Is Negative ROI Always Indicative of Campaign Failure?

Is Negative ROI Always Indicative of Campaign Failure?

Negative ROI in a marketing campaign often signals issues such as incorrect settings or targeting errors. However, it is important to recognise that initial negative ROI can sometimes lead to unexpected success over time.

Exploring a Reactivation Campaign

In a specific reactivation campaign, our goal was to reinvigorate depositors who had been inactive for a month. The target segment comprised users with three or more lifetime deposits, an average deposit between €10 and €25, and last activity 30 to 45 days ago. The campaign utilised SMS for communication, offering a percentage bonus on deposits.

Initial Setbacks and Realisations

After one day, the campaign showed a -68% ROI due to a CRM manager's oversight by sending messages to long inactive segments, such as those inactive for 60 days or more. Although this error exceeded the budget and initially seemed disastrous, further analysis revealed some intriguing outcomes.

Observations and Long-term Benefits

The reactivation rates were more promising than expected, with a 4.8% reactivation on the first day and 7.2% within a week. Interestingly, 35% of these reactivated users originated from the overlooked segments of longer inactivity. By month's end, about 30% of reactivated users made additional deposits, and two months later, 18% remained active, including two major VIP players.

Conclusions

This case demonstrates that negative ROI should not always be equated with failure. The campaign's immediate results were unprofitable, but players brought back from churn segments eventually compensated for the initial losses, yielding long-term gains. This example also underscores the importance of not solely relying on immediate ROI for evaluating a campaign's success. Even when human errors occur, they can occasionally result in unexpected business advantages.

Source: igamingceo Telegram