In the latest of our series of CAP video interviews installment, Jason Seleno, owner of Instant Channel Inc., discusses the rules and regulations, as well as the tactics and techniques behind his successful email marketing business.
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Warren: Hey guys, I’m Warren Jolly with Casino Affiliate Programs, and you’re watching another one of our video interviews where we profile some of the most influential people in the iGame industry. Today we’re going to be speaking with Jason Seleno of Instant Channel Inc. Jason’s company focuses exclusively on email marketing, and has been an active affiliate for almost three years. He has over ten years of experience managing email operations of all sizes, and on a variety of platforms. Leveraging Instant Channel’s unique custom email delivery and data analysis software platforms, he leads his email team delivering over 7 million targeted emails each day. Our topic today will be all about email marketing and how to apply it in the iGame affiliate space. Jay, it’s great to have you.
Jay: Thank you Warren, good afternoon.
Warren: Let’s take a quick second and tell our audience a little bit about yourself, and what got you into email and affiliate marketing.
Jay: Sure. You know, before I was in this field, I worked in the corporate legal world. Ironically I focused quite a bit on keeping out the kind of mail that my company sends now. When the economy took a nose dive in about 2008, it didn’t appear to me that it was safe to rely on any company, no matter how big or seemingly strong for a job. The company I worked for at the time, they were strong, but still, times were rough. Around the same time, my brother, who co-founded Instant Channel with me, he had been active in affiliate marketing for about five years, working for a large email publisher. He suggested that we form our own operation, kind of leverage talents that we had both developed over the years. So we did that, started small, and kind of grew it from there.
Warren: Okay. Were you an attorney prior?
Jay: No, I actually worked in the IT department. I was the IT director of a large law firm here in Orange County. I made the switch over to affiliate marketing in early 2009.
Warren: Got it. So you had an IT background before you got into the space.
Jay: Yes, and I’d done some contracting work for my brother’s company for a couple years prior to leaving the corporate world, so I had been exposed to it. This was a full-on jump happened then.
Warren: Okay. So prior to getting into the gaming space, what are some of the verticals that you’ve done email marketing in successfully?
Jay: We’ve worked with a whole variety of different kinds of offers. I think we worked for about a year before we even touched the gaming stuff. We were in Payday, and we were in straight-up as- seen-on-TV type of stuff, and all the kinds of offers that you find in your inbox, in your spam folder, that was us, and it still is to some extent.
Warren: All right, interesting. So, just jumping to the online gambling space, many affiliates in the space that I talk to, they found it challenging to acquire gambling customers via email marketing. Why do you think that is?
Jay: There are a million ways to do email marketing wrong, but I think one of the mistakes people often make is, maybe not understanding their list. You have to know not only the demographics of your list, but also evaluate it on an ongoing basis to see how it responds to the various gambling offers that you send. Open rates, click rates, unsubscribe, complaint rates, all these things help us narrow down the best offers for the lists that we have access to. The software that you use to manage your email campaigns should allow you to monitor these stats, and also separate out segments of your list. For example, you only send bingo offers to the people on your list that tend to respond to bingo.
Warren: So segmentation sounds like it’s very important.
Jay: It’s important for a number of reasons, but for the one that you just mentioned, absolutely.
Warren: One question is: what’s the difference between a spammer and a legitimate email marketer?
Jay: Well, I think the big difference is compliance with the law. As most people know, there’s a set of laws on the federal level called the Can-Spam Laws, and those laws regulate how email is sent, how your emails have to be structured, the things that you have to have included there. You’ll see emails in your Gmail spam folder full of Viagra ads and all kinds of things that are clearly not compliant. They don’t have an unsubscribe, things are forged, like the “from” is forged, the subject line is misleading. Those types of things are what people tend to associate with so-called spammers. Affiliate marketers that are compliant, they’re careful to make sure that they only use subject lines that aren’t misleading, that are approved by the advertiser. They have valid unsubscribe links at the bottom of the email, things like that, so that they’re compliant with federal and also state laws.
Warren: Are there any resources that affiliates can go to, to kind of understand what’s compliant versus non-compliant? Let’s say there’s an affiliate who’s primarily been doing SEO or PPC, how can they understand how to become compliant from the get-go?
Jay: Well, you know, Google is your friend. I mean, if you go on there, you can see samples of emails that are compliant now. The laws have actually changed since they were first implemented, so it’s important to distinguish between what it used to be, say, in 2006, and what it is now in 2011. There are resources; we depend a lot on legal counsel just because of the size of our operation, just to tell us what’s okay and what’s not. Generally speaking, the things that I’ve already mentioned such as subject lines not being misleading, the From lines being approved by the advertiser, and having a valid unsubscribe link; those are the main things that will keep you on the compliant side.
Warren: So, a little bit about your business. What techniques do you currently use to build an opt-in email list?
Jay: We take a two-pronged approach. First of all, we work with a lot of other companies that have highly responsive opt-in lists, but for whatever reason, they lack the ability to deliver high volumes of email like we can. Maybe they’ll have a list of a million people, but they don’t have time or the desire to build out that side of their own business, or deliver that kind of email. What we do is, we come in and we manage those lists for them. We look at the demographics, we ask them questions about the list and then we try to pair that list with the types of offers that we have access to. So, that’s the first side of it. The other way is a method that is pretty much tried and true. We use search/social/display advertising to direct consumers to offers that our company owns. Whereas you might go to some “Get a free iPad offer” and that’s owned by some other advertiser, not the person that actually sent you the email; in this case we would own that offer and send that email out to those people who were only interested in that kind of content.
Warren: What are some new techniques that you plan on trying to build your email list elsewhere, outside of those two methods?
Jay: Those have been really successful for us, so we haven’t really looked for new ways, we just looked more at expanding what we already do. We look for new data partners all the time. We’re always looking for ways to increase the numbers of properties that we own that we’re driving traffic to through Facebook, through PPD, all of those other methods. It’s a slower way of building up your own list, but the advantage is that you own those lists. Whereas if you’re just managing data for a partner, you have some sort of revenue-sharing model strictly with them; they keep feeding you data, and you keep paying them for that data, based on how much money you actually make on it.
Warren: Looking at your aggregate business and list size, could you share with us how big your database is today?
Jay: Our entire database includes somewhere around 350 million people. I don’t want people to think that we actually hit that entire database. There are many people that are suppressed for whatever reason. Maybe people have opted out of many offers that we send, so we never send them. Our daily volume is closer to about 7 or 8 million.
Warren: Interesting. Your software or technology platform, is it something that’s home-grown, or are you using a third-party solution that exists?
Jay: Because of the size of our operation, we had to go with a home-grown type of system. My brother, who I think I mentioned earlier, he worked on the technical side, I think, for close to six years, for a large email publisher before we started up Instant Channel. He had a lot of experience building out that type of a system, so we’ve created a custom system to not only send the mail, but also track the type of response that we get.
Warren: So a smaller affiliate if you will; how do they choose the right solution for their email marketing needs, and what are some of the solutions that exist today?
Jay: There’s a few ways for an affiliate to choose a platform. What it really comes down to is how much mail are you going to send every day? Your typical email affiliate might send 10, 20, 50,000 emails a day. For someone like that, spending the money and the upkeep on a custom platform probably isn’t worth the return they’re going to get, so it’s not feasible or practical for them to do that. That is the better option if they want to scale the model up over time; we’ve been doing this for about three years. If we had jumped on a platform that was already built, I don’t know that we would have been able to build it like we have with this one. Like I said, for an affiliate sending 10, 20, or even 50,000 emails a day, I know guys doing that from their home using a platform like RoboMail, or there’s Cobini. I think the best thing to do is to first determine how much email you want to send on a daily basis. Then go to one of these trade shows like Adtech, Affiliate Summit, and look at the different platforms out there. There are some that cater to large mailers, and there are some that cater strictly to the smaller guys. You could make good money mailing from home using RoboMail just by yourself, so that’s what I’d recommend.
Warren: Once you have the right solution, how does one test the quality of their email subscribers and decide on what offers work best?
Jay: When you first get a list or you put a list together, you can send a set of offers to it from different verticals such as Payday, CoReg offers, there are all kinds of stuff. What you want to do is look at the responses and then separate out the people that are responding to each offer. Then you separate them into segments, and you only send the type of offers that they want to get from that point forward.
Warren: Then obviously, you’re watching the unsubscribes and any complaints as well.
Jay: Watch unsubscribes, you’re watching how often they open the emails, if they click on it or not; those are things you can see just based on your own stats. If you don’t do that, then you’re going to be sending mail to people who don’t want to get what you’re sending, and that’s going to cost you money in the long-term; it’s not a good way to go.
Warren: Obviously, there’s a cost to sending out an email, and when you’re sending out hundreds or thousands or hundreds of thousands, things can add up pretty quickly. How do you stay efficient as an email marketer?
Jay: We just kind of talked about separating out segments of your list that respond to certain offers, so if you have a segment that responds to bingo, but it’s 10% of your list, you want to pull that 10% out and only send them bingo. You’re not sending the bingo offer to 50,000 people, you’re sending it to 500 people, 5000 people, so the cost of each email goes down. I think that yes, there is a cost to sending one piece of mail, but I think it’s like a fraction of one cent. The larger cost is the opportunity cost. Instead of sending a bingo email, you could have sent a blackjack email to a blackjack player, and you would have made a lot more money doing that. That’s key.
Warren: So on the efficiency point, if you sent 50,000 emails and only 500 even responded to the bingo portion, what do you do with the remaining 49,500?
Jay: You send them something else. You look at the offers that you’ve sent, and you see who responded to what type of gaming offer. We do still send out blanket emails to the entire list because sometimes you want to catch people that might have developed a taste for something different, or if you’re like us, you have data feeds that are coming in every day. You’re getting new data in your lists on a daily basis, and you want to make sure those people are segmented into the right verticals.
Warren: Are those data feeds coming from your data partners?
Jay: Typically yes, they are. Now we do feed our own system with the offers that we own, but that’s probably about half of what we actually send.
Warren: So you’re feeding in real time from both sources, new emails as they come in as they’re fresh.
Jay: Our data partners do send lists and data on a daily basis, yes.
Warren: I think one of the major changes that all email affiliates face is deliverability. Getting their emails into the inbox of Gmail, AOL, Hotmail, and ISP email accounts. Can you give our audience a few tips on how they can ensure deliverability on an ongoing basis, and make sure that rate remains high?
Jay: Right. If you take a company like Yahoo!, or even Gmail, they can’t let everyone send a million emails every day, or else their mail systems just simply wouldn’t work for anybody. Each ISP has their own way of evaluating how good the mail is that you’re sending. Are the recipients opening it? Are they clicking it? Are they sending it to their friends, or are they just deleting it without even reading the mail, or are they hitting junk? Most ISPs look at what we call engagement rates. If your engagement rates are really low, they tend to ding the reputation of the mail servers that you’re sending from. This will affect your future deliverability to the inbox, and maybe even to the junk folder. It’s important to only send the right kind of content to the segments of your list that want to see that content. It’s also important to take advantage of the resources that some ISPs give you. For example, Yahoo! will give you what’s called a feedback loop where you can see how many people in your campaign clicked the “This is spam” button, and you want to get those people out of your list so they don’t keep doing that. Your engagement goes up and the complain rates goes down, and the reputation of your mail servers go up. In the future, more of your mail will go to the inbox. That’s generally the model for most ISPs, although some are more friendly to mailers than others. Gmail, for example, the one that you mentioned, offers no feedback with no way to monitor how many people are complaining, so you have to depend more on your own internal stats. Again, that’s why it’s important to have a platform that will give you that kind of data on an ongoing basis; who’s opening, who’s clicking, who’s unsubscribing.
Warren: Just jumping back to the gaming space, what verticals or products have you found to be the most successful with your email data? Coming again, from outside the gaming industry, what products have worked the best? Secondly, which advertisers have you had the best experiences with?
Jay: You mean non-gaming? In gaming, we’ve seen probably the best returns from the slot-focused ads. We’ve tried poker, we’ve tried bingo, we’ve tried slots, we’ve tried pretty much everything. Slots seems to be, at least for us, the one that gave us the biggest bang for the buck. We focus solely on the American market, on the U.S. side, so I don’t know what holds true for other countries, but over here, slots was big for us. The advertisers that we worked with, I thought that Best Gaming Partner was pretty good, we worked with them for a long time. Best [inaudible 18:26] yes, yes. They were good. Things kind of fell apart there after a while, but overall we started out with them and it was a pretty good experience. We also pretty good experience with the guys that run the Cool-Cat Casino. I forget their name off the top of my head.
Jay: They were good, and Doyle’s Room. We liked them, too. Of course, that was before everything kind of fell apart. Yeah, and Bet U.S. was also a great partner, they always treated us well, we had a really good response. Once again, they’re a company that has kind of bowed out of the market that we’ve operated in, but [inaudible 19:11] how helpful that is here.
Warren: I think that gives people an idea. What types of volumes were you doing in terms of depositors, do you recall?
Jay: I’m sorry, I didn’t hear that.
Warren: How many depositing players per month were you able to deliver through your email?
Jay: At the peak, we were doing a few hundred a month on the slot side. It was harder to get depositors on the other properties. I thought that bingo was probably our weakest one for the U.S. market, but I’d say at our peak, a few hundred a month, sometimes going over 1000 to 1500 a month. That sounds about right. That’s changed a lot, obviously.
Warren: Are you still, data-wise and your business, are you still pretty much focused on the U.S.? Now I know you’re obviously mostly outside of gaming, if not completely, but are you doing any international business?
Jay: We have a data center that’s overseas, and we do some mailing from there, but our focus is on the U.S. market. We’ve mailed outside the country, but we seem to get the best bang for our buck here, so that’s where we tend to focus.
Warren: I know it’s been small volumes, but what have been the markets outside the U.S. that you’ve tried to email to?
Jay: We’ve done the U.K., we did Germany, we did some South American, just based on the data that our partners were offering to us, so we tested them out. We lack some localization skills, so to send out email advertisements in languages that we don’t really work with can be a challenge.
Warren: What would you say the biggest lesson that you’ve learned? You’ve been in the business for three years, specifically as an email affiliate. What are some of the things that, if you could start over maybe you would have done differently, or just the big lessons that you’ve learned?
Jay: I think it’s really important to know the people that you’re working with; the people that are paying you, the people that you’re managing data for, to know their reputation in the industry, because this is a big industry. There are a lot of people trying to make a buck. It’s important to work with people who will deal with you ethically and honestly, and that’s kind of hard to find. I think that that alone is probably the most important thing. We’ve had our share of experiences that we don’t want to repeat, but on the flip side we’ve met people like you, and other guys that we want to work with over the long-term. I think that’s what people need to look out for.
Warren: That’s very helpful. I guess if an affiliate was looking to jump in today and start emailing in the i-gaming, online gambling space, what would be some advice you could give them?
Jay: You know, I think it’s important to first of all, look at the CAP website. You guys review a lot of different properties, there are forums there, there’s a lot of feedback on which casinos and which gambling operations are the ones that you want to work for, and which ones might give you problems. You don’t want to just look at all the advertisements and pick the one that your intuition says might be the best one. You want to definitely go with the companies that have the best reputation over the long term, definitely.
Jay: Sure, I mean, that’s important. Obviously you don’t want to send out mail that’s illegal, especially here in the U.S. They do prosecute guys. Definitely having the right solution for what you want to do. You don’t want to buy too big of a solution, but you want something that’s going to allow you, like we’ve mentioned, to track all the different stats that will tell you which parts of your list, which offers you’re sending? If your platform can’t tell you “These thousand people like your bingo offer,” then you don’t have the right platform, not for gaming. Not for any type of email marketing, especially on a large scale, when you can send out 500,000emails and make nothing on that because you sent that half a million segment the wrong offer. It’s important, really, to maximize your resources. Especially now. I’m sure you’ve heard, and I’m sure a lot of people who are thinking about email marketing have heard, the resources available for mailing, just on the Internet side with respect to IP addresses, are almost gone. We’re kind of in this limbo period where they had given out all the resources to resellers; there’s nothing left to give out. There’s a new system called IPP 6 that’s supposed to come out some time in the near future, but nobody knows when. Being that resources are so scarce, they’re going to become more and more expensive until a wider option becomes available. The bigger mailers, like us, are going to, try and eat up all the resources that we can between now and then, so it’s not like it was 4, 5, 6 years ago when it was the Wild West and you could buy a block of IPs and mail on that block for months and months and make hundreds of thousands of dollars, it’s just not like that now. Your resources have to be spent very carefully, and that’s why software is very, very important.
Warren: The final question is: Do you believe that email is still going to be as important a medium to reach potential customers as it has been, say, in the last ten years, with all the competition that’s happening out there in the email space, but also users moving to social media and things of that nature. What are your thoughts? How important is email really going to be in the next three years?
Jay: The beauty of email is that it’s an open standard. SMTP, which is the Internet protocol behind mail has been around since the early ’70s. Because it’s so open and because it’s so widely distributed, I don’t see email going away any time soon. Of course, it’s going to be shrunk a bit by the things that you mentioned; people communicating via mobile phones and social media. There are all kinds of ways to talk now without sending an email, but I don’t think that email is going to disappear, or be significantly less. I’d give it several years yet, just because there’s nothing else that can really replace it. Nothing is quite like getting an email. Instant messaging works for some things, but at the end of the day I’m sure you still send how many emails a day? I still send probably a dozen.
Warren: Well, Jay, it’s been a great interview, I appreciate your time. It’s been really good to get some insight from a major email affiliate, I think our audience really appreciates the information you shared. If anyone’s interested in contacting Jay at the end of the interview, please send an email to email@example.com, and we’ll be more than happy to put you in touch. Thanks for watching, and stay tuned for future interviews with iGaming industry leaders. Take care.