Esports are rapidly becoming a major source of entertainment for hundreds of millions across the world. However, few brands have figured out how to effectively market in this arena and generally stick to 3 main strategies: influencers, teams, and events.
Esports are rapidly becoming a major source of entertainment for a significant portion of the world. Hundreds of millions of viewers tune in every week to watch and interact with millions of professional gamers as they live stream themselves playing video games.
source: http://newzoo.com
Disbelief and confusion are certainly typical reactions from traditional sports fans — but there is no denying esports are here to stay. Perhaps the most surprising part is actually that brands are just now starting to take notice and leverage the incredible reach and audience engagement of esports to connect with their customers. The opportunity is huge and largely unexplored: currently each esports viewer generates up to ~$3 advertising spend every year compared with $50–60 for traditional sports. Furthermore, esports represents a meaningful step-change in how fans relate to and interact with their favorite players.
So how have brands been diving into this space? In general there are 3 main avenues:
Influencer Marketing
Who is the audience?
For brands looking to connect directly with fans, influencer marketing is the most effective way to reach millions of consumers. The vast majority of esports viewing occurs on Twitch.tv (acquired by Amazon for $1b in 2014) where millions of viewers interact directly with thousands players streaming themselves playing video games at any given moment. However, only a small segment of streamers command a significant audience. Based on rough calculations at the time of this writing, over 60% of the viewers are watching the top 0.5% of streamers.
How do brands typically get involved?
Typically a sponsorship deal with an individual streamer will involve a unique referral link the streamer will share with their audience via permanent links in their profile and mentions live during the stream itself. The streamers are then often compensated on a CPA basis. Many of these deals are widely-available affiliate programs. For example, many streamers maintain an affiliate link to amazon.com and G2A.com both of which pay affiliates 3–10% of ultimate purchases completed via the affiliate link.
Example Endorse.gg Esports Influencer Campaign (https://www.twitch.tv/gernaderjake)
At Endorse.gg we work with influencers to focus on engagement and endorsement in addition to the typical conversion tracking. Esports is an incredibly unique arena where streamers can have a much deeper, 2-way relationship with their communities via both the stream chat channel and also frequently playing games with their most dedicated viewers. This relationship makes honest endorsements much more powerful than a standard run-of-the-mill affiliate program.
2. Team Sponsorship
Who is the audience?
Sponsoring full teams is also an increasingly popular option for brands as esports leagues become more professional. Major tournaments and seasonal leagues draw millions of live viewers with production values now rivaling pro sports leagues. The audience for pro team sponsorship is largely in line with other esports channels but likely resonates more strongly with enthusiasts rather than casual viewers who gravitate toward the more relaxed environment of a twitch streamer.
How do brands typically get involved?
The most extreme example of this typically involves full ownership and naming rights for the team. Recent examples include Korean food giant Genesis BBQ Chicken purchase and renaming of the League of Legends team “BBQ Olivers.” In the past few years, reported transaction prices for league of legends teams is rumored to be in the $1M+ range. Alternatively, brands occasionally choose to sponsor teams for a time period in return for advertising on team jerseys and websites as well as exposure when individual players stream practice sessions between major tournaments.
In general, team sponsorship can be a surefire way to quickly scale presence in the esports world. The limited number of pro teams ensures each sponsorship deal tends to be at least briefly noticed across the ecosystem. That said, due to their privileged position (and almost total reliance on sponsorship deals for profitability) these deals can be pricey for the total level of exposure.
3. Live Event Sponsorship
Who is the audience?
Finally, many brands prefer to engage on the live event side rather than work with individual players or teams. Major events are frequently run by highly professional organizations and take place in large stadiums or dedicated arenas. By sponsoring individual events, brands can often target the most dedicated of the fan base — the ones that are purchasing tickets to spend 6 hours watching video games. Additionally, event sponsorship can often reach the largest audiences. Whereas there is no guarantee that an individual team will qualify for the world championships and provide exposure to their sponsors, sponsoring the event itself guarantees brand exposure to the 30M+ viewers these events can draw.
LoL World Championship at the Staples Center ©Marv Watson
How do brands typically get involved?
For live events, brands typically choose to either fully sponsor the event themselves — notable examples include the Red Bull Battlegrounds or the Intel Extreme Masters; or simply provide a smaller sponsorship amount for limited exposure at the event. One of the key benefits for event based sponsorship is the opportunity to create branded experiences leading up to the big day. Many brands may get access to special box seats or backstage access as part of the sponsorship which can be raffled off as prizes as part of a broader promotion. Of the three avenues described here, event promotion can be the most expensive and require the most effort to execute given the complexity that comes with live events and the relatively small 10–20k in-person audience relative to the millions that will watch online.
Overall, brands can choose to engage with esports through a wide variety of vehicles. Its rapid expansion and wild-west nature allows brands to chart their own path and custom create innovative campaigns with any size budget. One thing is for sure, the opportunity is huge, under-developed, and waiting to be explored by enterprising marketers looking for the next frontier.
Endorse.gg is a marketing and analytics platform that helps connect brands with rising esports stars and their highly engaged audiences. For more information or to get in touch drop us a note at http://endorse.gg/sponsor/signup or email joe directly at [email protected]
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