Fantasy sports have become a multi-billion dollar business with FanDuel and DraftKings leading the way. It is estimated that Americans will spend about $5 billion on fantasy sports this year alone. FanDuel and DraftKings are taking in and paying out millions of dollars each.
In light of the recent scandal involving the two daily fantasy sports machines, the ad spend is shockingly high.
iSpot.tv, a media tracking site, says that in the first week of the NFL season, DraftKings spent more that $24 million on advertising, outpacing all other TV advertisers including AT&T, GEICO, Ford and Warner Brothers. In fact, DraftKings had nearly 7,000 national airings during that week. In the last seven days, FanDuel has spent more than $14.5 million on advertising, outspending all other advertisers other than GEICO during the same period of time. Basically, the FanDuel v DraftKings battle is resulting in an absurd amount of money spent on advertising – and both are making a huge mistake.
Who wins in FanDuel v DraftKings?
With all of the money these two companies are throwing at television, The FanDuel v DraftKings battle means they are only building the category, not preference. Think about it. They are advertising so much that I doubt most people could tell you which is which. I’m certain that most anyone who watches TV would be able to name both FanDuel and DraftKings, but they would be unable to differentiate the two.
Even with the scandal, few can say off the top of their head which side did the equivalent of insider trading.
The number of entries for each prove this to a certain extent with DraftKings having 3.75 million entries and FanDuel 3.18 million. While there is a small difference, I don’t think the numbers show preference as much as they show the results of DraftKings spending more money earlier in the NFL season. The reality is that you can’t put a sheet of paper between the differences of the two companies.
FanDuel and DraftKings have failed to give people a reason to choose one over other than “We have fantasy sports betting.” I don’t believe the ad spend at this level is sustainable and, when they pull it back, then what? If they were really smart, they would spend a fraction of their ad spend and hire a company like ours to position them in an undifferentiated market. Unless they do, once the fad dies down and/or fantasy sports betting becomes regulated and the advertising dollars dry up, all those loyal customers will simply move on with no reason to stay, because neither FanDuel nor DraftKings have given them any reason to.