FanDuel gets a sport-friendly reboot
FanDuel gets a sport-friendly reboot
The pivot is a well-known tactic employed in the world of tech and there are countless examples of successful companies that have thrived once they junked their initial business plan in favour of a wholesale shift.
The rebrand, in comparison, has a far less starry track record and the business world is littered with examples of companies that have failed to reignite the company’s fortunes after extensive and expensive brand marketing exercises.
DFS operator FanDuel is a shining example of the first – it started out in Edinburgh, Scotland as news prediction engine called Hubdub before switching tack to become one of the leading daily fantasy sports (DFS) duopoly in the US.
We will soon find out whether it can buck the trend by making a success of the second move.
This week the company unveiled a new logo, strapline and a self-styled ‘bill of rights’ which it hopes will answer consumer concerns regarding its business model. It follows on the back of a what the company itself admits has been a “tumultuous” year which saw it and its major rival DraftKings rise to sudden prominence in the eyes of the mass market with an overwhelming advertising push that at one stage during the opening weeks of the NFL season last year reached saturation point.
The response wasn’t quite what the industry expected. Along with turning off a large part of the potential audience with adverts which were widely considered to be too aggressive, the industry also alerted legislators and regulators in the US to the anomalous legal status of the fantasy sports industry.
The negative reaction in part accounts for the rebrand process. As part of the bill of rights, the company specifically confronts perceptions about the legality of DFS and its now chequered regulatory status across the States. Nigel Eccles, the Scottish chief executive and founder of FanDuel, said the rebrand “reflects our commitment to transparency, innovation and enhancing the user experience”.
A major element of the move is a strapline that is designed to reposition FanDuel as the home of the sports fan. It has come up with the unhyphenated ‘Sportsrich’, suggesting that the appeal of fantasy sports is the “camaraderie, competition and excitement” that it adds to the average sports fans’ experience.
The sports-friendly message will be pushed via a TV advertising campaign timed once again for the start of the NFL season. However, this time around the ads will be nowhere near as ubiquitous, no doubt partly due to the adverse reaction last year but also due to basic economics.
Neither FanDuel nor its rival DraftKings will be spending anywhere near as much as they did this time last year when according to estimates from Eilers & Krejcik Gaming the pair spent between them circa $500m.
The evidence from FanDuel’s accounts posted at UK Companies House earlier in the summer is that this marketing effort depleted the company’s resources significantly. Between June 2015 and May this year the company’s net cash declined by circa $225m to stand at $47.8m. The company said the decline was largely down to the recent marketing splurge.
The open question will be whether it will achieve its aim of reassuring both the consumer and the regulator that DFS is not the quasi-sports betting substitute that it was being promoted as last year. Answering various scandals that surrounded DFS last year, FanDuel is now promoting the fact that it offers a level playing-field and, crucially, that players will not be competing against FanDuel employees.
Much of the rest of the rights address issues of visibility; promising players that any cash deposited with FanDuel sits in segregated accounts; ensuring players know the rules of play; making sure they know who they are playing up against, whether it is newbies or experienced players; promising instant customer support.
Totally Gaming says: The bill of rights is aimed at the consumer, but it also reads like a set of social responsibility rules that the company hopes will persuade US regulators that they can trust FanDuel to play by the rules. Both FanDuel and DrfatKings have had some success in persuading state regulators such as in New York and Pennsylvania, but they have a way to go yet.