“What is the intent of this customer? And is this customer that’s typing in those words likely to provide an ROI that’s worthwhile if we bid high for a higher placement?” Gruebner said.
While Google provides a model as part of their AdWords package, Sportsbet souped it up with additional elements: the conversion data it has on similar searches and the timing of the search.
Sportsbet’s model applies machine learning across a semantics model to “work out words that are similar”.
“We have a very seasonal business with very short betting windows,” Gruebner added. “If the customers looking for ‘Melbourne Cup’ in March it’s a different thing to a customer looking for ‘Melbourne Cup’ two minutes prior to the race.”
Given the quick turnover of races and games to bet on, Gruebner and his team have set the model to automatically place the bid if it makes business sense.
“We’ve run trials of this model versus the Google model. On average [there’s been] about a 12 per cent increase in conversion rates and a 22 per cent drop in cost per acquisition,” Gruebner said. “This model is helping us to get more customers, and at a cheaper rate, which makes it very powerful.”
Gruebner also detailed the ‘same game multi’ product Sportsbet launched last year. It solves a problem that has had bookmakers stumped forever.
Working out the odds of the outcome of two independent events is fairly straightforward: the odds of one outcome multiplied by the odds of the other. But what if the events are not independent? For example a player for a team scoring in a match and the same team winning the match.
“This is a challenge that has confounded bookmakers throughout the years. And essentially every bookmaker in the world has just not offered these markets,” Gruebner said.
Last year, the company launched same game multi which “put that on its head”. It’s made possible with an engine that simulates every game 10,000 times using third party “play by play” game data.
“We work out how many times in those 10,000 simulations did say Johnathan Thurston score a try and the Cowboys win. And through doing that we can create a price,” Gruebner said.
“That produces an output without any human interaction. It produces a price in real time for the customer. And it keeps on repeating that until the game is over.”
Being one of very few bookmakers to offer such a product has proved an advantage for Sportsbet. Punters spent $40 million on same game multi bets last year.
Machines on side
Sportsbet – and its team of 40 analysts and data scientists – leverage Amazon Web Services for most of the storage and processing behind the models. Costs are considerable, but necessary.
“It’s not cheap but it’s becoming a hygiene factor in our industry. Whoever wins the data battle will win the whole share battle. This is not something we choose to be, it’s something we have to be,” he said.
As the models scale-up and more are used across the business, Gruebner and the team is now trying to ensure they stay on side. “If machines are making all the decision then how does a human reconcile that?” he said. “How do they make sure the machines are making the right decisions? This is a battle were coming to as a company – how do we operationalise that? How do we make sure we can’t be rorted?”
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