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After spending more than a quarter of a billion dollars on national advertising between August and November -- and forming a significant source of programmers' ad-sales gains in the third quarter of 2015 -- daily fantasy sports sites DraftKings and FanDuel have virtually disappeared from the network TV scene.
Some have speculated that the ad slowdown is because of the pending litigation taking place in several states where the attorneys general are trying to stop those sites from doing business, contending there are not games of skill but illegal gambling. Another blow came over the weekend when, The New York Times reported, Vantiv Entertainment Solutions, a payment processing company that handles a significant number of transactions notified the operators this week that it would stop handling their payments as of Feb. 29.
One TV network executive, though, told Multichannel News that when DraftKings and FanDuel began their ad spending spree prior to the start of the National Football League season last year, they planned to begin with a heavy barrage of ads and then pull back as the season progressed.
“They focused on customer acquisition during the first half of the season, front loading their spending to improve market awareness and build up their customer base,” the executive, who did not want to speak for attribution, said.
That doesn’t answer why the two companies as the NFL season wound down have not more heavily promoted their NBA offerings, which unlike the NFL, has national telecasts virtually every night.
DraftKings and FanDuel, which invested a combined $260 million in commercial time on five networks from August through November, have only spent a combined $4.2 million since, with a small chunk of that in National Basketball Association telecasts, according to data from research firm iSpot.tv.
The networks that reaped the benefit of the massive ad campaigns – CBS, NBC, ESPN, Fox and Turner – all declined to comment on their ongoing discussions with DraftKings and FanDuel regarding their ad plans going forward. And attempts to reach the two advertisers were unsuccessful.
“The legal stuff has everyone nervous,” the network executive who did not want to be identified said. “Everyone wants to lay low. It’s a thorny situation. There’s no reason to talk publicly about advertising plans right now.”
DraftKings and FanDuel are not exactly lying low, though. They might be advertising much right now, but both seem to be laying out plans for more ad spending in the upcoming months. DraftKings earlier this month hired Janet Holian as its new global chief marketing officer, and FanDuel signed a multi-year licensing agreement to feature NFL players in future marketing campaigns. Those moves seem to indicate more ad spending is on the horizon.
While it lasted, the spending spree in the second half of last year was one of the most concentrated periods of advertising by two advertisers in TV history. Data from iSpot.tv shows DraftKings and FanDuel outspent the entire beer industry in the month – Aug. 16 to Sept. 15 -- leading up to and including the NFL’s start of the season.
They also outspent the entire retail pizza category during that same period, spending more than the $45.7 million invested on national ads by the pizza chains.
iSpot.tv data also shows that between Aug. 24 and Sept. 13, the two fantasy games brands together aired an ad on national television every 90 seconds. On Aug. 31, they combined to air 1,285 commercials, nearly as many ads as minutes in the day (1,440).
Between August and November, DraftKings spent $123.4 million on national TV ads, according to iSpot.tv. FanDuel spent $136.5 million. Since then, DraftKings has spent just $3.1 million, while FanDuel has spent $1.1 million.
Where were the dollars spent? DraftKings spent 44.6% of its budget or $56.3 million during NFL game telecasts, while FanDuel spent 63% of its budget or $87.2 million during NFL games, iSpot.tv data shows.
NBA games since the start of the season have gotten just $3.2 million from the two combined.
DraftKings also advertised in the 2015 PGA Championship on Fox and on college football, per iSpot.tv. Most of its ad dollars were spent with ESPN, Fox and CBS. FanDuel also bought ads during college football and ESPN’s SportsCenter, with most of its dollars spent on CBS, NBC and Fox.
The ads more than likely accomplished the mission of increasing consumer awareness. Between August and January, DraftKings generated 8.4 billion impressions on their ads, with an average view rate of 84%, according to iSpot.tv. FanDuel generated 7.9 billion impressions with an average view rate of 81%. And of all those impressions for both, 75% were viewed live.
