Strategy

The sports streaming service that allows customers a team pause

Kayo aims to put the customer in control and it's using data and insight to deliver on it

For a new streaming service in a competitive environment, Kayo has gone from 25 per cent prompted awareness to 80 per cent in just 12 months – something it puts down to the Aussie love of sport, plus some exceptional marketing by the Kayo team.

Kayo Sports chief commercial officer, Anthony Hearne, who has been with the sports streaming service owned by Foxtel for four months, said while he can’t take credit for the marketing so far, he is very impressed with how effective it has been.

Kayo just hit over five billion minutes of live sports streams since its launch and has 370,000 paid subscribers (as of Feb 5), plus a number of unpaid subscribers. And that's where it gets interesting.

Uniquely, Kayo allows subscribers to ‘pause’ their subscriptions, rather than going to the hassle of unsubscribing and jumping through hoops to do so. It is hoped this customer-centric policy will set it apart from the veritable plethora of streaming services consumers now have to choose from.  

“I come from a telco background,” Hearne explained to CMO. “When people come in, they're a gross add, and you add them to your business, and then they're on a contract. And you know they're not going to churn until they get to the end of the contract.

“You've then got to work really hard to keep them at the end of that period, otherwise they churn. It's like they they give you the finger, and they're out of there. And it's really hard to get them back.

“So what we’re doing is a very different dynamic. This is very much putting the customer in control, and there’s no barrier to stop the service. We give the customer the power to pause their subscription, and it's putting the customer in control."

Equally, it's easy for customers to start back up, too. That's because Kayo has done work internally around this concept, redefining churn as a ‘pause’.

“It gives consumers the feeling that you are not trying to fleece them, you're letting them come and go as they want to watch things, and then they are happy to come back because they are not being locked in," Hearne said. 

“Sport is very seasonal, so we need to obviously attract more people that pay and stay all year around. We have all sorts of structures around how we try enabling consumers to discover more sports, the more sports they discover and they engage with, then the longer they stay.

“But we also acknowledge the come and go people. It's not a bad thing. It's just a thing that happens. So they come in, they watch something like the NRL. And at the end of the season, they tell us it's awesome and exit the service until next season.”

Performance versus brand

In order to attract those who might stay subscribed all year-around, Kayo's marketing strategy is performance/acquisition orientated, with an initial focus on sports fanatics, before broadening to casual sports watchers in the coming months.

“For the initial 12 months, the marketing strategy was the right one, and that was to grab the low hanging fruit of sports fans in Australia. I think we've been really good at attracting people who are just mad about a lot of sports or mad about one sport and getting them onto the platform,” Hearne said.

“The marketing on that has been pretty rational, really, and it's also been more skewed towards performance, than brand. And I think that has been a smart move to date, as it’s got that audience on-board quickly. Currently, it’s probably 70 per cent acquisition and activation, and 30 per cent brand. We haven’t really done pure brand, yet.”

Channel activation has also been key. Kayo said it is lucky to have a significant partner in News Corp, and has taken advantage of the digital and data capabilities of the organisation for customer targeting.  

“There's about eight million people in Australia that are interested in sport, of that about four and a half million indicated that they willing to pay for sport," Hearne continued.

Brand build

But from a marketing perspective, the next phase of growth is focusing on broadening brand appeal and building up buy-in with that broader sports fan or casual sports fan. And for Hearne, that means brand building.

“I grew up in marketing in the school of trying to get very targeted and segmented. That absolutely still applies, but really, for us to win in this category, we need to be appealing to everyone in that category, not slicing and dicing," Hearne said. "For fanatical sports fans, there's all sorts of features and benefits in there for them and we will continue to service them. But we really want to crack this open that much broader sports category.

“Rolling into next year, we're going to move to 60 per cent brand awareness, and 40 per cent acquisition, so we can drive up that emotional connection with the brand, so bring in more emotive messaging rather than just rational messaging as we have done to date.”

Kayo has moved quickly, starting with a pristine martech stack 12 months ago to now own and operates its own customer data platform (CDP).

“The Winter Codes campaign is a very significant campaign for us this next four to eight weeks, and includes direct communications via a TVC, radio and outdoor," Hearne said. “However, our primary business is building relationships with the customer directly. And on that customer we have data to drive insights, with consent and the capability to market directly to them, then having a commerce element on this platform that enables us to transact." 

Helping realise this vision is the fact Kayo has been built from scratch as a direct-to-consumer business, without any incumbent systems or platforms. Today, its own CDP is at the centre of these efforts.

Hearne noted each customer has a single ID using their mobile number. "We find this more accurate than an email address, so we have this single ID and then we build everything on top of that," he explained. 

“It moves into the decision layer, and we use some Adobe products through that layer. We also then extend the Adobe involvement through the design for crafting the right content at a personalised level.

“We built at the centre, we want to be in control of our CDP and it works pretty nicely for us, and it can scale as we do.”

Hearne said Kayo's approach also allows it to utilise data capability to determine ad decisions and also to quickly test them and adjust as needed.

“It took time for us to have enough data to be to be meaningful. We've definitely now got to a position where we've got a really nice idea of our audience, and how they operate, and how sport is the driver of the relationship with them and how that influences their behaviour," he said. 

And it's this data insight Hearne is now gearing up as NRL and the NFL pre-season start to kick in. He said the numbers are incredibly good.

“What we learned is when we're acquiring customers, we need to be very, very focused in that early stage of a season starting, and be very accurate in terms of how we invest until the end, and what channels we go after, and then keeping them post season," he added.  

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