Crowds of screaming fans sit glued to their seats for hours on end, watching their favourite players take on the competition in an all-out battle for supremacy. No, this isn’t the SuperBowl or the World Cup Final, it’s the rapidly expanding world of eSports.
And with a loyal army of highly engaged fans there are now real opportunities for brands that get involved. Just last week mobile giant Vodafone became a premium partner of ESL, the world’s largest eSports company and tournament organiser.
“eSports can no longer be counted as a niche entertainment business,” says Marketing Week contributor Harry Lang, founder of integrated marketing consultancy Brand Architects and interim acquisition director of Genting Casino.
“It’s mainstream and as such is nudging the likes of American Football, baseball and even football for eyeballs, meaning where it was once a homespun collective of amateurs, it’s now hit the big leagues.”
We are confident that eSports has by no means reached its full potential, so we believe it was just the right time for us to make an entry.
Bettina Haussmann, Mercedes-Benz.
Last year, there were 588 major eSports events generating an estimated $59m in ticket sales, up $32m from 2016, according to eSports market intelligence specialist Newzoo. The total prize money of all eSports events held in 2017 reached $112m, the first time it has ever exceed $100m.
As eSports has grown in size and popularity, global brands have flocked to sign lucrative sponsorship deals. Last year, Mercedes-Benz made its high-profile entry into the eSports sector by announcing a partnership with ESL, spanning tournament sponsorship across several countries. The deal started with the ESL One event in Hamburg in October 2017.
“The growth of the eSports sector has been amazing to watch,” explains Bettina Haussmann, senior manager sponsoring, product placement and motorsports at Mercedes-Benz.
“We are already seeing sold-out stadiums around the world, enormous prize money and millions of viewing hours of streamed material. Nonetheless, we are confident that eSports has by no means reached its full potential, so we believe it was just the right time for us to make an entry.”
To promote its presence at the ESL One tournament in Genting, Malaysia in January, Mercedes reshot its global ‘Grow Up’ brand campaign with an eSports storyline.
Then at the Intel Extreme Masters (IEM) – the world’s longest running pro-series gaming event – in Katowice, Poland, the car giant made a splash by offering the tournament’s most valuable player (MVP), as voted for by fans, a new Mercedes. It also drove each team between their hotel and the stadium in a Mercedes wrapped in their branding.
Haussmann explains that eSports offers a high degree of flexibility to brand partners, meaning they do not feel like a “pure sponsor”.
“For us, eSports is a logical extension of our already very strong sport sponsorship portfolio, where we have already achieved enormous brand recognition,” she adds.
“eSports is a future area that illustrates the social change taking place towards the digital world, one we take very seriously and support.”
The eSports sponsorship model
The fact global brands like Mercedes are showing interest is testament to the surging popularity and rocketing revenues being generated by eSports over the past two years.
Global eSports revenues are expected to reach $905.6m this year, up 38.2% on 2017, according to Newzoo. Some $695m of this figure will come directly from brand investment in the form of media rights, advertising and sponsorship.
Sponsorship is the biggest financial driver in eSports and is expected to claim a 40% share of total revenues. Newzoo expects eSports sponsorship deals – spanning event sponsorship, product placement and the sponsorship of professional teams – to hit $359.4m in 2018, a rise of 53.2% year-on-year.
One such sponsor is Gillette, which teamed up with the ESL to sponsor its first IEM tournament in February 2017. Seeing the tournament as a key channel to reach a young male audience, the shaving brand took an experiential approach, offering grooming for the players and giving fans the chance to personalise their razor handles using a 3D printer.
The company also signed up professional League of Legends eSports player xPeke as a brand ambassador, the first eSports athlete on Gillette’s talent roster.
“xPeke is uniquely qualified to help guide Gillette in the eSports space based on his success as a professional gamer, team owner and former IEM Katowice MVP,” explains Andras Papp, Gillette and Venus brand communication EIMEA.
“We treated xPeke as one of our global athletes like [footballers] Neymar Jr [Paris Saint-Germain], Thomas Müller [Bayern Munich} or Antoine Griezmann [Atlético Madrid].”
Gillette uses “old-school” metrics such as brand recognition, purchase intent and brand equity to ascertain if its eSports campaigns are driving business and building the brand. Papp explains the results so far confirm Gillette’s choice to enter the eSports sector was right.
He advises any brands considering entering the space to adopt an altruistic mindset and ask what they can bring to eSports that is relevant to the viewers and players.
The eSports sector has also proved attractive for car care brand Turtle Wax, which has sponsored OpTic Gaming’s Call of Duty eSports team in the US for the past three years. In March the brand extended its eSports sponsorship to European team Splyce, which specialises in the League of Legends and Call of Duty games.
“We got involved in eSports three years ago as it gave us a way of connecting with the next generation of car fans,” explains Turtle Wax’s European marketing controller, Matt Chapman.
“eSports really is a lot more authentic in the way it’s portrayed compared to a lot of the other sports sponsorships we’ve done in the past.”
eSports can no longer be counted as a niche entertainment business
Harry Lang, Brand Architects
Turtle Wax specifically chose Splyce’s Dylan ‘Madcat’ Daly as a brand ambassador because he is a well-known car enthusiast among the eSports community. Working in collaboration with its brand ambassadors, Turtle Wax plans to create behind-the-scenes online video content about the players’ lives, as well as filming them take part in a special road trip across Europe.
“There is so much interest in the eSport players’ lifestyles, because these players have grown up in this social online world,” says Chapman.
“They’re constantly streaming and they’re OK with streaming their lives, so it comes off as much more genuine. So much so that if you think about the recent stream with Ninja and Drake, it was one of the most comfortable pieces of content. It went on for four hours and had a huge following.”
This particular stream showing rapper Drake and eSports player Tyler ‘Ninja’ Blevins playing the game Fortnite, broke records in March as the most viewed stream ever on Amazon-owned streaming site Twitch, attracting 635,000 concurrent viewers.
Other brands are taking a different approach to working with players. In March, Manchester City added another player to its eSports team, which represent the football club in global FIFA tournaments on the PlayStation 4 (PS4) console.
The addition of Kai ‘Deto’ Wollin, who is Manchester City’s second eSports signing of the season, alongside Marcus ‘ExpectSporting’ Jorgensen who joined in December, takes the total of eSports players across the City Football Group to four.
Speaking at the time of the announcement, City Football Group chief marketing officer, Nuria Tarre, explained that the club is looking to tap into the growth of eSports over the past two years and use its presence in the gaming space to reach a “younger audience”.
Creating a richer experience
Aside from the sponsorship arm of the business model, eSports is expected to generate $173.8m from advertising in 2018, up 23.8% on 2017, and $160.7m from the sale of media rights, a rise of 72.1%.
According to Newzoo’s estimates, the remaining revenue will come from money generated by game publishers ($116.3m), up 11% year-on-year, and merchandise and ticket sales ($95.5m), an increase of 16.2% on 2017. North America is expected to generate the most eSports revenue in 2018.
By 2021, Newzoo’s data suggests global eSports revenues will rocket to $1.65bn, $1.4bn of which will come directly from brand investment.
Furthermore, over the next three years eSports media rights revenues are expected to double. This covers the rights to show eSports content on any channel, including payments from online streaming platforms such as Twitch to broadcast live tournaments.
eSports really is a lot more authentic in the way it’s portrayed compared to a lot of the other sports sponsorships we’ve done in the past.
Matt Chapman, Turtle Wax
Advertising in the eSports environment can appear during live online streams, as TV advertising on eSport channels like Ginx TV in the UK, or via on-demand video. Adverts can be played in the breaks between matches, set up as stingers on game replays or as product placement on stage. Most major advertisers prefer to have their advertising positioned permanently on screen as a logo overlay or other form of messaging.
“If you’re watching a game there are spaces on the screen of things that are important for the viewer to be able to see and there are spaces that are less important,” explains Luke Cotton, director of consultancy Code Red Esports.
“If you’re a viewer you’re not missing anything if those spaces go away, so you get overlays of logos of brands that could either be a fixed graphic for the entirety of any in-game shot or it could rotate between multiple sponsors.”
Lang has seen developers like Blizzard Entertainment and Riot Games build their games with the ability to include in-game advertising, branded skins and equipment that can be bought or exchanged within the game.
“Remember, the fans of these games are hugely tech-savvy – if they can block an ad while watching a stream on Twitch, they will. So I see embedded branding through Shoutcasters [eSports commentators] or ads within the game-play itself becoming the accepted norm,” Lang adds.
There is also a growing interest in franchise models in the style of the NFL and NBA in the US. Riot Games, the developer behind League of Legends, set up a North American and European League of Legends Championship Series in 2013. Teams play each week across a nine-week season with three weeks of playoffs, after which the top teams in each region plays in the World Championships.
Last year Blizzard Entertainment created the Overwatch League. Sponsored by computer giants HP and Intel, the Overwatch League features 12 teams made up of salaried players across two divisions, representing major cities in Asia, Europe and North America. In January, Twitch signed a $90m two-year deal to broadcast every match of the Overwatch League.
Twitch has developed specific products to monetise the Overwatch League streaming environment. This includes allowing fans to buy virtual goods called ‘bits’ that they can use to support their favourite team or player. Buying the ‘bits’ enables the user to unlock ‘hero skins’ within the game and other features native to the Twitch platform.
Steve Ford, Twitch vice-president of sales for Europe, believes the interactive nature of eSports will force traditional sports to up their game if they want to attract millennials.
“As young people are experiencing the interactivity of all those overlaid features to the video screen and are able to chat to people all over the world, suddenly the idea of watching a football match on the TV at home becomes quite boring,” said Ford, speaking on a panel at Advertising Week Europe in March.
“There’s a young audience coming through that is becoming so accustomed to a really rich, engaging and enhanced experience through gaming and eSports. We’ve carried the NFL and it’s a really interesting experiment for us. You’ll see more sports appearing on Twitch and it will just enhance the experience for the user, so I don’t see how traditional sports can stay as they are now.”
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Phvntom, Inc. is a digital marketing company located in Boise, Idaho that creates websites, apps, and full-scale promotions/campaigns for other businesses. The views and opinions expressed in this article are strictly those of its authors and were not written by Phvntom. This article was originally published by Marketing Week.