Although news of astounding esports enthusiast and viewership growth is covered on a daily basis, advertising spend is slower than its predecessors’ in traditional sports franchises. However, experts speculate that brands that get involved in early adopter phase, as rules and regulations are still being founded in esports, will gain more loyalty than later ‘bandwagon’ advertisers.
It’s the classic chicken and egg conundrum. When surveying 100 various influencers from game developers, publishers, brands, advertisers and legal firms, roughly 70% of them agreed with the sentiment that esports will play a critical role in their business strategies, whether large- or small-scale. 50% of the same group also stated that esports is ‘a platform with a lot of potential, but won’t be mainstream adopted (or sustainable) until the industry is stabilized with regulations and a governing body.’(1)
However, will waiting for the esports industry to fully professionalize cost consumer brands and agencies the first-to-market impact (and following loyalty) within the esports community?
“Esports already is a viable marketing channel for big brands to target an extremely valuable and difficult-to-reach demographic—relatively affluent, young males,” says Brum Blum, Founder of IME Law, and one of the first esports Attorneys. “The problem is many big brands lack a basic understanding of the industry and struggle to engage with the typical esports sponsorships (which heavily involve live-streaming and other less-common activations).”
According to the latest Newzoo esports report, brands will spend roughly $463million on direct esports advertising and sponsorships in 2016 – a growth from $325million in 2015. However, this is a fraction of what annual advertising budget is spent in traditional sports, including the football, soccer and baseball.
Even with a lack of rules and regulations in the industry, which range from betting – most recently focused on skin betting, diversity in gaming, media ownership and talent rights, investment in the esports market have increased in the past few years.
“The huge rise in viewership for such events as the Riot World Championship and the Counter-Strike: Global Offensive majors was vitally important in driving interest and, eventually, investment in the esports space,” comments Jared Wynne of the Daily Dot. “When those investors began to include such popular sporting figures as Rick Fox and Shaquille O’Neal, the industry gained further legitimacy in the eyes of many.”
However, much of this revenue come in the form of angel investment, venture capital funding and straight purchases rather than a sustainable income through advertisement. So where is the gap between agencies and brands using esports as a marketing vehicle? What should the industry do to unleash its full capacity as a practical engagement platform for the coveted 18-24 demographic?
“We could do a better job of generating data to quantify the ROI for brands and creating packages that are more accessible to larger brands,” continues Bryce Blum. “The esports industry provides great opportunity, but executives and businesses need to learn how the ecosystem works in order to be effective in their endeavours. Take the time to learn how to be authentic.”
‘Street cred’ and authenticity come a long way in the esports industry, with many of the existing influencers and up-and-coming entrepreneurs ‘born’ from the initial competitive gaming industries from the late nineties and early 2000s – and for brands considering getting into the scene, the relationship building starts now.
That’s why the 2nd Annual eSports Conference in Los Angeles offers marketing, digital and advertising agencies the opportunity to meet a senior selection of esports influencers from Hi-Rez Studios, 343 Industries / Microsoft (Halo), ESL, MLG, Twitch, Fnatic and Team LiQuid. Designed for non-endemic companies to really delve into the intricacies of the esports ecosystem, this event is open for B2B professionals at any maturity of their esports journay.
“The eSports Conference so far is the only conference that has been able to bring together all the influencers and intelligence of the industry in one location. It’s been truly an opportunity to get informed and get connected,” said Wouter Sleijffers, Managing Director, Fnatic about last year’s show.
For more information, visit www.esports-conference.com; conference fees apply.
1. Kisaco Research, eSports Pulse Survey 2016
Kim Vigilia, Kisaco Research
Tel: 020 3696 2920