Photo: Esports Arena
Brands and retailers get in on the esports marketing game
Esports, or competitive gaming, has either surpassed or is close to exceeding $1 billion in global revenues, according to studies. And advertisers are increasingly recognizing the activity’s potential to reach the coveted Millennial demographic.
“Esports fans have unique characteristics that make them more elusive but potentially more lucrative for marketers,” wrote eMarketer principal analyst Paul Verna in the research firm’s first forecast on esports and gaming revenues. “They are typically young, TV-averse Millennials who have higher-than-average disposable income.”
Separate research published in “The Esports Report” from the Video Advertising Bureau found a similar favorable view on the esports demographic:
- Sixty-five percent of esports fans are Millennials, with an average age of 26;
- Sixty-two percent are male;
- Fifty-eight percent are over the age of 25 and live with kids in their households;
- Forty-three percent have an annual household income of $75,000+, with 31 percent over $90,000;
- Thirty percent are more likely to be multicultural.
“Esports deliver a Millennial male-skewing fan base with a deep ‘scale of attention’,” wrote Video Advertising Bureau in the report. “This hard-to-reach audience is passionate and highly-engaged with their favorite teams, players, games and leagues across digital & TV platforms.”
EMarketer predicted esports’ digital advertising revenue will more than double from $102.5 million in 2017 to $213.8 million in 2020. With a boost from mobile access, viewership of games online in the U.S. is expected to expand 18 percent to 30.3 million in 2019 and reach 46.2 million by 2023. The two leading viewing platforms are Google’s YouTube and Amazon-owned Twitch.
Tournaments are also being increasingly aired on ESPN, TBS, Disney and other networks.
Corporate partnerships and monetizing video content have been the main advertising entry into the category. A wide range of brands sponsor events, and Nike recently signed up its first esports player and team.
Among retailers, Walmart and Best Buy last year announced esports sponsorships that included introducing exclusive lines of gaming PCs. Giant Food last year partnered with Procter & Gamble’s Old Spice, Gillette and Tide brands, Nestlé’s Outsiders Pizza brand and Chobani to support the inaugural season of the esports NBA 2K League team Wizards District Gaming.
Both eMarketer and Video Advertising Bureau found esports fans open to marketing messages embedded in the esports experience, whether sponsorships, branded videos, in-game integrations, influencer-driven endorsements or traditional ads.
- Newzoo: Global Esports Economy Will Top $1 Billion for the First Time in 2019 – Newzoo
- US Esports Ad Revenues Will Grow 25% in 2019 – eMarketer
- The Esports Report – Video Advertising Bureau
- Esports Arena Is Set To Launch Inside Walmart Stores – Esports Arena
- Game Like A Pro With New Fnatic PC Gaming Equipment – Best Buy
- Giant Food Announces Partnerships with Proctor & Gamble, Nestlé and Chobani for Wizards District Gaming – Giant Food/PR Newswire
- Activision Is Bringing Esports Franchises To A City Near You – Advertising Age
- As Esports Gain in Popularity, Advertisers Are Coming to Play – Barrons
Discussion Questions
DISCUSSION QUESTIONS: Do you see a broad or niche opportunity for retailers and brands to tap into the growing popularity of esports? What are the inherent challenges for retailers and brands looking to connect with esports fans?
Poll
BrainTrust
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
Dan Frechtling
CEO, Boltive
It’s a really big opportunity for retailers and brands that target this demographic. As the industry continues to grow, its stars are ripe to become viable spokespeople for a wide variety of products and brands. A recent report cited that several esports stars are now being paid in excess of $300k/yr. The industry is definitely a viable career path for the best players. The challenge around marketing to this group is retailers and brands have to ensure that they come across as authentic — “Posers” will be quickly discarded and esports fans and gamers will walk away from any brand or retailer they see as inauthentic.
What started out as a niche is becoming a broader opportunity to market to a recognized segment of consumers. 30 million consumers in this demographic (growing by 50% in the next three years) may not seem like a lot, but it is such a clearly defined the population, that it makes sense to pay attention to them. Influencer marketing may play a big part of the strategy.
Flying into Las Vegas for Oracle #MCX and seeing a giant banner spread across the top of a casino with the words ESportsArena says it all. Esports is just beginning to take off with a much more significant focus point for advertising. Kids today are playing Fortnite virtually with their friends rather than the age-old baseball in the street or football in the park. Esports are hooking kids early, and Millennials are just the first wave in this potentially massive influence space.
Of the differences between conventional sports and esports, the athletes are the most intriguing to me.
Both professional tournament players and “streamers“ come from all walks. Their audience can identify with their favorite players because performance doesn’t rely on genetic physical traits like height, speed, and body mass.
These athletes can engage with their fans with their gaming prowess and their wit, and benefit from video and social channels that can be live but are often recorded and replayed.
For advertisers, this means that there are traditional promotional strategies in esports and novel endorsement-based tactics. Players carry high attention with their followers. As long as the athletes stay authentic and don’t become too commercial, they carry remarkable influence.
Esports is a huge market in certain regions like Korea, and growing in other parts of the world. Just like any sporting endorsements, it comes down to matching the demographics against what the retailers and brands are targeting. Just like with other sports, you have to watch for “off the field” behavior issues; other than that, it works like any sports endorsement program.
This is a broad opportunity for retailers and brands, as esports are growing fast and is far from the niche it once was. Esports fans aren’t the biggest fans of traditional advertising, though, being young, media-savvy and TV-averse. Businesses need to find new ways to market to this segment and focus on sponsorships with top players.