The CEO of FanDuel explains why there won't be another blitzkrieg of advertising this year

Thomson Reuters

The first week of the NFL season has come and gone. And along with the absence of Tom Brady, perhaps the biggest noticeable difference between this year and last is the relative dearth of advertising by the daily fantasy apps FanDuel and DraftKings. 

A lot has changed in a year. Last year at this time, FanDuel and DraftKings were each valued at over $1 billion. Their logos were emblazoned on billboards, buses, and subway cars. 

Combined, the rival apps poured $750 million into TV commercials focused around the start of the NFL season. They were inescapable. At one point last fall, Legal Sports Report estimated that a commercial for either FanDuel or DraftKings appeared on TV once every 90 seconds.

These commercials were not exactly met with glowing remarks. Digiday reported that 76% of people reacted negatively to the commercials — in large part because of their frequency alone. 

"Negative mentions don’t generally concern themselves with the quality of the ads, or the messages within them, but just seeing them repeatedly," a Brandwatch analyst told Digiday.

Then things took a turn. After The New York Times reported a DraftKings employee had made $350,000 on FanDuel, New York's attorney general began to investigate the companies, and eventually ordered cease-and-desist letters. Several states followed suit, which led to complex legal battles and arguments over whether or not daily fantasy sites constituted gambling or, as the apps argued, games of skill.

On August 3, following a lengthy summer lobbying effort by the companies — which included the presence of former quarterback Vinny Testaverde on the New York State Senate floor — New York Gov. Andrew Cuomo signed into law a bill that granted daily fantasy to be played in New York.

Seven other states have signed similar laws allowing, and regulating, daily fantasy sports. After a whirlwind of a year, it seems that FanDuel and DraftKings aren't going anywhere — at least anytime soon.

"We're really excited about the start of the NFL," FanDuel CEO Nigel Eccles told Business Insider in an interview. "We think it’s going to be bigger than ever this season. When users come by they’re going to see a lot of changes. The site looks completely different."

Another difference, Eccles said, would be the company's advertising strategy. He admitted that last year, his company overdid it with the commercials.

"What I would say about last year was that [the commercials were] really driving awareness," Eccles said. "Prior to last season very few people had heard of us, so we really wanted to get out there and get people to know us. That was successful — maybe too successful."

And it wasn't just the frequency of airtime, Eccles said — the content of the ads were also regrettable. Think back on those commercials: What stands out more than anything is the bro in the backwards hat, oversized check in hand. According to the commercials, the everyman getting rich — and getting rich quick — was precisely what daily fantasy apps like FanDuel were all about. 

"I think last year we probably focused too much on money," Eccles said. "I think we probably were too narrow in what we were marketing."

He added: "We really struggled — we knew players were saying, 'Hey, this product is really exciting, it’s a lot of fun, that’s why I play it.' And we said, 'OK, how do we put that in an ad?' I don’t think we were successful there last year. The other reason people loved playing was the prospect and the excitement of winning money, and we focused too much on that. That was definitely a mistake."

The problem with focusing so narrowly on money, of course, was that the everyman wasn't winning as easily as the ads portrayed it. Rather, the skilled players — many of whom were setting dozens of lineups based on complicated algorithms — were winning the big prizes in large part by preying on the inexperienced players.

Although scripting — the automated way professional players were able to set dozens of lineups concurrently — has since been banned, Eccles knows this type of "sharks vs. minnows" dilemma is a big one in the industry. He said it presents a challenge when it comes to growing his product.

"It’s something that we’ve been concerned about for a long time. We want to be a fun, entertaining product," he said. "We want it to be a game of skill, so we accept that the better players are going to win more often, but we also want new users. We want there to be a level playing field."

He added:

"One of our marketing guys likes to say that if I’m a nine-minute miler, I want to go in against other nine-minute milers, not a five-minute miler. So what we’ve been doing is putting things in like beginning leagues, where only beginners can play. We’ve also been clearly marking the experienced players so you can identify them. If you want to play against them, sure. But we’re also doing a lot of research and education so that if you’re a new player, we want you to get better. That’s a key part of the product."

Instead of focusing on winning money, Eccles said that FanDuel's commercials this year will focus on the other reasons that make people use the app. 

"We know people play FanDuel for the bragging rights, the camaraderie, they love the research, the high scoring. You see that coming through in our ads this year. Given that we have the awareness, we won't have the frequency [of ads] we had last year."

This change in approach was visible during Week 1 of the NFL season. FanDuel's ads boasted something called "SportsRich" — a new, trademarked phrase FanDuel describes as "the experience of having all the great stuff sports has to offer." 

In the new ad, fans drink beer and taunt each other from the couch. Gone are the oversized checks, or any mention of winning money whatsoever. Though, yes, there are still plenty of bros in backwards hats.

Thomson Reuters

NOW WATCH: Usain Bolt avoids this one type of food