Introducing the Sharks

If you’ve seen any of the combined 25,000-plus FanDuel and DraftKings commercials that aired in September (only 214 hours of airtime), you have been introduced to some of the sharks of daily fantasy sports (DFS) gambling. On FanDuel, Scott H. let us know that he has won $2.1 million on a mere $35 invested. That’s an ROI of 6,000,000%. Or there is David Gomes, who was a $1 million winner on DraftKings. Not a bad day at the office for these sharks.

For those of you who aren’t as familiar with FanDuel and DraftKings, here’s a quick primer. Both recently raised huge new rounds of investments, and are valued at greater than $1 billion. They are also investing heavily in marketing as they try to acquire new customers in mass quantities—they were No. 3 and No. 4 in TV advertising spend in September, behind only Geico and AT&T. In DFS, you have a salary cap that you must allocate to build a lineup of players that you think will perform well on that specific day or weekend. If your players have better statistics than your opponent(s), then you win. You legally invest real money, and win real money. 

A study by the Sports Business Journal suggests that there are three core types of players in the DFS ecosystem:

The channel ecosystem is actually quite similar, and there is much to learn by understanding the nuances between these types of players. There are many minnows out there that have a partner program in place, but tend to be more risk averse and that simply conform to the norm. The big fish are willing to invest in their channel growth strategies, but are misallocating their budget by relying primarily on anecdotal data and past investment tactics. The sharks, however, are the ones actively investing in data and analytics to execute on their channel growth strategies and maximize the ROI for both themselves and their partners. 

Why the Sharks Win

In DFS, the sharks are winning because they are committed to building plans that are data-driven and executable. Sharks are 100% focused on driving success from their investments, and dedicate the necessary time and resources to doing so. There are three core drivers that give sharks a distinct advantage over the competition:

How to Become a Channel Management Shark in 2016

As channel leaders put together their 2016 plans, they have the opportunity to become a channel management shark (though we can’t promise a 6,000,000% ROI!). By learning from what makes sharks successful in DFS, channel leaders can identify and execute on the best opportunities for revenue and margin growth through their channel partners.

The year 2016 is right about the corner, but there is still time to ensure that your channel plans are data-driven and to best allocate your resources to enable a successful year. Stay tuned for more research and insights from ZS on about how channel leaders in large U.S. high-tech companies are leveraging data and analytics to identify channel segments that offer the best opportunities for revenue and margin growth in 2016.

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