Differentiation through technology.
That’s one of the corporate objectives set out by bookmaker William Hill CEO James Henderson. It’s an understandable goal given the increasingly competitive market on which the firm operates. We’ve written in the past about the digital bets being made by rivals such as Paddy Power and Ladbrokes and William Hill is no different.
The firm’s seen some winnings. Online net revenue grew 18% in 2014 to £527.4 million with gaming net revenue within this growing 17% following a year of no growth in 2013.
William Hill management attributes this resurgence to investment in mobile gaming which grew 117% and now represents 32% of gaming net revenue, at the same time as desktop gaming net revenue fell slightly by 3%.
The firm had previously set a target for mobile to make up 40% of online gaming by the middle of 2015, but in fact it hit that goal in December 2014. Overall, mobile increased to 43% of online net revenue in the year with sports up 48% and gaming up 117%. Mobile made up 56% of online sports revenue and 32% of its gaming.
So, that’s all good and encouraging, but it doesn’t address the differentiation issue, as mobile is also top of the to-do list at every one of William Hill’s rivals. Henderson acknowledges:
It's very difficult to differentiate yourself technology wise in our sector because one way or another a lot of our competitors use the same technology stack. It's not about getting rid of third party suppliers; it's essentially reducing their reliance.
There are 22 elements of a technology platform and the more suppliers you can use within that, then obviously you are providing a more unique experience. So it's not about taking full ownership of it but it's about reducing the reliance on third parties.
Due to previous ‘organic’ growth of the firm’s tech investment, the firm is currently running off four different platforms across retail, online, the UK and Australia. What’s needed now is more flexibility, argues Henderson:
But some elements are already falling into place:
We want to enable all parts of the Group to benefit from our innovations. We want to be able to bolt-on acquisitions quickly and easily. And we want to keep our options open for routes to international expansion. We're looking at what that means in more detail at present.
We're continuing to develop our Central Feeds platform. We launch pre-match first and then onto in-play. The engine is OpenBet whose core capability is in back-end development. We're moving to take control of the front end which is not their strategic focus. The approach we've taken is inserting an API layer is key.
Project Trafalgar is the front end framework and we're building on top of our API layer. That will give us control over the display format for mobile and ultimately for areas such as retail display, thereby allowing us to ring fence the back end which gives us more options, control and flexibility.
We're rolling that out during the course of this year. It will give us a fully responsive site, but importantly a site that's also quicker and more stable, and the team will be able to make daily releases and changes based on consumer testing.
That responsive element is vital of course when running across multiple mobile device platforms. Henderson says:
Going fully responsive is a huge improvement on where we are at the moment. So it doesn't matter what device you are, they all configure in a way. I was over in Gibraltar last week and the guys were taking me through exactly what that means. We have what they call them all in hidden live at the moment.
So all the things are there being tested and making sure that it's fit for purpose when it rolls out in the middle of the summer period. So it is going to be a huge change; it does make it faster; it does make sure we can, as you say, make changes on a daily -- any basis based on AB testing. So it's really going to be a fantastic technology improvement.
And underlying everything is the need to enhance the customer experience. Henderson says:
The overall system is underpinned by our own data warehousing development which will amalgamate all our online databases to give a single online customer view which, amongst other things, will give us greater access to data for responsible gambling analytics.
As I said before, our approach is to mix the best of breed third party systems with our own proprietary systems, thereby allowing us to differentiate and provide a unique customer experience.
In a market where there are lots of potential service providers, the one that offers the best user experience has better odds of success. With that mind, William Hill’s strategy is pressing a lot of the right buttons. But with so many runners and riders in the market, this is a long game to play.