Daily Fantasy Sports Giants Dial Back Ad Buys

Last fall the US-facing daily fantasy sports industry blitzed the American airwaves with an unprecedented volume of advertisements. Americans simply couldn’t turn on a radio, television or computer without seeing an ad for FanDuel or DraftKings.
That definitely won’t be the case this year.
According to a report in the Wall Street Journal, both companies are significantly scaling back their advertising budgets this year.
The reasons for the downgrade are pretty much what you might already be thinking; too much advertising is counterproductive and neither company is quite as flush as they were last year at this time.
Last year, the two daily fantasy sports giants spent somewhere around $500 million on advertising between the two of them. That investment translates into a CPA of $174 for DraftKings and $123 for FanDuel. Of course spending that much acquiring new customers put a tremendous burden on both companies, and that was before the insider trading scandal broke.
Incessant advertising is not only expensive for daily fantasy sports operators, it’s also triggered an incredible blowback.
Besides making potential customers tune their message entirely, daily fantasy sports operators also inadvertently drew unwanted attention to themselves with their wall-to-wall advertising technique.
All those ads made state lawmakers wonder whether daily fantasy sports constituted actual gambling. That’s led to expensive legal battles in almost every state the two companies were hoping to operate in.
This year’s advertising will focus more on player experience and emotion than on dreams of winning millions of dollars. Both company’s are hoping that their new approach will pay off in more attention from new players and less attention from lawmakers.