Brands See Esports As A Risk And They Shouldn't

Industry Guest Post: Chris Blivin is Director, Commercial Partnerships & Esports for Lagardere Sports.


Why aren’t more brands using esports as a marketing platform? It reaches an attractive attractive millennial demographic. From the classical marketing viewpoint, the customer lifetime value of the esports millennial is significant for brands and worthy of meaningful marketing spending.

The answer to why brands aren’t taking advantage of esports is simple: perceived risk. No one wants to be laughed out of the room for suggesting an investment in a platform that few understand or are familiar with. Esports is still in its infancy. Twitch, the largest digital streaming platform for gamers, still isn’t mainstream outside of gaming and esports communities. Sponsorship investment decisions are also often emotional, no different than anything else we invest our time and money into. Every sponsorship opportunity must navigate the personal prejudices and preferences of the individual decision maker in the organization.

As someone who believes in the long-term value of esports as a legitimate platform, it’s my job to “de-risk” esports for brands and to help educate decision makers on why investing in esports is not the risk it’s perceived to be. So, let’s walk through some of the biggest obstacles to overcome:

 

COMPLEXITY

Esports is complicated, and we don’t trust what we don’t understand! There are so many different game titles, genres, tournaments, leagues, and such: “Who is watching what?”; “where is my audience engaging?”; “am I better off sponsoring a league, a tournament operator or a gaming publisher?” The fragmentation that defines the professional esports landscape makes it intimidating for brands to feel confident about their capability to come in and tell their story in a cohesive way.

Additionally, there is a high degree of uncertainty regarding esports teams. As it currently sits, the majority of esports teams can be viewed like American college sports, which have many different teams competing across different sports under the same “Ohio State” or “Alabama” structure. Most major esports teams have a professional roster across a multitude of games — for example, Fnatic has rosters for at least seven different esports, like Dota 2 and Vainglory. This can make things confusing for a brand looking to partner with an esports team. Understanding which teams are part of the package, which assets you’re getting access to, and the social numbers associated with each team can be complicated.

Yet, as esports matures, we will continue to see a consolidation of tournaments and leagues into simplified solutions that brands can grab on to. We are already beginning to see the “professionalization” of esports from larger game publishers in the form of Activision Blizzard creating the Overwatch League and Riot creating the North American League Championship Series.

It is important that the leagues, tournament operators, and game publishers create desirable assets that mimic traditional sports-style sponsorship opportunities that brands can trust and attach themselves to, without compromising the unique culture of gaming. At the same time, brands will need to be open to leaving their comfort zone to work with gaming rights holders to create innovative content that reaches their target audiences in ways traditional sports properties cannot.

Teams will have to work hard to simplify their assets. Creating separate social accounts for each team is one way they can help increase clarity about the social reach that each team has, which will help establish trust with brands.

 

AUDIENCE MISUNDERSTANDING

The esports audience is fickle, opposed to marketing (many use ad blockers), nuanced, and risky to try and communicate with. The esports industry has excessively cautioned brands that if you “do it wrong”, the esports audience will turn on you. It’s hard to fault brands for being afraid to invest in esports – the risk of the community rejecting their product and the potential damage to their brand image isn’t worth it — a “first-mover disadvantage,” as it were.

In addition to the attitudes of the fans, there is also skepticism around the size of the audience. Numerous reports detail large audience numbers and project significant growth, yet, you probably don’t know anyone yourself who you’d categorize as an esports enthusiast/fan. “If there are so many fans, why don’t I know any? Where are they all hiding?“

While there are elements of truth to these statements, there are a couple factors to consider. First, people are very susceptible to false-consensus bias. They think that everyone they associate with is a fair representation of the population at large, causing them to have a false understanding of reality. WWE is a perfect example of this – it has one of the top 5 most valuable sports brands globally (WrestleMania), yet, depending on the circles you run in, you may not know any fans.

Secondly, it’s a mistake to assume that only esports fans are fickle or opposed to bad marketing. The difference is that the established major properties (NBA, NFL, MLB, etc.) have been around longer and brands can mitigate their risk by referencing what has, and what has not, worked when creating current campaigns.

 

MEASUREMENT

Now more than ever before, marketers are being put under immense pressure to show return on investment on all sponsorships. The trouble is, with the bulk of esports being consumed digitally and socially, it can be hard to get accurate data on who is consuming the content and where they’re located, not to mention fake accounts inflating social media numbers.

There are a number of traditional research firms looking to tackle the problem but primary research studies can often be expensive and have a high variance of accuracy. If a brand is going to invest in an esports sponsorship, it is important to include a brand tracking study as part of the asset package.

It may also be worth the effort for your brand to create a dedicated esports social channel, similar to what Coca-Cola and Red Bull have had success doing. This is helpful for a few different reasons. First, it offers the opportunity to create engaging content and have it live on your own channel, plus the social media channel of the property you’re investing in. Second, it’s a good way to get feedback on both how effective and efficient your sponsorship is working. Third, it’s an easy way to quickly get data about who is noticing your brand. Creating additional touch points allows for further customer engagement.

Lastly, one final way for brands to combat the digital/social measurement dilemma is to invest in the experiential component of your esports sponsorship. Brands who have a meaningful on-site presence at esports events create the opportunity to amplify their connection with the esports industry and collect their own primary data.

De-risking esports won’t happen overnight. It takes time to educate people and build trust. But, brands that invest in esports and take advantage of this early window will see more long-term commercial success as the industry matures.

TNL Esports Brand Tracker 002: Coca-Cola

TNL Take: Coca-Cola continues its tradition of esports brand integration by working again with publishers and theaters to hold viewing parties. They have previously done this for the League of Legends Finals and the Overwatch launch.

This year Coca-Cola partnered with publisher Hi-Rez Studios for the Smite 2018 Championship which occurred this past Sunday.

Coca-Cola Smite Viewing Party (Photo: Regal Cinemas)

Coca-Cola Smite Viewing Party (Photo: Regal Cinemas)

Two interesting points on this partnership. Previously, there had been a minimum number of tickets that needed to be purchased for the esports event to happen. After checking a few of the theaters, this requirement has been removed for the Smite Championship.

Second, the swag that was given out previously were branded cups or thundersticks.

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For this partnership, Coca-Cola and Hi-Rez will be giving out thundersticks in addition to exclusive digital items that were given to those that attended Hi-Rez's expo last week. This is super smart to include the same exclusive items for those that weren't able to travel to the expo.

I'd expect going forward, Coca-Cola and their publisher partners will continue to push both physical and digital goods with their their viewing parties.

TNL Esports Brand Tracker 001: Progressive

TNL Take: As we start the new year, time to reset the Brand Tracker for 2018.

Kicking off this year, was Progressive's continued partnership with the Esports Arena based in California. Progressive held several programs there last year and started things off in 2018 with a 24-hour "Hearthstone Rat Race: Race to Legend" event.

The integration included on site placement as seen in the cover image along with signage in game:

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Followed by promotion across social channels as well:

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Nothing extraordinary with the integration but as always great to see a blue chip brand like Progressive continuing to make investment within esports.

While GEICO has owned mindshare within Insurance for esports, 2018 could see the brand category become one of the fastest growing.

TNL Esports Brand Tracker 107: Wendy's

TNL ESPORTS BRAND TRACKER 107: WENDY'S

TNL Brand Tracker 107: Wendy's and EA Madden NFL (Photo: Twitter Blocky)

TNL Brand Tracker 107: Wendy's and EA Madden NFL (Photo: Twitter Blocky)

TNL Take: Welcome Wendy's to the esports pool.

This past week saw the company enter esports with a partnership with EA and their Madden Club Championship Series.

Previous brands have included Gillette, Pepsi, Buffalo Wild Wings, and Snickers to name a few.

TNL Esports Brand Tracker 107: Wendy's and EA Madden NFL (Photo: Twitter xxxBalkino6xxx)

TNL Esports Brand Tracker 107: Wendy's and EA Madden NFL (Photo: Twitter xxxBalkino6xxx)

While Wendy's sponsorship integration of the Miami Dolphins leg of the Club Championship wasn't anything out of the ordinary; it's great to see another brand enter the esports ecosystem.