With Week 2 of the NFL season on the horizon, will daily fantasy sports sites DraftKings and FanDuel unleash another barrage of television advertising on sports fans?
The short answer: Most likely.
What they’ve been spending lately
DraftKings had risen to No. 1 among all companies in the U.S. in terms of advertising spend earlier this month, according to the media tracking site ispot.tv. After spending more than an estimated $80 million over the first eight months of the year, DraftKings spent nearly $25 million in the first week of September, and that barrage continued into the first week of NFL season.
Before the second week of the NFL season begins, DraftKings has dropped back to No. 3 nationally for commercial spending for the past week, although its seven-day spend still eclipsed $15 million.
FanDuel, meanwhile, has recently upped its spending to close the gap with its rival, devoting an estimated $11.5 million to commercials in the past week.
Here is the latest TV spend rankings from iSpot:
What’s next on the commercial front?
While there was negative reaction to the onslaught of commercials on social media, the truth is, the advertising worked, at least from a top-level view.
DraftKings, according to the Wall Street Journal, has grown “from 3 million users to 4.5 million users” in recent weeks. Clearly, a lot of that figure was generated by commercials.
The endgame, for either site, isn’t a user base that small. They have designs on gaining a significant portion of the season-long player market in North America, which is upwards of 50 million people, in addition to attempting to capture the casual NFL fan. Neither is short on money in the short term, after completing massive rounds of funding, and right now certainly doesn’t seem like the time to lift the foot from the gas pedal.
The best way to attract players — at least quickly — is television advertising during football broadcasts. Will we see the same number of commercials as we did last week? That part is unknown. But there is little chance the ad spend for either site will drop precipitously this weekend.
Also of note: DraftKings, at least, has already had a new campaign out to diversify its presence on TV. It is leveraging its relationship with ESPN, as fantasy expert Matthew Berry appears in a new campaign.
Will the commercial wars hurt DraftKings, FanDuel?
The commercials from the DFS industry’s “big two” was a hot topic on Twitter last weekend and into the start of this week. And mainstream media outlets took notice, and attempted to dig into the question of whether the number of ads shown by the two DFS sites could backfire. The jury seemed to be out on that question.
Matt King, chief financial officer of FanDuel, said that the company is aware of the pitfalls of ad wear-out, and that it takes into consideration feedback from customers. Still, advertising is FanDuel’s greatest expense, and Mr. King says the direct-response style TV ads are highly successful for growing the company.
“Negative mentions don’t generally concern themselves with the quality of the ads, or the messages within them, but just seeing them repeatedly,” said Brandwatch analyst Kellan Terry, adding that people simply felt “inundated.”
Still, the general sentiment surrounding both companies remains positive despite their suffocating marketing efforts. Although the majority of tweets about their commercials were negative in tone, 81 percent of tweets about DraftKings overall were positive with 54 percent of tweets about FanDuel being positive.
We might see more evidence of the results of the advertising push in Week 2, with DraftKings and FanDuel again guaranteeing big prize pools that require hundreds of thousands of entries to fill.
Even if the contests don’t fill, however, it’s not necessarily a sign of a backlash against the commercials. The sites might just be overshooting the market (like they did on Tuesday), or are prepared to eat overlay on their contests as a price of doing business as they continue to ramp up customer acquisition.
But either way, it’s extremely likely you’re going to see your share of DraftKings and FanDuel commercials on Sunday.
