In fact, racing has televised some thoroughbred races on ESPN and others which get barely 200,000 viewers. It seems surprising that this can succeed in such huge numbers. Not to mention, while many events in racing are free, or a tiny admission, the Gold Cup pass is $20, and parking is not cheap either. If the event is worth it, people will pay.

I believe, from having been there, it’s the pure buzz marketing and word of mouth, as illustrated by Messrs Timmons and Pierce, that works. In fact, that is the way I found about this race. It was not even simulcast; I just had person after person ask me if I have ever been there for the event. After I told them no, they told me in no uncertain terms that I better get out there – the people are friendly, you will have great food and meet some great friends. I have rarely gotten that advice for any race with such verve or passion, even the Breeders Cup or Derby. So I went; and yes, I am glad I did. Those people are exactly right – it is a slice of rural Canadiana, and for a city boy, it is refreshing, relaxing, different and fun.

In terms of horse owners and trainers, the staff tries their hardest to bring great horses to the event.

Jeremy Pierce: “We have bent over backwards as hosts to owners and trainers by sending them golfing, deep sea fishing, or simply giving insights into PEI ’s best hidden beaches. The more we can do for them, the more they sell the race to other owners and trainers when they return to Ontario , Quebec , Eastern US , etc. In essence, they become unofficial ambassadors. We want to have high return visitation and participation amongst owners.”

On the Internet things are not much different. I was scanning the chat boards this year for this race, and there was that same buzz, which surprised me, because for years this race was never really followed by people outside eastern Canada. On a Canadian racing chat board I notice a pool is going on with people making their picks. Amazingly, on a US board, there is a thread about this race, a race which has never been seen on simulcast outlets in the lower 48, and in all honesty, should not appeal to these posters.  These people making picks and posting video from youtube on the chat site can walk down the street to their local venue and see better horses, but there they are talking about PEI and the Gold Cup and Saucer. It is absolutely strange, because it would be tantamount to a thread started on Paceadvantage.com about the sixth at Finger Lakes. Regardless, this bodes well as the organizers start expanding reach by signing up simulcast outlets to try and grow handles.

Can live racing succeed by marketing events? Can small events at a Pocono Downs or Mountaineer or Turfway, or Yavapai Downs succeed? If you asked 100 people in racing who have tried, many would say no. But, I believe they have a shot. If they follow the Gold Cup and Saucer example and marry themselves with an event, and make their event a unique and interesting culmination of it, the buzz might just end up bringing in more and more people.

Jeremy Pierce believes their formula works.

“The GCS is different than most races, because it is an event for both the participant and the fans. We have always seen it that way. I believe that this was the original intent of the race founders, we just continued that approach.”

Maybe it won’t be the Kentucky Derby, but perhaps it does not have to be.

As Mr. Timmons alludes.

“The only thing that compares to it is the Kentucky Derby, which I have been to and enjoyed immensely. But given the choice, if I could only go to either the Derby or the Gold Cup and Saucer in a given year – my ass would be in Charlottetown.”

For a look at this years race from two Saturday’s ago, here you go. The winners ceremony at about 5:00 is a joy to watch. It is not a large purse win, but the owners look more excited to win this than a million dollar race.

It is not much different with a website, even in racing.

Case in point – The Paulick Report.

The Paulick Report engages its readers better than any racing site out there, considering its late start into the fray. At postrank.com, their labs page shows just how much engagement a website has and they have built a metric to describe it – an engagement score.

An engagement score is simply the number of mentions, links, forwards via social media, comments and other interactive measures a story or blog post has. Post Rank weights it based on importance, and voila, we have a score.

Here are three racing websites and their engagement scores for the past 30 days (click to enlarge).

As we can see, drf.com and equibase.com are information sites who fill their niche:  The visitors are racing people, or fans who know about them. There is little engagement of their readers, and in turn, a great deal of their content is static content – published, and nothing else. Paulick on the other hand has a huge engagement score. His stories are responded to, and forwarded via news readers, social media and blogs.

Why is this important? Because when you have engagement you have people doing online public relations for you, and your sport. A link or headline from a Paulick story on Facebook or Digg is seen by non-racing fans. If a non-racing fan sees and clicks a link and comes to the report, chances are they see comments – there is someone home in our stadium. It’s good for us.

This does not, of course, mean that the drf or Equibase are doing nothing for racing. They do what they do best. However, with other sports like football and its NFL.com, world cup soccer, MLB.com for baseball and many others all engaging their fans and making it a priority, it is very important for us to have a site like the Paulick Report doing the same. (the Bloodhorse.com also does a good job with this, after their restructuring).

This is especially important for us because we do not have a league office in racing.  If we could turn back the clock I am sure (well, in racing maybe not) we would have a www.horseracing.com doing what MLB.com and NFL.com are doing. But we can not turn back the clock of course. In the meantime, Paulick is acting in large part like our league site, by filtering news and opinion to non-traditional racing demographics.

I’m only 21 so I completely understand the appeal of a star like Katy Perry or Lady Gaga. While I don’t like their overall image or some of the content in their songs there is no denying that they know how to excite the music world and be the “banner act”. They record songs with beats and tempos that make you feel great and make music videos so bizarre to go along that they create the “must see/hear” buzz.

I have noticed one interesting thing that happens when I get my friends or family to watch races (usually on Youtube) of horses like Zenyatta, Rachel Alexandra or Curlin. They will usually only get excited when they can hear the crowd as the horses enter the stretch. If it’s just the announcer and the cheers of the fans have been sifted out of the recording it takes most of the excitement away for them. Speaking from experience here: It’s a whole lot more fun to scream/cheer when you aren’t the only one.

I personally could not possibly agree more. I brought a newbie to the Queen’s Plate last year. Mid lane the crowd exploded. She had been to several races before but with the crowd so energized she said immediately after “wow, that was so much fun! Look at the people!”.

As an example, I submit this. Move forward to around the mile mark pole on each video (1 minute and thirty second point on the first video & and about 1:42 in video two) listen through the finish. Which one gives you more goosebumps? I believe we should produce more of video two for all our races on television. Agree or disagree?

ESPN heavily-produced sound coverage (move to 1:30)

Track feed sound coverage (listen after the race as well: Move to 1:42)

And of course, how about this? Forward to about 1:50 (and turn the sound down a little :))

Thanks for the comment Brian!

I had a chance to speak with a colleague for a good deal of time about branding, and how all of your marketing today has to be structured and tailored to your goal. This might sound rudimentary, however with social media, ad buys/banner ads and pay per click marketing all mixed with traditional, this is easier said than done.

I got an email a few days ago from him titled “Katy Perry”. He said “have a look at her latest video to see branding, and video branding at work.” We went on to discuss the premise that her ‘people’ know what they are doing. They are not producing a video, or scheduling a concert; everything they do involves the Katy Perry brand.

In the video he forwarded me to, “California Gurls”, they have stuck to this branding message, perfectly. The video, in my opinion (although I am not the audience), is ridiculous. But its ridiculousness builds the Katy Perry brand. It is risque (she is barely clothed). It is completely over-the-top (unless cupcake and cherry bras are mild-tempered). But it is also extremely buzzable; especially to her demo. They have also included a 1990 rapper, as part of the song and video; in my opinion for a reason. On the surface this is just a video, but it is more than that.

The video, the song, the guest singer; everything has a purpose.

After the video is done, the branding and buzz does not stop. Long ago the music industry shied away from using Youtube for their videos. Now we see this video uploaded by Perry’s people themselves, in HD, as are all her videos. They have also promoted videos about making the video itself. The page is promoted via viral marketing and social media and this media promotes Ms. Perry as it empirically does.

For a glimpse at the power of viral marketing, I did a search for feedback on this video and it was all over the net – embedded in story after story, blog post after blog post. Yes it was in the usual places, but it was in many others. Snoop Dogg’s fans were screaming about a sell out on rap and hip-hop sites (more buzz). I saw it on a marijuana board being discussed, with someone saying ‘I’m glad I was not high when watching those gummy bears. It would freak me out.’

In addition, the Katy Perry branding does not stop there. When they direct millions of people to this video they get data from Youtube insights on who, what and where their fans are. As well, with it flying around and promoted on Facebook the metrics gleaned about her customers is front and center via their system.

As my colleague noted – pure, calculated, modern, 2010 marketing.

It got me thinking about racing. If everything that I allude to is done for a Katy Perry video, right from song choice, to directing, to distribution and buzz and post click metrics, because that’s the way it is done, what exactly is racings video strategy? Is there a plan? Do we have a structured way to show our races on the web, archive them, group races together for viral videos? Anything?

I think we all know the answer, but I ended up giving it a shot. I went searching for horse names, famous race names and assorted racing searches for video. What I found was a complete mess – there was zero structure, there was no plan. There was virtually nothing that we could use for any branding or marketing purpose.

However, it gets worse than that.

Searching for “Zenyatta” on youtube brings us to some videos, one of which is a compilation of her races. Let’s leave for a moment that this video was not an industry produced one, that is SEO and search friendly, with a plan; it is done by a young girl. It has almost 1000 views in a short period of time, and it is a nice commercial for racing. If 100 newbies found this video by searching Zenyatta, and we had a 5% conversion rate for getting them to look for more information and races with her, they would not find much. In the search business this is called a dead click, or bounce out. We would not even know, however, because we don’t even have access to any post click metrics, because we did not produce the video.

Unfortunately it does not end there. This same girl also likes Rachel Alexandra, so she produced her races for youtube. Great, another free commercial for racing, right? Not so fast. She tried to upload it to youtube, but since the Kentucky Oaks win is Churchill Downs property, it is a copyright infringement and her Rachel video was removed.

She had to upload it to Vimeo. So if you’d like to watch it, you still can. I hope they don’t take it down.

I truly believe that social media marketing, video marketing and anything else that we do in racing can not be a ‘throw it against the wall and hope it works’ exercise. Video’s like Katy Perry’s California Gurls are not getting 4M+ views in a week by accident.  She is not the hottest star around because she is lucky or super-talented. It is planned. I think we need a whole lot more planning, especially with video in our sport.

Hosts at Woodbine Live

We do not see television ratings for racing increase much anymore, although this year we saw some nice bumps for the Derby, which was welcomed. In general any rise will be small and seemingly not sustainable. North of the border, this is not the case, but it is also not your average, every day horse racing telecast.

Race Night on the Score was a long running weekly two hour racing show, pumped into Canadian homes via a cable sports network. The program was paid for by Woodbine Entertainment, as they tried to get people to watch both standardbred and thoroughbred racing, and become customers. The format was simple : show races, handicap them, show human interest stories about trainers and owners, and so on. In effect, it was the “formula” that we have seen for many years.

It is not impolite to say that it was a failure. The ratings were microscopic.

This season they made a change. They rebranded the show and called it “Bet Night Live”. Yes, a show on racing using that nasty word that we seem to want to hide every moment of every day – betting. In the new format they go after the tight market of people who want to play a game, or learn a game, while offering them a chance to win prizes, and win money. They do this in conjunction with their ADW – Horseplayerinteractive.com – and meld that into the show itself. They also have kept their handicapping expert in the mix, so serious players still get a chance to hear some handicapping, and newer ones will learn. Gone are the human interest stories that we have all seen since the medium was invented.

Laura and Sandy Hawley

The show adds the in-studio sports updates, and has a contestant picking races in studio as well. They have also nicely weaved education, for bettors and fans, old and new (tonight they have a feature on what to look for in a post parade, for example). They are selling a game and are selling a chance to make some money. They have even batted around an idea on a “pick all” where one fan has the chance to pick all the winners and walk away with $1M in cash. In a nutshell, the show is fresh, fast and nothing like we’ve seen before in our sport.

What is the result?

The ratings are up 300%.

In addition, according to Greg Blanchard at Woodbine, sign-ups to their ADW are in “the triple digit range each show”.

In Studio

We wrote about going after a targeted small slice of the game playing market like this in our piece “Positioning Racing”: “For those who would say concentrating on one type of customer pigeonholes us, I would say that is unimportant and in fact the antithesis of what successful companies are doing in this century. ” Customers of countless products or services are simply a slice of a bigger market. We cannot be all things to all people. Trying to grab a slice of a market is better than no market at all and catering to every whim and wish of what customers we would like to have is 1960 thinking – and completely wrong. It has no place in present day marketing. The team at Woodbine seems to be embracing this new philosophy, and it seems to be working. They are no longer sitting in a production meeting trying to be all things to all people or worrying about what faction of the industry they will or will not offend, they are focused on getting one slice of this market, and using the medium to achieve that goal.

Not surprisingly, the existing market – the one who likes human interest stories, stories on the horses, or on the sport itself – are upset. On a thread at an industry website where the show was being discussed, some of these insider comments, after the initial show, were:

“Not enough interviews with horsemen and their thoughts”

“I agree with Brian…it was silly, childish and amateurish.”

“I too watched this show, I was very disappointed with the new format. I had to turn it off after 30 minutes of watching.”

“Please bring back the old format. The only people who want to watch the show are real Racing fans. The new show is painful to watch and will lose more viewers than it will gain.”

Woodbine Track Handicapper Jim Bannon

Seth Godin, a marketing writer who concentrates on new marketing and the changing world wrote this about the existing market in his book Free Prize Inside:

“Satisfied customers are not likely to increase your sales. Satisfied customers are not likely to push you and your colleagues to stay ahead of the competition. One day, in fact, the competition will pass you and the satisfied customers will quietly leave.

The problem is that management really likes those satisfied customers. The first question they’ll ask about any innovation is “Will our satisfied customers like it?” Of course, this is a silly question, because satisfied customers already like what you’ve got. The question you ought to ask first is, “Will people dissatisfied with what they are doing now embrace this, and, even better, will they tell the large number of unsatisfied people to go get it right away?”

We hope this provides a lesson for us in racing. We need to concentrate on selling the game to people who are not watching, instead of those who are. The people that are already fans are already watching, on computers, racing channels, or at the track. They do not have to be sold to with mass media, the people who are not watching and are pre-qualified to play a game are. In reality, we must do a complete 180 on what we have been doing.  If we do, perhaps we have a chance to grow.

This year, despite the often used excuse of “the economy” for racings ills, the Derby, in terms of both wagering volume and attendance were up. This flew right into the  face of conventional wisdom that the weather would kill attendance, and the lack of a big horse to draw wagering would hurt the handle numbers.

What happened? It is tough to gauge perfectly without seeing some back end metrics, and most certainly the last few years have been down, so year over year comparisons might be difficult, but I will take a shot. I think Churchill has learned to brand-market their big event better, and over time this has paid off.

There was hand-wringing on several initiatives from true blue race fans. I think these items are helping:

The Kentucky Oaks on Bravo. Some are upset that we are on that channel, because they do not cover racing like we want them to cover racing. The fly in that ointment is that we are not the market; we are going to watch it on Twinspires, or HRTV. This helps brand to a new audience.

The Derby Red Carpet chatter is another item that makes some players’ blood boil. I do not particularly care if a female movie star is wearing a yellow hat she paid $8000 for, or if figure skater Johnny Weir likes Ice Box, and neither do most of you. But some casual fans do, and this brands the event to them.

The Kentucky Derby Party website. We researched this item and spoke about it in February here at R2. My Derby party was two horseplayers, with three computers and two televisions, trying to make positive expectation bets. For others, who want to drink a mint julep and box four horses for some fun, this seems to be working just fine.

In addition to the above there has been a strong push on using social networks for this race and in fact, in all of racing. Being a web marketer I realize that this can be a hard sell to old business, and because we can not (but we are getting better)  measure what kind of revenue this adds to the bottom line with 100% accuracy, there are still many who find this spending does not provide actionable return on ad spend, and say a radio ad is still better.

Here are the news mentions via the web on for the Derby since 2004, via Google Trends (note, it will take some time for full searches and news mentions to show):

The reach for the Kentucky Derby website was at an all time high:

In addition via micro-blogging platforms like Twitter, the time per mention was one minute and the sentiment, good to bad was 6:1. Blogs had similar positive statistics, and news items were graded at 22:1 positive. These mediums are not going away. As a colleague said the other day, “If your company is not doing this, you are being professionally negligent.”

There are numerous problems in racing and most everyone seems to want them fixed overnight. But with brand marketing, according to marketer Mark Hughes, it takes 6 years and $60M to brand an event. If he is right, the Kentucky Derby is doing just fine and by doing simple web marketing and some cross promotion, it is not costing anywhere near $60M.

This simple principle of marketing happens with many successful ventures, and it tends to be often planned.

In Buzzmarketing, Mark Hughes speaks of the American Idol phenomenon. As most know, American Idol visits city after city, lines-up virtually everyone in huge lines (even terrible singers), offers press passes for local media for a behind the scenes look, and more.

One would think it would be much easier to schedule several days of auditions in LA and New York instead, and weed out some of the dead weight. They would still get a good crop for the show, and could hand-pick a few duds for the William Hung factor. However, they don’t do this because the buzz created by visiting each city, and having tons of people audition, is vital to its success. The people who audition will tell friends and family, and those friends and family will watch the show, and tell more friends and family. The local media buzz in each of these cities ensures human interest stories about the local auditions are promoted on TV, in print and radio, and then replayed on Youtube and other web-media outlets at a later time. If it was economical to audition in 1000 cities I am sure they would, because each city, and each person helps.

A show like American Idol was built to succeed from the very beginning, because of networking and foresight.

I thought about this for a time, and realized, did we not have the same thing happen with the biggest match race in thoroughbred history, War Admiral and Seabiscuit? In Seabiscuit, An American Legend, the author spoke of the zig-zagging train journey for the Biscuit between California and Maryland (in total he traveled over 24,000 miles by train in his career). Along the way the train would stop, and the horse would be greeted by regular folks, including a bevy of reporters. This of course provided built-in marketing for the race.

It was reported in the book that bookies in New York could not come even close to setting proper odds for the race, because “95% of the wagers were on War Admiral”. It seems the east coast had their horse, but in the end the odds were much different, and it is relayed several times in the book that the Biscuit was America’s choice to win.

Could it be because fans and media, at whistle stop after whistle stop for twenty-some thousand miles, saw and could touch their hero, and spread that message through their own networks like a virus that he was their worthy choice? Could it be that this race was the most listened to race ever, because of this old-time social networking? Was Seabiscuit (and the race itself) more popular than by all rights he should have been, because of this journey?

We are a month away from the Rachel-Zenyatta race.  We complain and lament that the major media is pretty much ignoring the race, not giving it the respect it deserves.  But buzz does not happen by accident. The few times it is not planned and actually succeeds, is the proverbial lightning in a bottle.

We certainly will not see Rachel and Zenyatta on a whistle-stop tour by train, but I would submit we need a metaphorical train ride and some planning of such, to make this event as electric as it should be. If we look to Seabiscuit – the match race marketer – we might all learn a thing or two.

The Cantor Exchange is one such place (it is waiting for regulatory approval). Scheduled to start trading in April, this exchange will focus on (among other things) a movie market.

“Soon, everyone —I mean, everyone — will be able to bet on the boxoffice, and make or lose lots of money on the outcome.”

They will be using the web as it should be: to viral market buzz. It is speculated that studios, as part of their advance marketing, will try and use a service like this to create buzz about a new film, making sure it is trading at a fairly high price. This would be nothing new. It has been speculated that some presidential candidate supporters have done similar on intrade in the past.

Markets like this struggle for volume, but with studios encouraged to participate (and creating inefficiencies at the same time), it sets the table for a ready-made market; one which the public will participate.

Betting via the internet has been left to horse racing alone in the past few years (legally anyway) and this is yet another new competitor for online betting dollars. With a foot in the door it is not out of the realm of possibility that Cantor can build a brand, economies of scale, and foster more and more political connections whereby if new forms of wagering are allowed for a trading market, they will be first past the post.

This, to my knowledge, is a first for the US in a very public way. In Canada, it was announced recently that governments in Quebec and British Columbia, are looking at online poker, so the ship appears to already have sailed north of the border.

It has struck many web observers who are race fans as flummoxing that racing has not used their monopoly to expand into some of these areas earlier this decade. Betfair had been growing with similar bets and it looked to be a revenue driver of some sort for racing overseas over 8 years ago. Using racings political clout to get regulatory approval for a betting market, where they could easily expand into Oscar betting, sports betting, presidential betting and so on should they get things approved as Cantor appears to have gotten done, would have given racing a new revenue source in North America. This would have been cutting edge of course, and in a growth betting sector, unlike slots money which is becoming watered down and older. As well, they would have already staked ground in the sector and if new entrants pop up they would have a hard time cutting into racings markets, because of the volume and goodwill gained by being first in the space.

It is water under the bridge now perhaps, however it still brings up a couple questions for racing.

* If Cantor can do this for movies, what stops TVG/Betfair from doing it for racing?

*Would some enterprising racing organization make a move in this sector, and could they succeed if they started right now by setting up a racing exchange? For example, if Kentucky is not giving racing slots, could Keeneland and CDI be approved for such an exchange as a political act of goodwill from lawmakers? With a built -in betting market and customer base (eg horse race bettors enjoy the chase and are much like other sports bettors) they would be far ahead of any onshore competition.

Those are clearly questions out of our scope, with this space guarded by myriad state and federal laws. However, if Cantor can get it done for something like box office receipts, perhaps this is something we should learn more about.

Case in point, the Super Bowl. Vanessa Fox looked at the top searches yesterday for the big game.  She learned that most people were asking the same question, “what time is the game?” In fact, with a little bit of datamining we can see each year this is the top trending search term on game day. However, as Ms. Fox showed, sites like NFL.com and CBS do not provide content as well as they could for this term, and voila – traffic is sent elsewhere. It pays to keep on top of these things as eyeballs are king, and our customers need to find our branded pages to get our message through.

If we look at overall searches for the Super Bowl, after the main terms are taken out, the following are top searches for the game and these can provide us with branding go-to items:

Super Bowl Parties

Super Bowl Recipes

Super Bowl Commercials

Every NFL site branding this game (or if you run a Super Bowl website) should have dedicated pages to these items. The Super Bowl is more than a game, it is branded as an experience. Parties, recipes and commercials should be promoted heavily.

Now, let’s switch to the Kentucky Derby to see if we can learn anything. These are not “near post time” searches, but overall searches:

This gives us some good clues, most of which those of us inside racing might know, but might not promote well enough. Taking gambling aside (sites like DRF handle those well) and looking at the masses, we can see just what gets them going about the Derby.

Kentucky Derby Fashion – NBC shows what horseplayers think are the “goofy” red carpet activities. This might be goofy to someone sitting at home watching race replays, building a track profile, and doing a dosage study. But it is not to the masses. Promoting the fashion angle is huge for the general public.

Parties – As Jess pointed out on her blog, parties for the Derby are cool (minus the picture of course).  “Kentucky derby infield” is also a search. There have been changes to policy via infield activities recently. This is an area that needs to be made a priority perhaps.

Packages/Travel – A big seller.

The response to this has been good from racing. Kentucky Derby Party has their own website, focusing on many of these issues. Notice the site is tailored to the female demo, and this is probably a good idea. The only suggestion is perhaps they should get that countdown clock updated; “Kentucky Derby Date” and “Kentucky Derby Time” are both key search terms. Showing “0′s” across the board on the clock – not good.

We often hear gripes from inside racing about selling the Derby (or the Oaks) along non-traditional lines. The searches seem to prove that this angle is not a waste of time – it’s built on sound principles.

As we go deeper and deeper along the tail we can see more and more searches which people are interested in, like “museum”, “pictures” and “memorabilia”. Tailoring web content to the long tail can help us get our message out.

As the race gets nearer we can use search to find the hot items, just like super bowl start time, and market to that. Search is a real-time focus group and we can use it to our advantage.

This takes care of a big day, like the Derby. But what about small tracks running each night, or races like the West Virginia Derby and others of a similar ilk? Seeing what your on-track customers are searching for can help you make these events better, and it should be part of each tracks market research.

Creating a Facebook page for a three word message seems ridiculous, however the ridiculous sometimes works – “I’m with Coco’s” avatar FB page has 318,000 fans, in about a week.

I remember thinking of starting an “I’m With Frankie” Facebook page when Magna was going through some trouble, but I was cautioned by many that it would probably have fewer followers than a Bernie Madoff Fan Club page. Upon further reflection, I think they were right.

I read recently that CDI has secured a deal to get Kentucky Derby prep races shown on NBC; they will be paying a couple of million for the prep-race infomercials. It’s no surprise I think this is a poor use of funds, as I believe that selling to the masses, or preaching to the choir will not help us in the long-run. I know many do not agree, and that is fine, however some of my reading this morning makes me think I might be on the right track:

Online television station Revision3 offers the aforementioned Conan O’Brien a job. Online stations are gaining more and more market share, specialty stations are as well. I personally liked the CDI deal with Bravo as it speaks to a newer market and racing can be shown in a different way – that is fine. But hammering old-network TV and having to pay for it? Not fine, in my opinion.

Second, Michael Learmouth at Adage has a feature on web tv and the possible loss of cable’s/network’s market share. He believes that within a few years cable companies, and the way we watch TV in general will be forever changed.

Some quotes: “At the annual Consumer Electronics Show in Las Vegas, cable operators got a look at a device that could start to eat into another core business: TVs with built-in Skype access. LG and Panasonic announced partnerships to start shipping the sets later this year.”

“….. customers are cutting back on cable bills: while rates go up every year, the average amount consumers are paying for digital cable dropped from $79 a month in the third quarter of 2008 to $70 in the third quarter of 2009 as they drop additional channels and services,”

“Parks Associates estimates that the consumer electronics industry will sell 80 million net-connected TVs by 2013, and there are already 20 million net-connected Xbox consoles in circulation.”

I think spending a couple of million on what we will be doing tomorrow, is better than spending that same amount on what we will not be doing tomorrow.

Then again, that opinion is what it is. Remember, I did want to start a “I’m with Frankie” Facebook page. :)

Bing wants partners

If you are like us, getting race results, historical data, replays or pretty much anything else to do with racing is a maze. Equibase is the central de facto source, but DRF has results, as do ADWs. Sometimes YouTube has race replays, sometimes ADWs do, and sometimes track web sites do. One stop shopping? Hardly. Half the time I do not even know where to go, whether on my desktop, netbook or BlackBerry. In harness racing it is as bad or worse, with several data publishers moving in seemingly different directions.

Search engines can fix much of it. And for other sports, they have done just that.

In the UK, Google has partnered with soccer to give flash results, stats and more. If you search for a soccer team — in this case Arsenal — you immediately see the past results and the next game. In addition, you can drill down to see stats, historical results and so on:

This has not gone unnoticed across the pond. Google has done the same for many major sports in North America.

Microsoft’s search engine has joined the fray of late, trying to be a player. They are fighting for market share from search giant Google and they have spent oodles of cash on web marketing, partnerships and scores of television commercials. Slowly but surely they are increasing search market share. Just this past week they announced their excellent real-time NBA search algorithm. Others are doing this, like Google, but Microsoft plans to go one better.

Here is a screen shot when you search the LA Lakers, courtesy the Bing Blog:

How about searching for a player like Lamar Odom?

I hope this has piqued your interest, because it sure piqued mine.

R2 contributor Jules Boven, Marketing manager of harnesslink.com, wrote an article about this concept, creating a mock-up of what this would look like in Google for a harness horse named Arch Madness, the 2007 Breeders Crown Champion trotter. All you have to do is type in “pp” and the horse’s name, and voila!

So, whether you are at a restaurant or at the track, and you want to look at the trip notes for a horse coming up in the sixth, or maybe you want an easy link to a race replay without logging into your ADW and waiting and waiting with slow bandwidth, or maybe you want a horse’s last running line because you see something on the simulcast channel that catches your eye, you would type your query into a search engine, get the results, and then maybe make a play.

In addition, this could revolutionize the way data is stored for racing. We have not done well at all storing our history. This might be a way to start such a project.

If I were racing, or if racing had a central authority, I think I would be looking into a partnership not with Google, but with Bing. Working historical results, video replays, blogs and more into the search engine, just like other sports have done, would have to help us. Bing could be the search engine of choice for racing — and racing would give back by promoting it as such. And we do have a lot going for us in this regard. Racing is a data-rich game; making Bing the official search partner would surely bring them a whole lot of eyeballs, which is exactly what they are searching for.

Is it a win-win? I think so. Is it doable? I do not know, but if other sports can do it, I think we should be looking at partnerships like this in racing to help brand us for 2010 and beyond.

I was browsing this morning and I found a perfect lead-in to such a discussion (I thought it was anyway), vintage ads. Today on his fine blog, Seth Godin pointed us to a vintage browser which sweeps ads from yesteryear. I found some for racing.

* Cadillac (pictured) – This ad is from 1927. They used to sponsor the Breeders Crown in the early 1990′s. I do not associate their brand with harness racing, but someone there did. With the big four car company problems, I imagine we won’t see them back.

* An “Early Times” Bourbon ad from 1952 – A couple of guys watching a horse work in the morning, and presumably drinking “Early Times” bourbon. That gives whole new meaning to the phrase “it’s 12 o’clock somewhere”.

* Dayton “Thorobred” Tires – From 1965

To look at more vintage horse racing ads, they’re here.

I thought it would be good to address a couple of the comments in a new post. Thank you to everyone who commented.

First up, John Pricci of Horse Race Insider says:  “I have been trying to sell to friends in the business a new handicapping paradigm that dovetails nicely into your message.”

Me: John, we are certainly interested in hearing more. I was on a panel awhile back where there was a former engineer who developed a really neat system that could be automated for horse racing – in effect a neat way to bet that would bring in a new trader-type bettor, concerned with beating the game in a different way. I was impressed with that and thought it was something we should be doing more of.

We have spoken at times here on the tools that betfair has offered customers (eg API’s and apps) which have brought a new player to that platform. E*Trade and other online trading companies offer a lot in the way of bells and whistles for the market too.

Second, “Cavonnier” offered an excellent comment with a way to split the markets – we keep the higher takeout exotics, for life-changing scores, but we open up fixed odds betting at a low take.

“Racing currently cannot compete with what I believe to be its closest competitors–poker and sports betting–on price. All things equal, wouldn’t a rational consumer rather bet into a pot with a 5-10% rake, or bet with a bookie with a 10% vig?” he/she wrote.

He/she continued: “What I’d like to see:  Most money wagered on horse races in North America is bet into exotics pools. For price sensitive customers, how about fixed-odds win wagering with a 10-12% takeout? (It CAN be done, according to this column. Those who would rather aim for a windfall score could continue to bet into the exotic pools, and tracks could keep those takeout rates higher. I think this would be a good compromise between the price-sensitive horseplayers and track management/horsemen who are worried that drastic takeout cuts would negatively effect their bottom lines.”

Me: That is an awesome comment. One part of the lure of horse betting to the thinking person’s lotto player is the life-changing score, and the players who play for these pick 6 type scores are puzzle players, but probably not as price sensitive as others (although 25% in my opinion is leaving money on the table – some lotteries are offering low takeout because it makes more profit) . This splits the market into two, not unlike betfair did with their exchange. Not to mention a huge customer complaint is late odds drops and this virtually fixes that problem. If we really wanted to juice the WPS pools I would argue that a less than 12% take would be preferred (people would churn more and perhaps last a long time) but it would be an excellent start.

Third, Josh Potts believes that the NTRA is not the best organization to serve each track’s market, but does believe they have a vital role: “Now, in addition to some industry-wide promotion, the NTRA can help with some market research. After all, we need to know a great deal of information about these puzzlemasters: what do they read, how do they spend their free time, what products do they buy, what causes them to buy a product or service, what makes them spend/invest money, what do they watch on TV, what types of radio do they listen to, what do they do on the internet, etc. etc. etc.”

Me: Nice stuff Josh. I had not really thought of the role of the NTRA in this too much. I know they are looking at polling customers, and have for some time, but they are polling the mass market, or existing market it seems. In my premise, focus groups are pretty useless – we are after subsets of all markets, some of whom are not interested in racing and would never answer that survey/poll.  Your point on metrics is solid, in my opinion. I am a big believer in data and using that data to point us in the right direction (Supercrunchers is a fabulous read on that).

Fourcats wrote: “However, a major stumbling block is that horse racing, unlike the successful companies that you cite, is controlled by multiple entities with different agendas (state governments, racetrack owners, horse owners, horse trainers, etc.) It is extremely difficult (though perhaps not impossible) to define a consistent message about horse racing when there is not just one “management team” in charge.”

Me: The elephant in the room. Racing has more acronyms and more opinions than the UN. As I spoke about in the original post, getting people on the same page and speaking with one voice is probably a wish that is tantamount to Santa and the Tooth Fairy being in my office as I type this.  However, I think back to about 1999 where, when looking for business ideas, a friend and I thought of devising and selling a “Web Traffic in a box” idea, along with a “PR in a box” system for public companies. When I look back, many of the same principles then (with modifications, and innovations of course) apply today.  What if we had this general direction set by an NTRA type group, and this “Racing PR in a box” was filtered throughout the system as a marketing go-to guide?

Second last, Maury and Titletown say that without a drop in takeout, people will not play the game in huge numbers. I cannot argue too much with that.

Lastly, Michael says: “While it is true that the puzzle aspect of the racetrack experience is compelling and motivating, other factors do drive some folks to visit and return. Some people enjoy a day in the fresh air, at a beautiful place, seeing people they know and like, all the while trying to solve the puzzle. I wonder if the game (the puzzle) can long endure without people who are attracted to the look of the horse, the green of the grass, the electricity in the air. Of course, not much of that exists at Aqueduct in December, but some of us persist.”

Michael, thanks for the comment. I do have to say that I disagree with that for the most part, in terms of promoting the game. I believe that the game itself breeds a following of the sport, and the people who  want to play the game will come out to the track, but I do not believe it is the other way around. I think society has changed, forever. Five hours at a racetrack is 1970, not 2010.  Does that mean we should not promote what we all love about it (I am a cold-hard bettor, but absolutely love everything about the racetrack, just like yourself), and throw in the towel? No, in my opinion; we can still do that, as it does attack a subset of the market. But I do believe that the game trumps all if we are thinking big, not incrementally.

A couple of quick examples, which I have noticed. One, here is a young fella who was a computer science major who discovered racing on betfair. He had never been to a race in his life, but he learned to play racing. He now goes to the meets in the UK and is a fan – as well he brings his friends.  He seems to enjoy himself. A fan for life? I would submit yes, as long as the game keeps him coming back. He bets millions a year and blogs about it; we can’t buy that type of promotion, in my opinion.

Second, I look at the NFL. Almost $2B is spent on fantasy football. Playing the “game” of fantasy has bred a new fan, one who watches the game religiously, spends money, but rarely goes to games.  At one time in the early 1960′s the NFL was perplexed about television. Many owners did not want to embrace TV because they were worried about the live gate.  Television bred a new fan, and the game exploded. It was obviously the right decision (the vast majority of NFL revenue comes from off site activity), and today there are many fans who have only seen a game on television that pay hundreds and sometimes thousands of dollars for a hot ticket. Tailgating is fun and a part of football, but not something to build a mainstream business on, in my opinion.

I believe that if we take care of the game, the game will take care of us.

Thanks again for these excellent comments.  Whether you agree or disagree with the piece is not important – in fact as I think the comments showed, those who disagreed had some great things to say. That is a good thing, not a bad thing. We need a lot of thinking to help racing grow, and I doubt there are any easy answers.

If we look at business history there are numerous examples of successful companies who have positioned themselves and stuck with that positioning message:

• Walmart positioned itself as a leader on price. Low prices are what we think of when we hear the name Walmart.
• Mercedes positioned itself as class, power, speed and excellence. It is not a car, it is an experience.
• In an often used example, Avis positioned itself as the “#2 car rental brand,” but said “we try harder.” That resonated with people (they stood out by saying they were not #1) and positioned them as a can do company who wants your business.
• In 1969 Coke’s slogan was “the real thing”. They were a part of Americana and that slogan was embraced by their customers. In 1985 when they became “New Coke” and directly challenged that position in a consumers mind, we all know what happened. It was a complete disaster, one which they were forced to rectify within three months.

According to the authors, there are six questions related to positioning, and if you cannot answer these questions, you are in a heap of trouble before you even start:

• What position do you currently own?
• What position do you want to own?
• Whom you have to defeat to own the position you want?
• Do you have the resources to do it?
• Can you persist until you get there?
• Are your tactics supporting the positioning objective you set?

So, does racing position itself properly? Let’s ask those questions as they pertain to our sport.

One, what position do you currently own?  Ask 10 people in racing, you will get 10 different answers.

Two, what position do you want to own? Again, ask 10 people, you will get 10 different answers. Some want to own the family market and do on-track promos for families. Others want to own the college kid market, by offering bands after the races. Some want to sell us as pure entertainment (just look at almost any racing commercial ever made — a gaggle of people watching a horse race and cheering). Others want to sell us as pure gambling, and to somehow get those slot players over to bet racing. It is not a question of what we have a chance to own, it tends to be a question of what we wished we owned, almost in an utopian way, or wholly dependent on what faction in racing you represent.

Three, whom do you have to defeat to own the position you want? Sensing a pattern? Again, 10 different answers from 10 different people — we must beat slots, lotteries, poker, pro sports, and so on. Pick a number, any number.

Four, do you have resources to do it? With hundreds of organizations all with completely different visions of what to do, this one seems tough to even begin to answer. We probably have the resources, but in no way have a vision.

Five, can you persist until you get there? With handle falling and no real plan emerging, it is hard to be confident.

Six, are your tactics supporting the positioning objective you set? I think the above shows we have not even been able to set an objective. If you have no objective, your tactics are probably not very good.

I think it is fairly safe to say that racing has failed in positioning itself properly. The question we might ask is: Is it too late?

Several years ago, former marketing executive Gibson Carothers wrote an article that won an honorable mention at the  Eclipse Awards’. In it he said, “It’s amazing how many advertisers confuse their real market with the market they would like to have. In all my years in advertising, I can’t recall a client [racing] who was so conflicted about its own product.”

I think he is 100% right. We do not know what our product is, and if we can not define who we are, marketing spending is perfunctory at best. We all wish we could market to everyone, we all wish racing was mainstream and on cereal boxes or prime time television, but what we wish for is irrelevant, it is who we are that matters.

It seems that spending money to have racing shown on television like some organizations do, or spending money without a plan — marketing to the mass market without a proper positioning message — is futile. But what should we do? That is the million dollar question. In my opinion, I agree with Mr. Carothers — we must position racing as a thinking man’s (or woman’s) lottery — and all else be damned.

Going back to a couple of our six questions:

For the “what position do we currently own” question (or want to own question), we do have a good shot to own one with my premise. How many times have you seen a horseplayer make a score on a longshot where he tells you the methodology of his pick, like he just cured the common cold? I bet you have heard stories like that countless times. Now, how many times have you heard a lottery or slots player speak of the methodology behind how she bought a ticket, or hit a button on a slot machine to make a score? Never. It takes no skill, and they will show no pride when they win. They are simply happy to say that they won.

Racing is a puzzle, and people who enjoy racing are puzzle-masters. Poker has taken a pile of this positioning away from us (notice they market themselves as a thinking person’s game) but I would contend we need to own this market. Regardless, I believe trying to sell racing to people who get a kick out of hitting a button, or playing numbers will not increase our market share.

For those who would say concentrating on one type of customer pigeonholes us, I would say that is unimportant and in fact the antithesis of what successful companies are doing in this century. Trying to be everything to everyone has failed us, so why repeat it? As well, I do not think we should sell our game short. I remember having a nice dinner at the track last spring. Beside me was a newbie and she was learning to play the game from a regular. She immediately took ownership of the puzzle in front of her and picked two show bets that cashed in a row. The pride on her face was delightful to watch. When that newbie comes to the track to play the puzzle and not for a free cap, it pre-qualifies her and others to play the game — the game we are selling. Why would we want to sell the game to people who won’t come back?

By targeting our marketing to the subset of people who are likely to enjoy the game, we improve our return on ad spend. For example, in internet marketing we can spend money and drive traffic to a site – that’s easy. But if that traffic bounces out and does not return it is wasted traffic and wasted money. Bringing people to the track who are not pre-qualified to come back is equally wasted marketing spend. That might sound like common sense to you, but it is the exact opposite of what we are currently doing.

How do we get at these people (and this gets to the other three or four questions)? I think by honing our message to a targeted customer. Just like Mercedes sells their cars as an experience, and not on their gas mileage, or kids seats, we sell the puzzle and the game, to the people who enjoy such pursuits:

• How many times do we hear that we should be selling the horses, like a match race between Rachel and Zenyatta. In contrast, how many times have we heard we should be selling the intricacies of completing the puzzle, on who will win between the two if they met? We need more of the latter and less of the former.
• How many times do we see an ADW offer a clock radio for a gazillion “points,” somehow selling us like we are a Costco or drugstore points card customer? In contrast, how many ADW’s give the puzzle-player cash rewards to help them have more money in their bank to continue playing the game instead? Cash rewards equal a better chance to win, and more customer loyalty to continue to improve their game playing. If they want a clock radio they can use their winnings from the fifth race and stop at Walmart (there are low prices there, remember?) on the way home.
• How many television features go on and on about a human interest story about a horse, the caretaker of the horse, or the owner of the horse. Instead, what if we analyzed speed figures in the upcoming race on the horses, complete with showing fair odds lines, to help a player generate profit from her puzzle solving? It again goes back to the “throw stuff against a wall and hope it sticks” marketing plan, rather than honing the simple game playing message.

I think by deciding on, and sharpening our message, we can do better.

In another piece of fine marketing writing, the authors wrote,  “Success often leads to arrogance, and arrogance to failure.” Racing was once successful; people flocked to the track by the millions to watch and bet racing. But it was built on a house of cards. Patrons were not there because they loved us or that we were doing everything right, they were there because there was nowhere else to go. We were a monopoly and we lived the high life that often comes with being one, and that did breed arrogance. Because of this, I believe we have erroneously decided that racing’s loss of market share is not our problem, but the problem of the general public, for not seeing us like they used to. The reality is that they never saw us like we think they did. And that is our problem, not our customers’.

We are never going back to the days of old with packed grandstands — it is pure folly to think that. In 2010 and beyond we must compete and win, by being what we are. Knowing who we are, honing our message and marketing to that message as a singular mission is one way to perhaps help racing. Marketing to what we are not, or what we wish we were, will only worsen the problem.

The good news is that repositioning can and does happen. Honda was positioned as a motorbike company in Japan years ago. When they tried to sell a car to the Japanese market they were crushed, because the Japanese consumer did not want to buy a car from a motorcycle company. But they entered the US market with a new “position” to a new market. They used the fact that they were a cutting-edge company who made great products as their major message, and did not deviate from that message. It was ingrained in the minds of the American consumer, and the rest is history.

I think the time has come for a repositioning of racing. Marketing to the mass-market is a concept that should be shelved. I believe the NTRA and others should work on an industry wide marketing program that filters from the top, all the way down to each track and organization. It will have one simple message: Horse racing is a game ……. and you will have the time of your life playing it.

This article was written by Dean, one third of the r2collective. He is a Toronto-based marketing professional.

“If you’re in a low trust industry (like car sales), a social media presence dramatically increases the opportunity people have to call you out, beat you up, tattle on you and flame you in public.”

Come again?

Seth thinks this does you some good, because by doing it you build trust.

Dan Silver, NYRA’s Director of Communications and Media Relations seems to agree. NYRA, under his direction, along with NYRA Director of Marketing Neema Ghazi, has embarked upon an ambitious social media and web campaign to gain trust and hopefully improve NYRA’s business. In a recent chat with us he highlighted some of the things they are doing, and the thinking behind them.

“Every possible new media is being looked at” he said. “We have a very large email database, and keeping fans informed with email has been the norm. Now we use our database for other things like Facebook and the Serling chats.”

NYRA’s Facebook page has well over 3500 fans and Dan and the team use Facebook for events, news and feedback.  Sometimes that feedback is of the glass jaw kind, but that does not seem to stop NYRA.

“We get negative feedback but we try to answer those questions and criticisms. We do not run away from them”, says Silver.

Dan seems to think, like most in racing, that Twitter and Facebook’s value lies in handicapping information, and informative real time use.

“The Andy Serling twitter page has been a success.We also have the Andy Serling Friday night chat. The first night we had almost 500 fans log in to answer questions. The Breeders Cup chat was also well attended.”

Maybe they are brothers?

NYRA has also started a blog with behind the scenes information from their tracks. It is not your everyday corporate blog, because the team knows that is not the right approach. They try and make it fun and engaging, like the separated at birth photos they run with famous NYRA regulars and their long lost lookalikes.

As we know as web marketers, often times companies have grand ideas, but do not put forth a vision, devote the people needed, or the money needed to give things a chance. As well, often times management is not behind anything new unless it shows immediate tangible ROI.  NYRA does not seem to fall into that trap. To promote the chats, facebook pages and other web-centric ideas NYRA is spending money; namely on banner ads via various industry websites. In terms of a 2.0 workforce, there is a team behind the effort. It is not a one or two person show.

“We have plenty of people to work the mediums”, he said, “and we are fortunate that we have Charlie [Hayward] and Hal [Handel] behind us on this. They are supportive and know growth will not happen overnight.”

One important area that Silver believes they might have to improve on is web metrics. Data mining and tracking customers through funnels is vital and he thinks more time needs to spent on this to learn what is working.

It seems NYRA is on the right track with their web marketing. One of the most, if not the most difficult part of doing this for racing, is that gaining fans sometimes does not mean an increase in revenue. For all of us who follow the sport, and these efforts, that is the elephant in the room. Bettors are what drives that revenue and converting them from fans to players is paramount. For that Silver seems to lack worry, as he believes that trying to grow the grassroots (and giving them an avenue to join racing as a player like they do on their marketing properties with links to NYRA’s ADW for example) can pay for itself in the long run.  But he is fully aware that the long term goal is gaining revenue and market share.

Time will tell if NYRA’s plan will work, or only a be a minor part of NYRA’s ongoing marketing efforts. However, for an industry which is almost always reticent to try something new it should be welcomed by most.

Rule 1 – Hook Your Customers on the Media

“…… retailers could let customers know at point of sale that if they become a fan of your business on Facebook, they’ll receive exclusive offers for discounts on future purchases. Or customers could be given instructions to tweet out a special hashtag with a message about your store after they follow your Twitter account”

When we provide value, we get back value. It is why this is so very important for customer relationship management. I have yet to see an ad on a track feed saying: “Join us on Facebook. Tell us what you think we need to do better, we want your input. Join the conversation!” Maybe there is one, but I have not seen it.

Racings customers are screaming to be part of the conversation, and we should be doing a better job giving them a voice.

Rule 2 – Concentrate on Building Your Community

As O_Crunk and others below have commented – being a part of something and ditching the hard sales come-on’s is paramount for this.

“…….. the trick to retaining them as customers is to keep them wanting to come back. That means constantly engaging them with new content, exclusive offers and information they can’t get elsewhere. The best way to grow your community is to consistently offer them quality content. That means forgoing the sales pitch most of the time.”

In a word – respect and listening, which we tend to not do enough of in racing, in my opinion. Others do, and they are winning the fight.

Jet Blue is an airline – one with 1.5 million followers on Twitter. Why? Community building. Just yesterday for example, a customer tweeted to Jet Blue that his mom got him an ornament for his tree this year. The kicker is, it is a Jet Blue plane ornament. The customer went so far to post the tree ornament’s picture on the web for everyone to see. Jet Blue read it and they replied. This type of interaction has done them wonders.

For racing: What if youbet.com used Facebook to have a wall of pictures on “near misses” – i.e. screenshots supplied by some of their customers of tickets that just missed. Everyone loves to share bad beat stories. Maybe he missed the last leg of a pick 6, or she got nosed out of a $5000 superfecta in a really bad luck way. What if once a week youbet refunded the price of the ticket and sent the bad beat customer a hat or a shirt, for winning the bad bet of the week? I bet they will tell people, as well as feel appreciated, knowing that the company they are a part of wants to see them do well. I think things like that are a vital part of building a strong community.

Rule 3 – Play Favorites

I don’t think this  means bet the Levine horse off the claim this week at 1-5. But it does mean something important: “Social media is a great place to promote your general sales and events, but you should also consider offering your social media fans exclusive deals that cannot be had elsewhere.”

For racing? I dunno, how about a special coupon for Churchill under the lights? How about a unique, time limited extra points offer for Youbet Rewards exclusive to social media followers? Using your customers to be mavens, and work for you to help other customers is simple WOM marketing which works both on and offline.Value is provided for both of you.

I recently saw a post at Paceadvantage.com where a Youbet customer received some free stuff at Keeneland. He was floored because he does not bet too much. He told the world.

“[Youbet] did something nice for their customers yesterday at Keeneland. Since I’m guessing I am one of their least significant accounts and still was invited I must assume the offer was open to all account holders. My wife and I were planning to be at KEE anyway so this was an unexpected bonus.

At a minimum they gave each who attended free admission, good grandstand seats at the finish line, $10 food voucher, $20 wager voucher, track program, and entry to a drawing for a TV. The couple of YouBet reps I had conversations with were very nice to deal with. All in all, it left a good impression.”

These building blocks are not complex. It is simple business using a new medium, but one which spreads WOM faster than the old days. Without a plan it is doomed to fail, but with one it can succeed and help us help racing.

I am sure anyone reading has their own ideas on how to use the medium, what offers to offer, what way is best to engage bettors. The above are a few examples off the top of my head. If anyone has any to offer, fire away.

Notes – The Twitter chat has been enlightening and fun below. A news item today  – Dell rings up $6.5M in sales, attributable to Twitter, or so they tell us.

Also via Twitter, Colonial Downs offers something to only their Facebook fans. Interesting days indeed!

Many of the commenters relayed the belief that racing being a skill game prohibits this type of idea from working well.   That point is probably valid, but Brad’s point should not be lost on us.

When you offer bettors choice, you usually expand your market.

In consumer markets this is tried and true. Repackaging a product increases sales. Those neat cheese sticks or pudding pops were not invented because the company making them got bored, they made them because they will sell more cheese and pudding. Many times consumers will think company’s who offer more choice offer higher quality.

In 1986, William “the refrigerator” Perry was playing in the Super Bowl. Coach Mike Ditka said before the game that he would not carry the ball in the Super Bowl. The fans argued “would he or would he not?”. The casinos in Vegas saw an opportunity: They offered a 20-1 prop bet on exactly that. They noticed their fans were riveted to the game, for that one simple prop. Proposition betting was born and it is now a huge item for casinos. *

The demographic is clear for racing – racing is a skill game.  One way to offer those risk taking, thought oriented bettors choice is by in-running betting. Offering choice to these bettors is something that has been done at Betfair for years now, and although it is not massive volume, it does encourage more play from a slightly different bettor.

Real time example of inrunning betting

As is shown at this link real time betting is shown for the Melbourne Cup (wait for the video to load, then watch the betting action, with descriptions). It shows the uniqueness of this type  of betting.   Anyone who has ever bet a race has said “that horse is live I would love to bet him.” Well with this type of betting, now you can.

Currently we are exploring choice in the North American arena. A casino in Las Vegas is looking at in-running betting, the Breeders Cup had a jockey prop bet which took action, some casinos run Derby, Breeders Cup and more in the futures market.

As long as there is pool size, or action, this does and can continue to market the sport to new markets.

Choice is a very good thing, if done correctly and with the customer in mind. Just ask William Perry.

* Source: Canadian Gambling Business October 2009

At slots tracks like Hiawatha, admission is free, but for the fest admission was charged. They got about 12,000 paying folks to come out for the three day event.  The demographics were good and they were who racing does want to attract. It was almost a 180 degree shift, with  people under 40 represented as much as over 40.

Demo's for Adrenaline

Attracting a new market, of course did not up the bet – newbies play a couple bucks to show here and there – but the customer experience was satisfying for many of them and they said they would come back. In addition,  as an added kicker for satisfaction, track regulars were pulled aside and let in free, for a bit of goodwill.

Maybe you are now saying “Great, they spent a pile of money and got a few more people out, and those people did not add to handle. What’s the point? Why would a track spend all that money to get such little bang for the buck?” I would answer, that is my point exactly, and why I think that charging admission for special events at tracks is the wave of the future.

First off, racetracks are unlike many other businesses. If you build a motorbike, the suppliers of the product get paid for their product and you build and sell and market the bike and reap the rewards from that. If you have a football team, the suppliers (ie the players) get paid to play. They don’t get 50% of the gate, or what have you. In racing, tracks make 50% of the wagering revenue and the suppliers of the product (me as an owner, or you as a groom or trainer) get the other 50%. Clearly unless both sides work together very little gets done. What happens if little Sarnia got a $10,000 bump in handle for the event. Horsemen get about $1000 of it, and the track gets $1000. Whup-tee-do.  Why would a track invest big money in something for half the revenue back, and why would me as a horse owner do the same? Since we rarely work together in racing, well, very little gets done. A pox on our house.

So, if a slots track does not care what the bet is, how do they increase revenue? By getting cash from the gate. And to attract people to the track we have to do more than put a few brown horses and some colorful jockeys on display. We need to add value to make the high admission price worthwhile.

Long ago in economics class we studied the case of a grocery store manager who was getting sick and tired of seeing his carts not brought back. So he added the lock, where the patron would put a penny into the slot, and got it back when they brought it back. Immediately all the carts we brought back to the front of the store. When people pay for something and perceive it has value, they change their behavior. Churchill Downs charged a big admission to their night racing, and changed people’s behavior.  Regular Churchill fans  went nuts and were annoyed at the charge, but they could be worked around. The general public  perceived value and showed up; they paid, they ate, they drank and they stayed the whole night to watch racing. By all accounts CDI did well, and racing did well. It was a success.

Because on track fans, there for the entertainment and amenities, are very different from the core horseplayer, there was little cannibalization. This was a market expansion, not eating our young.

I think we will see more and more of this, as it makes economic sense; in fact, for attracting new fans it might in fact be the only thing that makes sense. Andy Beyer once said that racing is one of the only businesses in history who thinks that the laws of economics do not apply to them.  There is no doubt that we have to fix the morass of simulcast contracts and high takeout which have killed us as a gambling game. But until we do, going after new markets with racing putting cash into a new improved track experience (and charging for it to make it a worthwhile cash stream), might not be a bad thing at all for the game to embrace.