Eccles, Robins Say Brand Awareness Already Established
Legal Sports Report

Why Are There Way Fewer Commercials From DraftKings And FanDuel? CEOs Weigh In

Many television sets stacked
The TV commercials from daily fantasy sports sites DraftKings and FanDuel were inescapable for a period last year if you were watching NFL games.

The peak came at one point when a DraftKings commercial was on TV just about every 90 seconds. Both DraftKings and FanDuel took turns leading the nation in commercial spend on a weekly basis and spent tens of million dollars last fall.

This year, the ads have been harder to find and are far from ubiquitous. Not shockingly, the two sites’ ad spend has dropped dramatically. The commercials advertising how much money players could win was at least partially responsible for the governmental and media scrutiny that helped to slow the meteoric rise of the industry in the past year.

Why has the ad spend tailed off? The CEOs from the two companies gave their spin in separate articles recently.

DraftKings and FanDuel: ‘We don’t need’ more brand awareness

DraftKings CEO Jason Robins spoke with Recode about the decreased ad spend:

“Last year, we were in the process of becoming a known brand,” he added. “We created the brand awareness we were seeking to create last year. We don’t need that anymore.”

FanDuel CEO Nigel Eccles was on the same message as Robins in talking with Business Insider:

“We know people play FanDuel for the bragging rights, the camaraderie, they love the research, the high scoring. You see that coming through in our ads this year. Given that we have the awareness, we won’t have the frequency [of ads] we had last year.”

So, no more brand awareness needed?

I have never seen any metrics on the number of fantasy sports fans or just the general US population that recognize “DraftKings” or “FanDuel” if they hear the names. Clearly, a lot more people know the companies than did last summer, at least partly due to the 2015 ad blitz.

A couple of questions remain in chalking up lower ad spend largely to brand awareness already being established:

  • How much of that brand recognition is positive, and can that be changed by ads/marketing? There’s like a decent amount of the population that is aware of DraftKings and/.or FanDuel but do not have a positive view of them.
  • If brand awareness has been established to a point the companies are happy with, it hasn’t translated into dramatically higher user numbers over last fall. Brand awareness does not necessarily translate into a massive increase in depositing users, which is obviously the more important metric for any DFS operator.

To the former point, Eccles said this in The Street:

“It was a bit of a reset this year, we’re on a journey back to rebuilding trust, and that brand. I’d say last year was really about awareness, but we didn’t do a good enough job of explaining the product and why people play it,” he said.

More to the drop off in commercials

Clearly, the companies are doing what they are supposed to be doing; trying to present a rational, positive spin for why there are fewer commercials.

Not needing more brand awareness among sports fans could be part of the equation. But it’s not all of it. Other reasons:

  • Cash: Simply put, DraftKings and FanDuel don’t have the same “disposable income” as they did last year. Both were flush with cash after huge funding rounds last summer. Meanwhile, legal and lobbying expenses increased, and the sites operate in fewer states than they did a year ago because of legal concerns.
  • Détente: Things have changed a lot in the last year, when FanDuel and DraftKings were simply battling for market share. The two sites likely realize, to some extent, that wildly trying to outspend each other is not the best idea. Instead, they have been working together to lobby state legislatures for much of the past year.
  • Spending wisely: Customer acquisition costs remain high for DFS operators. At this point, there are probably more effective ways of spending marketing dollars than high-priced TV commercials. Especially if brand awareness in the target market is high as the sites say.

The bottom line: The reason why the sites are spending less on TV commercials has more than just a single rationale.

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Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.