Wednesday, December 3, 2008

Slow Growth For Fantasy Sports; Fans Love the Industry, Advertisers Have Reservations

It's a success story, to be sure. In a little over a decade, the industry has grown from casual hobby to close to $1 billion in annual revenue, according to a trade association survey. Now it's looking for more, trying to ride out the rough economy by promoting itself to potential advertisers as an inexpensive entertainment outlet that auto and beer customers will flock to in even greater numbers as they cut back on attending live games. It would seem a natural fit. There are approximately 20 million users in the U.S. alone, up from 1 million in 1990, according to the most recent Fantasy Sports Association survey. But that hasn't translated to revenue growth from the advertising side, which has long lagged on fees that users pony up for league entries, premium content and fantasy sports-related magazines. Why? Because like Facebook and other social networking sites, fantasy sports don't score well with the metrics advertisers like to see: retention, brand recall and purchase intent, according to Tulsiani.

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