Lesley Eccles is Co-founder and Marketing Director of Hubdub.com, an online news prediction contest that allows users to win virtual dollars by correctly forecasting the outcome of real news stories. Recently, Hubdub Ltd expanded their web properties by launching FanDuel.com, a site where participants can make real money by playing and winning at fantasy sports games.

At bigmouthmedia‘s recent Social Media Summit, Lesley talked about some of the challenges associated with marketing through social media, as well as the potential opportunities for start-ups operating in this space.  

As Econsultancy’s recently published Social Media and Online PR Report (produced in association with bigmouthmedia) shows, smaller companies are more likely to get involved in social media, as they face fewer barriers to experimenting with new channels and are inherently more flexible.

As a start-up, social media plays a pivotal role in Hubdub’s marketing efforts. I caught up with Lesley post-event to find out more about Hubdub Ltd, and the challenges facing SMEs and start-ups in this difficult economic climate.

Tell us a bit more about Hubdub, the company.

We formed our Social Games company, Hubdub Ltd, in November 2007 and launched our first prediction game, hubdub.com, in January 2008. Hubdub.com is a news prediction game where players use fake money to make predictions on questions about subjects such as politics, entertainment, business and sport. We received funding from Pentech Ventures and other investors in January 2009.

In July 2009, we launched our first premium prediction game, FanDuel.com, which is a real money fantasy sports game focused on American sports.

When did you launch FanDuel.com, and how has the site grown and developed since launch?

We launched FanDuel.com in July this year and have seen massive growth since then. We have marketed the game through pay-per-click and social media campaigns, and have recently launched an affiliate scheme too.

How does the site make money?

We take a 10% cut of the entry fees of every game. For example, if two players play for $10 then the prize is $18 and we take $2.

Who is a typical FanDuel user? How do you attract new visitors to the site?

FanDuel is different from regular fantasy sports games because rather than drafting a team for the whole season, you can draft a team just for the day. So we’ve found that our typical player is already in several season long fantasy leagues and is male aged over 25.

In addition to the methods I outlined before, we’ve found that a significant proportion of our new visitors come from word of mouth, or refer-a-friend. Because our players all know so many other fantasy sports fans from their regular leagues, if they enjoy FanDuel, then they tell their friends about us, and of course their friends are much more likely to sign up from a personal referral than from an advert on Google!

FanDuel.com is primarily focused on the US and Hubdub.com on the US and UK markets. Do you have any plans to expand the service to other locations and markets?

Right now our focus is purely on the US market – we’d love to launch a UK fantasy sports game too, but we need the numbers to stack up first: the US has at least 20m fantasy sports players, and the UK has only 2m.

As a SME business based in Edinburgh, what are some of the challenges involved in running an online business that has a US focus?

There are several challenges, all of which are surmountable. First of all, on a practical level, the timezone difference makes it challenging to schedule conference calls, particularly because a lot of our players and contacts are on the West coast. So I find myself having calls as late as 11pm.

Also, the fact that we’re not steeped in the culture makes it very challenging to keep on top of the latest happenings. I’ve talked about this a lot in the past but can’t stress enough the importance of this in understanding your customer base. Every Sunday evening, for example, we watch the NFL games on Sky Sports. We also travel regularly to the States to attend trade conferences and meet sports bloggers – being able to talk to your target audience face-to-face is invaluable.

How has the recession impacted the site?

We actually pitched to our investors on September 15th, the day that Lehman Brothers went bust. Between then and closing the deal on Christmas Eve was an incredibly stressful time. Because we’re an entertainment site, we haven’t actually seen any negative impact on our game play – quite the opposite in fact.

What tips would you give to businesses that are looking to grow their own on-site online community?

Understand how much a customer is worth to you over their lifetime with you to work out how much you can spend to acquire one. Remember that a little like PR, social media isn’t “free”, you pay for it with your time. Also, build in and optimise the “virality” of your product from the outset to reduce the cost of acquisition as early as possible.

What are some of the challenges for Hubdub in terms of marketing through social media, and what have you learned from the experience?

Social media is a great tool for us to build relationships with our players, talking to them one to one on Twitter and Facebook is a terrific way of really understanding how we can improve our games for them. It’s also excellent as a platform to help our existing players “share the love” about FanDuel/Hubdub and bring in their friends to play against – that is where the real power of social media lies.

In your opinion, how have real-time services such as Twitter affected traditional news and media channels?

Twitter gives you immediate information. If I want to know what people are thinking about breaking news right this second, that’s where I go. However, there is a lot of noise on Twitter and little substance. You can get the general sentiment of how people are feeling about the news, but it is difficult to get a considered opinion.  You also get a feeling of togetherness there; sharing the shock, sharing the horror, the 21st century equivalent of gossiping with the neighbours.

For example, when Tiger Woods crashed his car, I checked the Twitter stream and counted two different messages retold many different times and in different ways, but it was the same two thoughts.

If traditional media is smart enough, it will understand that people need both, and try to integrate them to make something really powerful; a service that will give you the news and sentiment instantly, with a feeling of companionship or brotherhood, but follow up quickly with a recap and short opinion pieces.

The key is being short. When people start living by 140 characters, they no longer have the patience to read two pages of newspaper opinion.

What advice would you give to start-ups and SMEs who are looking at cost-effective ways to market themselves online?

Experiment but measure everything, as you can waste a lot of time and money otherwise. Online marketing, and social media platforms in particular, are still very new and still being proven. It’s important to test different methods of driving traffic to find out what works for you. For example, if you’re selling a physical product rather than an online game like ours, your successful marketing platforms will likely be completely different to ours.

Use social media to connect with your (potential) customers and learn about them, but unless you’re an established brand, don’t view it as a sales channel. It works well as a re-sell channel when you already have the relationship in place, but not for that initial purchase.

Social Media for Real Results (Not Just Fluff) from bigmouthmedia on Vimeo.