Who's Really Cashing-in on Fantasy Sports?

It's amazing that more attention isn't paid to the rise of online fantasy sports. Today's marketing dollars aren't just shifting towards digital media, they're starting to flood social networking sites where user segmentation and data are practically spoon fed to marketers. But while video sites like Hulu and Youtube are reaping the benefits, there's still dozens of other networks that, for one reason or another, still aren't being tapped for their full potential. Case in point, fantasy sports.

Industry Overview

According to the Fantasy Sports Trade Association [FSTA], the industry generates around $1 Billion in annual revenue, on everything from branded content to subscription fees. And when you include the sports, media, and retail stakeholders that also benefit from fantasy participation, some estimate the industry's influence at around $4 Billion. Considering the steady rise in online participation, these stats don't seem too far fetched.
Some semi-recent numbers suggest that over 27 million people in the US (11% of the population) have taken part in some kind of fantasy sports league - and there's no shortage of Millennial males in that number. In fact, my friends and I just drafted our teams for "Live Free or Slide," a 14-team fantasy baseball league on Yahoo! Sports. With team names like "Morning Millwood" and "Designated Twitters," you can assume the league is pretty casual (despite the $20 buy-in). But for advertisers trying to reach this male demographic, the payoffs of fantasty baseball could be absolutely phenomenal - when played correctly.

The Industry's Players

As the
industry market leader, Yahoo seems to appreciate the potential of fantasy sports. Fast Company notes that online sports content is a "gold mine" because it's consumed largely by "the highly desirable demographic of men between the ages of 25 and 49." According to the article, it's the ad revenue that Yahoo is after; online sports content could generate as much as $1.1 billion by 2011.

Update: March, 2010

Since beginning this post in March 2009, it seems like more and more marketers are catching on. Of course, while Yahoo! Sports is still the 800 lb gorilla in the fantasy sports arena, sports fans will probably recognize some other examples:
CBS Sports: The popular choice for NCAA college basketball stats and brackets Notably, they have a March Madness Facebook app that lets users to compare their bracket picks with other friends in the pool.

ESPN: The self-proclaimed "Worldwide Leader in Sports" no doubt has the revenue and media resources to take over the fantasy sports world from Yahoo. But because it came late to the party, it needs to do something that really sets it apart. Having never used the ESPN site, I can't comment either way. If you've used ESPN fantasy before, feel free to leave a comment below and let me know what you think.

NFL: If you're a football fan, you've probably seen the big push to drive site traffic - the tagline "If you want the NFL, goto the NFL." Once again, I have absolutely no idea what kind of advantages their setup might offer over Yahoo's. But, as is the case with ESPN, the NFL is just too late to the game.

Why Fans and Marketers Love Fantasy Sports

Consumer Engagement is the key to understanding the value of Fantasy Sports - for everyone involved. In a blog post about ESPN, a former ad-bro of mine called the network: a hyped-up, overwritten, Emmy-winning gossip show for men" about "the oldest, most original reality show there is: Professional sports." And here's the thing - he's completely spot on. As ESPN and the NFL Network continue to process professional sports into digestible, pre-packaged narratives, fans across the country get more and more involved into story-lines that never used to matter. In an excerpt from Eating the Dinosaur, Chuck Klosterman says:

In essence, the NFL Network works exactly like FOX News: It stays on message and invents talking points for its core constituency to absorb. If Donovan McNabb is temporarily benched for Kevin Kolb during week ten of the season, that decision is turned into a collection of questions for football people to ponder until Sunday. How will McNabb react? Is his career at a crossroads? Has Eagles coach Andy Reid lost control of his offense? How will this impact your fantasy team? These are the ideas football fans are supposed to talk about during the run-up to week eleven, and the NFL Network ensures that those debates will be part of the public discourse.

(It's also worth pointing out that J.Dubs' ESPN insights came along before Klosterman's).

But this is exactly the point. Avid sports fans gobble up this male-equivalent of TMZ Gossip because outlets like ESPN and the NFL Network have made it part of our discourse. And with the rise of fantasy sports, these narratives seem to have become more essential. In the good old days, we only had to care about our Home Team. But thanks to fantasy sports, fan engagement has blown through the roof. Now, I not only have to keep tabs on the Red Sox, but also the dozen+ players on my Fantasy Team spread throughout countless MLB divisions.

Red Sox games used to be the only ones that mattered. But all of a sudden, I find myself watching games because I want to see if my closer Joe Nathan (Twins) gets the save or Nyjer Morgan (Nationals) gets another stolen base. These are NL players that never mattered to me - but that was before I drafted them. Their success is the key to mine. Thanks to fantasy sports, the MLB suddenly has fans from around the country viewing more games. I mean, if it weren't for all those managers with Nyjer Morgan on their squads, who else would be watching a brutal Nat's games? Surely not the folks on The Hill.

Fantasy Sports adds a whole new level of engagement to professional sports - and marketers are finally beginning to understand that. ESPN lists fantasy stats on TV. Rotowire syndicates their fantasy data online. The NFL pushes its viewers to NFL.com for research. If people are eating this crap up, they might as well make money off it. And as marketers get a little more creative on how to monetize digital content, we'll see even more resources chasing that potential revenue - and why not? Everybody wins.

~ Marketers generate sponsorship and ad revenue.
~ The MLB finally becomes more essential to its fans.
~ Sports bros have more gossip to obsess over.
Seriously, everybody wins.

And while I use baseball as an example, this exact same phenomenon takes place during football and basketball seasons as well. Personally, I'm even more obsessed during the NFL season. Ask me how badly I hate Jay Cutler right now. I dare you: http://www.youtube.com/watch?v=LXLq1Vy4llw

What do you think about the growth of fantasy sports? The leagues - the Resources - the Gossip and conversation surrounding it? Are fantasy sports only beginning to hit their stride?

What about the battle for market share? do you think any site can overtake Yahoo! Sports?

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Shouldn't We All Be on Match.com?

Online dating used to carry a pretty significant stigma. Of course, so did sleeping with someone before marriage. Needless to say, our dating culture has changed, and so have the resources we use to do it. I think we all have a tendency to associate online relationships with perversion and Dateline documentaries. But given the depth and variety of our current web interactions, it seems illogical that a site like match.com isn't yet a gen-y staple. Let me explain.

The average 20-something has a username on dozens of different sites - from ebay to someecards.com. Even further, a good number of those sites are social networks, designed to link millions of users together for various reasons. There's a social network for everything:

Facebook/Myspace: peer-driven social networking

Linkedin: professional networking

Twitter: real-time info and idea sharing

Blogger/Wordpress: blogging

AIM/G-Chat: instant messenging

Youtube: user-generated video

Yahoo/ESPN: fantasy sports

And these are just the major networks - other niche sites like Current (user-ranked media), Mashable (online media), DeviantArt (art), and even My.BarackObama are loaded with gen-y users who are at risk of exploding they're so goddamn connected.

Now let's take it one step further. Social networks are founded on the idea that users want to share a little piece of themselves (or a huge, awkward piece) with the world. Across sites, it's true that the info, ideas, and media we share are all carefully chosen to reflect who we are. We upload our funniest videos and remove unflattering pictures. We wall-post some messages and privately send others. We let some users see our info, and block it from others.

Every social network broadcasts a certain piece of who we are - or think we are. The only difference is who's listening.

Facebook shows our social side, even when we're consumed with work.
Twitter shows our ideas and media tastes even when we don't tweet for days.
AIM and G-Chat show away messages even when we're long-gone.
Linkedin shows our professional profile, even when we're not job-hunting.

Shouldn't Match.com show our relationship preferences...even when we're not looking?

The fact is, flirting, courting, and relationships are a huge part of the 20-something lifestyle. Most of us spend a lot more time courting a significant other than we do job-hunting. Doesn't it make sense to create a profile that shows your softer, more romantic side? If everybody had online dating profiles, it help prevent the awkward combination of chatting and flirting that haunts facebook. Instead of initiating a creepy facebook poke, suitors could wink through Match.com - a network designed for courting.

Already in a relationship? No problem, why not declare it through Match.com and show off all the commonalities you share with your significant other. Do you two only share 6 levels of compatibility? Uh oh, your friends will be the first to tell you that the relationship isn't going anywhere.

Status Updates:

Exploring? Click a green dot beside your profile name.
Not really looking? put a yellow one.
Taken? Add a red dot (and the person's name if you'd like).

These features don't yet exist, but it doesn't mean they shouldn't.

Whether we like it or not, online social networks reveal massive amounts of info about relationships, hook-ups, and break-ups. And, as these communities continue to grow in popularity (and features), we're becoming more and more comfortable sharing personal details. But facebook isn't the place to flirt and court - you can only learn so much about a person from their wall.

We have online profiles for so many different parts of our lives - social, academic, professional, creative. But on top of jobs and social lives, we're also hoping to one day meet that special person - so doesn't it make sense to join a dating network too?

Great idea? Terrible idea? Already a member? Let me know.

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Spammers are Marketers Too...Right?

Internet spammers are, if anything, very very persistent. And while it's obviously not the same three or four masterminds sending every "chEEp V!@gRa!" email out there, the sheer volume of spam speaks to its popularity and, apparently, success.

It's kinda like those warning labels on appliances [please take off clothes before ironing]. The concept seems ridiculous to most of us...but they obviously exist for a reason.

japanese warning

It seems ridiculous, but obviously someone's getting paid from spam.

The Economics of Spam

According to a BBC News article, a recent spam study showed a conversion rate of only 0.00001%. That's an average of one online pharmacy sale in every 12.5 million emails - or in this case, 28 sales out of 350 million emails. The scary thing is, with bots automatically multiplying and distributing these messages, all spammers have to do is wait and cash in. The study estimated that the most sophisticated spam networks are generating over $2 million annually. And while that number seems mind-blowing, it's important to keep in mind the size and scope of these operations - not the mention the time they've had to evolve.

The Evolution of Spam

I actually got the idea for this post after reading a surprisingly emotional and manipulative message in my gmail spambox. Click the screenshot below to check it out - it's a definite must read.

gmail spam message

Traditionally, spammers aren't known for their grammar, spelling, or precision with the written word. But after years of practice, it seems that someone in upper-management has sent a memo stressing the importance such skills. And frankly, as any good marketer would expect, a little time, testing, and practice has led to better campaigns. Of course, I can't speak to the conversion rates, just the quality of the message itself. If you're too lazy to actually click the thumbnail above (disgraceful), I'll summarize what I believe to be the key details of this message.

Sender: Simon Taylor, 65-year-old British-native living in Dubai

Important details:

1) Wife and two children died in a car accident six years ago
2) Used to be a workaholic until losing his family put his life into perspective
3) Currently undergoing treatment for Oesophageal Cancer
4) Has lost his ability to talk
5) Only has a few months left to live

Reason for email: Needs help distributing $5 million among charities

How he earned money: Owned two businesses in Dubai

Before getting sick: "I have been helping orphans in orphanage/ motherless homes. I have donated some money to orphans in Sudan, South Africa, Cameroon, Brazil, Spain, Austria, Germany and some Asian countries."

Why he needs ME: "Because relatives and friends have plundered so much of my wealth since my illness, I cannot live with the agony of entrusting this huge responsibility to any of them."

What's in it for me?: "I'm willing to offer you a reward If you are willing to help please reply as soon as you can. May the good Lord bless you and your family."

Number of religious allusions: 5

Now, the grammar and spelling may not be perfect, but what Simon lacks in formal education, he makes up for in tragic emotional appeal. Simon is the King Lear of Dubai and wants nothing more than to donate his hard earned cash to charities across the world. And without my help, his relatives may squander the rest of his wealth. How can you say no to that?

simon taylor and fam

Honestly, I think the only thing missing is a picture of him and his family at the indoor ski slope Ski Dubai. But, give it time - Simon, like any marketer, is improving with practice. Best of luck, my man.

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