Weekly pokerpulse analysis (very slow growth, Party & Crypto nice week

[Uglyowl]

Another slow week of 0.24% growth. Pretty dismal, but it was college graduation weekend and all. Next week we have Memorial Day weekend, so it will probably be two weeks before we really see where we stand.

PartyPoker bonuses seem to add about 8-10% to the player base temporarily, but then we see a decline right after.

Everyone else pretty much stalled with Graduation weekend, except for Crypto which added 7% while they had the 300 hands for $30 at Interpoker. These guys have been doing a great job adding players.

Pretty boring week, have a little more next weekend, but expect another pretty dull week.

Current 4 week poker growth rate: 3.46%

EDIT to add monthly growth rate

[GrannyMae]

PartyPoker bonuses seem to add about 8-10% to the player base temporarily, but then we see a decline right after.

bonuses seem to help every site with traffic.

however, they must not be as profitable as most would think though or we would see more of them. paradise and stars are very tight with reloads. if reloads were a wash or even slightly profitable, they would do them monthy. seems more like quarterly with those 2.

[Running Bad]

For Crypto, is it possible to separate the newly added low limits (.5/1 and lower) from the higher limits (1/2 and above)?

All the extra Crypto action may be in the new limits.

[Uglyowl]

[ QUOTE ]
For Crypto, is it possible to separate the newly added low limits (.5/1 and lower) from the higher limits (1/2 and above)?

All the extra Crypto action may be in the new limits.

[/ QUOTE ]

Great point! Forgot about those new low limits.

Also Party has offered a reload monthly for the last 7 months, while Pokerstars is quarterly.

For new sites reloads are a must to build traffic, in my opinion. For established sites I would imagine it is only marginally +EV.

[Punker]

In 2004 Stars had 8 reload bonuses (6 for 20% and 2 for 25%).

[RunDownHouse]

[ QUOTE ]
PartyPoker bonuses seem to add about 8-10% to the player base temporarily, but then we see a decline right after.

bonuses seem to help every site with traffic.

however, they must not be as profitable as most would think though or we would see more of them. paradise and stars are very tight with reloads. if reloads were a wash or even slightly profitable, they would do them monthy. seems more like quarterly with those 2.

[/ QUOTE ]

You seem to imply that bonuses earn a negative return - they aren't even a "wash" - but if that were true, other sites, like Absolute, wouldn't do them at all or would do them much less frequently.

The only way to explain the difference in bonus frequency that I can think of off the top of my head is that less-frequent sites like Stars believe that other investments, like TV ads, can get them a better return than reloads.

[GrannyMae]

The only way to explain the difference in bonus frequency that I can think of off the top of my head is that less-frequent sites like Stars believe that other investments, like TV ads, can get them a better return than reloads.



then you are contradicting yourself.

if you say the reloads are EV+, then what does that have to do with a marketing budget? if reloads are EV+, then why not have them running forever, like absolute? then it would even help underwrite these other things you mention.

[RunDownHouse]

The reload bonuses are an expense to the site, just like any other investment or capital expenditure. Say, for whatever reason, Stars believes that it can get a 10% return on its bonuses (for every dollar spent on bonuses, it earns $1.10). Management also figures that it can get a 15% return on advertising.

But not every firm can get the same return on similar expenditures. Absolute believes that advertising will only earn it 8%, while bonuses will earn it 15%. Its pretty easy to see that Stars would do more advertising than bonuses, and Absolute would do more bonuses than Stars, even though both earn a positive return on each type of promotional spending.

Why would Stars ever do a bonus then? Returns on investment aren't static. Maybe they believe that, while the main event of the WSOP is coming and in the following months, there will be increased audiences for poker on TV, boosting their advertising return to 20%. Or maybe there's a seasonal slowdown (Christmas?) during which new players are less likely to sign up. Then it might make more sense to keep existing players at the tables than spend money trying to attract new ones, boosting bonus returns to 12% and lowering ad returns to 5%.

This is all conjecture, of course. Only management knows what kind of return on invested capital they can get, what their weighted average cost of capital is, what their hurdle rate is for various types of spending, etc. But capital is limited. They don't just have unlimited budgets that enable them to undertake every profitable investment out there. So management *should* be directing their capital towards its highest use, and there is no reason that use should be the same across sites or across time for any single site.

[stoxtrader]

another important point is how much a bonus cannibalizes existing play.

so for all the "extra" play a bonus creates, there is also play that would have happened anyways, that they have to pay a bonus on.

[ipp147]

UglyOwl,

Good post I like these.

There is no way to get a split by Country is there on PokerPulse?

The advertising of sites in the UK is pretty intense at the moment. It would be interesting to see how much that can bump traffic given our more liberal views/laws of online gambling.