Need to Know: The Next Big Thing ... Online gaming

What is it? A form of online entertainment, whereby players open accounts with gaming sites to access chatrooms and play games such as poker and bingo.

Who's doing it? PartyGaming, which offers poker, bingo and casino games, has been up and running since 1997. Other established operators include Triple 8 and 32Red. But firms outside the gaming realm, such as Butlins, are now looking to move into online gaming to acquire and retain customers and build brand loyalty.

The lowdown Online gaming's potential for direct marketing is a contested issue. Leigh Nissim, managing director of St Minver, which provides white-label gaming services for media brands, predicts that big brands such as Virgin will soon want a piece of the action.

"By harvesting email addresses, marketers can obtain quality data and the chatrooms offer real-time feedback from customers. It's about talking to people in a way they want to be talked to," he says.

Some believe online gaming is becoming attractive to companies because it can drive customer acquisition by enticing a new demographic to their websites. It can also boost retention by increasing brand loyalty. Butlins, for example, is launching its bingo site in the hope of raising brand awareness among 18- to 25-year-old women, who may already play bingo at Mecca clubs.

"People have trust in the traditional brands," says Nissim, "and it is trust that will attract this new market and help these companies enter the gaming market."

But Richard Perry, managing director of brand communications agency Gyro, is unconvinced about online gaming's DM potential. He says: "I wouldn't base a long-term strategy for customer acquisition, retention or brand loyalty on online gaming."

And many people still regard gambling as a risky business. "People who aren't familiar with online gambling may be wary of the medium," says Xavier Adam from The Adam Media Consultancy.

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