It might surprise you that a cursory search for “DraftKings” or “FanDuel” on Twitter produces alarmingly few references to setting lineups, or depositing money, or discussing results of a previous week’s contests. Instead, the prevailing topic of discussion is advertising exhaustion, with many users gleefully mocking the services’ relentless marketing.
Just hours after NASA revealed water had been found on Mars, one user joked that the Mars water would now be sponsored by DraftKings. That the idea seems only a few steps removed from possibility speaks to just how aggressive the marketing push for Daily Fantasy Sports (DFS) services has been in 2015.
Last week, Adweek quantified that aggression with a single eye-popping statistic: $107 million. That’s the total amount that the industry’s leading brands — FanDuel and DraftKings — spent on television ads for the month of September. Nearly half of that number ($50.3 million) was spent exclusively on national NFL broadcasts airing on CBS, Fox, NBC, ESPN and the NFL Network.
Other popular destinations for the competitors were college football broadcasts, SportsCenter and even South Park, making crystal clear who the perceived demographic for DFS might be.
That $107 million figure netted the two competitors 25,722 time slots last month, good enough for 214 hours and 16 minutes worth of 30-second spots. That’s just shy of nine total days’ worth of broadcast, all airing within a single 30-day window. And that says nothing of print, radio, outdoor, social media, etc.
To give those numbers some context, the nation’s three leading wireless carriers, Sprint, AT&T and Verizon, combined to spend just $190.2 million on TV ads in August according to iSpot.tv, the latest month for which that data was available. It’s not an apples-to-apples comparison, but it highlights a larger point, i.e., these Internet upstarts with questionable legality and equally questionable valuations are advertising at rates consistent with telecommunications stalwarts worth hundreds of billions of dollars.
It doesn’t figure to slow down anytime soon. That’s because they’re fighting over the future, and they haven’t made any money yet. Though recent rounds of funding from major players have valued each company at upwards of one billion dollars, the simple fact is that they’re still in the red, and just how far in the red is anyone’s guess.
Projections for the future of DFS industry as a whole, though, are extremely bullish; even among those who suspect that a legal crackdown may yet be looming. The truth is that most people, who try fantasy sports once, continue playing them for years. The side games become part of the viewing experience, arguably even central to it.
FanDuel and DraftKings have likely already captured the hardcore fan demographic; the battle they’re waging now is for casual fans. That means two things, replicating the camaraderie and friendly competition found in work, family and friends’ seasonal fantasy sport leagues that are able to snare casual fans (and increasingly women in larger numbers) and, also, spending a whole lot of money to get out in front of those casual fans as many times as necessary.
Though it’s a metric they’re guarding fiercely, it’s safe to assume that the cost of acquiring new users is skyrocketing for the pair. The longer a prospective user holds out on trying a product, the more impressions they require before opting in. And because DraftKings and FanDuel are playing within tight boundaries on what their product can be without violating gambling restrictions, they’ve not been able to differentiate based on their product, instead relying on marketing to divide the two in fans’ minds.
So far, that means playing the volume game with ads and sponsorship deals struck. Given that each has significant investments with rights holders and even athletes, both DraftKings and FanDuel can be expected to start activating those sponsorships in-market much more visibly. A complete and sortable list, of which entity sponsors which team, can be found on Legal Sports Report. If you live in a city with one or more professional teams, prepare to be targeted, often.
Critics have pointed to legal concerns when describing the DFS industry as a bubble, but if DraftKings and FanDuel are playing a long game of which the end goal is legalized betting, they may actually benefit from increased scrutiny if they’re able to keep user bases growing and happy. Taking a page from Uber, they may be counting on their loyal users to get involved in the legal process and to make a lot of noise.
That’s a big if, though, given all of the questionable press lately surrounding DFS’ most prominent services. Bloomberg’s “You Aren’t Good Enough To Win Money Playing Daily Fantasy Football” was particularly damning, showing the skill level the world’s top player, and quantifying the capital with which they’re playing. One player, who claims to have won $2 million this year alone, admits that he has $180,000+ in play on any given day.
And yesterday, news emerged that employees of DraftKings and FanDuel are using insider information from their own services to win money on their competitor’s services. It’s just the latest black eye they’ll have to overcome.
But, money talks and with such significant investments from media companies and teams themselves, it may be likely that legalized sports betting is closer than making DFS illegal. If that’s their end game, we can expect FanDuel and DraftKings to double down on what’s worked, spin the hell out of the bad press, drum up further support, build their fortresses higher, and prepare for the day when they’re recognized as an integral part of the fan experience for sports in America.
And to get there, we’ll be seeing a whole lot more ads. You can bet on it.