Fan Duel, DraftKings Spend Away On Sponsorship; What’s The ROI?

Fan Duel, DraftKings Spend Away On Sponsorship; What’s The ROI?

The past week we have again seen the turf war/marketing grab escalate for brands looking for exposure in and around hot properties. From Monster Energy taking a Belmont Stakes sponsorship along with DraftKings, to DK’s annexation of all pieces of Madison Square Garden, including the jersey sponsorship for the New York Liberty, the massive spend to try and get eyeballs continues along for brands that are looking to capture and engage consumers, especially milennials around sports.

Do these type of sponsorships work? Do they fit a bigger picture or are they large gambles designed to get some corner of space so that competitors don’t get it before them. Recently Fan Duel, which has no real boxing business, chose to spend money to sponsor the Mayweather-Pacquaio fight and took up space on the champions fight shorts. Was there an ROI on that for FD, which also has begun developing their very smart activation plan for the upcoming NFL season, or was it a play to make more people just see but not engage in what they are doing.

“As the number of marketing messages proliferates due to digital, social, mobile media, it is increasingly critical for brands to develop fully integrated marketing platform, that ideally organically associate the brand with the content or sports property that is sponsored,” said Ray Katz, an instructor in the graduate sports management program at Columbia University and veteran sports marketing executive. “The programs should also address multiple objectives that include sales, “ownership”, engaging and exciting employees, and B to B considerations. One-off’s tend to be lacking in consumer engagement and long term brand benefit.”

While there is no doubt that even behind the scenes Draft Kings and Fan Duel are looking at those who spend money on legal sports gambling as part of their universe, publicly both companies continue to draw a line between fantasy and legal sports wagering, two properties heavily engaged with horse racing and boxing. So why do these sponsorships? One is the entertainment benefit that comes with such mega events, getting access to seats and experiences for your most engaged pay fantasy players, as well as for sweepstakes. Another is to prime the pump and build an audience which may or may not exist for a melding of sports gambling and pay fantasy down the line, or to at least engage known legal gamblers with more awareness for what can be done in pay fantasy today for consumers. If they bet legally, then maybe they are candidates for DK or FD. Still with this massive marketing spend, is it smart and strategic, or can the money best be spent elsewhere?

“An example of an effective integrated program having continuity is Penn Mutual’s title sponsorship of Collegiate Rugby 7s as well as the Varsity Cup, a 15’s event,” Katz added. “In this platform, Penn Mutual actually uses a Rugby theme for their annual report, titled a rapidly growing event on NBC networks, utilized the event and overall platform as a recruiting tool to attract younger agents, while making the brand relevant to a younger and largely upscale demographic as well. The signage was supported by Rugby themed advertising, which is becoming more prevalent as the sport becomes more mainstream and will constitute some of NBC’s most exciting new programming as a new Olympic sport.”

He went on to say, “ On the horse racing front, Belmont sponsorship programs which try to capitalize on the prospects of a triple crown would be best served using the Belmont as a kickoff point and then having some continuity through the Breeders Cup (Belmont to Breeders). Marketers should also consider the fit of demographics of horse racing, generally an older demographic with their target audience.”

So as the Triple Crown comes to an end this weekend, the sports marketing world will be lining up trying to tap the spending trough of both massive fantasy players, especially as large events, even those like tennis and golf that still don’t have a massive fantasy audience come into play. Whether those spends tie to a bigger cohesive plan, as Draft Kings has done with MLB and Fan Duel with the NFL remain to be seen. One thing is sure, the outreach to locate invested consumers for pay fantasy is going wider than it has ever been, and players in areas like horse racing and boxing are more than willing to take the money and roll the dice.