The next big thing?
Frank Ravanelli guides us through the economics and new digital marketing opportunities offered by trading tournaments and daily fantasy sports
Trading tournaments and daily fantasy sports (DFS) are growing in popularity, among customers and operators alike. With the internet becoming more a network of social connections than a mere net of transactions and servers, the trend is here to stay. And digital marketing is the way to create awareness about these services and monetise the value created.
Here, we discover together what these egaming verticals are, plus the opportunities and challenges they present.
What are they? How do they work?
Trading tournaments, also known as forex tournaments, P2P trading and fantasy trading, are social ways to proï¬t from the ï¬nancial markets and they are growing in popularity in Europe. In such tournaments, traders select an asset, a deadline, a certain goal they think the asset will reach (example: to increase/decrease in value by â¬2) and an amount to trade. Traders who forecast the correct outcome are ranked (the higher the spread between the initial value of the asset and the target they correctly predicted, the higher the ranking). The top 50% of the traders double the traded amount, before fees are levied and regardless of where they rank in the top 50%, as long as they are there. The other 50% lose what was traded.
Some advantages of this approach include knowing in advance the exact expiration of the trade, having the ï¬exibility to reach the target at any time, within the chosen expiration time, to be ranked, and knowing in advance the exact ROI, or potential loss, of a trade.
An example of a platform offering trading tournaments is www.50Delta.com which has educational videos to explain the details of trading tournaments, and an affiliate program as well. Most of its promotional activities are centered around performance marketing.
Daily fantasy sports, on the other hand, are tournaments, 50/50 and head2head/cash games based on sports. They are legal in US, and here is its biggest appeal. The Unlawful Internet Gambling Enforcement Act 2006 expressly stated that fantasy sports are not subject to any federal ban. On a state level, they are legal everywhere, with the exception of Arizona, Iowa, Louisiana, Montana and Washington. But some of these states are discussing bills to allow DFS. Just to clarify: we are not talking about your office Premier League pool, or your pub’s season-long fantasy league. The keyword here is âdailyâ.
Opportunities and criteria to win are set with short-term deadlines, meaning a customer can play several games and win during one day, take one day off, then come back and play as long as he/she wants. Some games are available for the length of a live event only. The âtraditionalâ, season-long fantasy leagues would not provide enough entertainment value to the player, nor enough monetary value to operators and affiliates. The two current leaders in the daily fantasy sports space are DraftKings and FanDuel. They both rely heavily on performance marketing to promote themselves, in addition to offline partnerships with US sports leagues and teams.
In terms of economics, they have similarities with casino, including higher margins on premium features/selected games. Plus, they allow players to set up multiple entries in the tournaments and let them run, meaning a high turnover. As already mentioned, we are talking about fairly fast-paced sessions, with a short deadline, not monthly or season-long competitions.
When it comes to liquidity, they present the same opportunities, challenges and ï¬rst-mover advantages of poker. You need to have a critical mass, not just to balance risks as in sports betting or casino, but to keep attracting customers. The higher the number of active customers on one platform, the more tournaments available, the higher the social component/referral aspect and the higher the number of customers who are likely to join. And with regards to its appeal to the general public, which inï¬uences the size of the users’ base and risk management, they can be compared to sports betting (even if there is no betting component in them).
How do they fit in the performance marketing space?
Regardless of their individual features, beneï¬ts and regulations, both trading tournaments and daily fantasy sports are a perfect match for digital marketing. They are a service which is both marketed through, and an acquisition channel leveraged for, digital marketing. Customers acquired through these verticals can be cross-sold other egaming services and adding these options to one’s offering minimises the chances that existing customers will be attracted by other operators that offer them.
Content marketing is a key component of the digital marketing strategies for trading tournaments and daily fantasy sports. Considering the outcomes of each play and trade is determined by what is happening now in terms of sports and ï¬nancial market news, compared to games like casino and bingo which are not inï¬uenced by external elements, providing quality content, news and tools to analyse such big data is very important, for operators and affiliates alike. That’s SEO paradise.
A promotional plan for trading tournaments and daily fantasy sports needs to cater to pure traders and
players, who are already searching for these services. Plus, it needs to bring awareness â through educational tools such as stats, videos and tutorials about these options â to people who are already interested in trading and sports, but not aware yet of what trading tournaments and daily fantasy sports can do for them. At this stage, the digital marketing mix of these verticals is more similar to the one a sportsbook would implement.
Now is the time to enter trading tournaments and daily fantasy sports. Good domain names are still available. There are enough affiliate programmes to allow publishers to monetise their traffic, but not so many to create a strong barrier to entry to new operators. There is a demand for fresh content. Operators can still achieve a critical liquidity before the market gets saturated.
What’s in it for you as a marketer?
When the customers use premium tools, trading tournaments and daily fantasy sports offer margins similar to casino, with a high turnover when a customer runs multiple simultaneous entries. This is especially true for live daily fantasy sports, where positions are taken â often emotionally â when a game is running, and for trading tournaments when trades are made when the market is in turmoil for some short-lived event.
Marketing and content-wise, daily fantasy sports have the newsworthiness and wide appeal of sports betting (even if, as a product, they are completely different from it). In terms of barriers to entry, they are similar to poker and require liquidity. It’s a self-fulï¬lling prophecy that the operators who can attract most of the customers today will become magnets for additional customers tomorrow.
As an affiliate, now is the time to enter, secure valuable domain names, attract and educate a target audience, and monetise it. As an operator, there is still some room for a leading brand. Customers tend to have accounts with a few operators, to compare what is available on each.
However, considering most of the opportunities arise in real-time (ground-breaking market/sports updates, promotions, etc.) there is a limited number of accounts a customer can monitor and use. Now is the time to build liquidity.