ITM and ROI in MTTs

Toybits3, another local poker blogger, recently made an interesting comment/question on one of my earlier posts. Like me, I believe he is also planning to play more MTTs vs SNGs and he has set a target for himself of an ITM rate of 10% and an ROI of 50% and asked for my opinion.

My instinctive answer was that an ITM of 10% to 20% is actually achievable if you're a patient player. Heck, my ITM is somewhere in this range and I'm not too experienced. The question is the 50% ROI. I made a comment about how hard it is to consistently place in the top 3 where the good money is and this is actually what matters instead of just barely making it to ITM.

I was not too satisfied with that vague answer, so I decided to make an example here to look at some possible scenarios and also for the benefit of everyone who maybe in the same boat as us.

I will use the payout structure of a tournament that I'm familiar with. The $15 buy in 2k Guaranteed tourney at Poker.com. There is usually only around 150 players and pays top 15.

1st - $600
2nd - $400
3rd - $200
4th - $160
5th - $120
6-10 - N/A
11-15 - $30

I did not put down the payout for 6 to 10 since it will not be too relevant in the example that I am making. Okay, let's assume 3 players. Player A, Player B and Player C. All 3 players have a bankroll of $300 and play 20 tourneys each.

Here are their imagined results:

Player A = ITM in 4 of the tourneys, places 11, 12, 13 and 15
Player B = ITM in 2 of the tourneys, places 3rd twice
Player C = ITM in only 1 tourney but places 1st

Here are their ITMs and ROIs

Player A -----> ITM = 20% --->ROI = -80% ----> Net Profit = -$240
Player B -----> ITM = 10% ---> ROI = +33% ---> Net Profit = +$100
Player C -----> ITM = 5% ---> ROI = +100% --> Net Profit = +$300

(hope I got my computations right)

So what does this tell us ?

Well, a good ITM rate is important since it shows consistency and a nice gauge of your poker skill. But it does not necessarily translate to a good ROI. For one to get a good ROI in Multi Table Tournaments, you'd better get some top 5 finishes sprinkled in your ITMs otherwise your high ITM rate will be for nothing if you're still losing money. A good example is player A.

That is why we should realize that making ITM in a tourney is just the first step. After you make ITM, then you cannot relax, yes you can feel proud about the achievement, but know that you still have a lot of work in front of you and you have to hustle your butt to make sure that you make it to top 3 because 60% of the pot is concentrated there. I actually read from Gavin Smith that these are the type of players he likes to bluff out of big pots in the endgame. Those who are already satisfied making it ITM.

Of course this is just a basic example using a single tourney. Other tourneys with different structures and more players will give you different results but I think the conclusion will come out the same. Making it to ITM is not enough, placing high is what counts to get a good ROI.

Also, I can now give a better answer to Toybit's question, the acceptability of a target ROI of 50% relative to your ITM target of 10% depends on what kind of tourneys you are joining. Looking at player B, he hits your target of 10% ITM and actually does good by placing 3rd two times, but his ROI is still only 33%. So we can say that if you plan to join these kinds of tourneys with fewer players, then your target may be a little high.

However, if the tourneys you normally join have humungous fields which bloats the pot relative to the buy-in, then maybe even one 3rd place finish will net you a 50% ROI and your target is just right. Of course, these tourneys with tons of players have unbelievable variance and are pretty hard to cash in.

I hope the above helps. =)