ESPORTS REVENUES WILL REACH $696 MILLION THIS YEAR AND GROW TO $1.5 BILLION BY 2020 AS BRAND INVESTMENT DOUBLES
The explosive growth has started catching the eye of big-spending marketers including Audi, Coca-Cola, PepsiCo, Gillette and Bud Light. They are among the brands putting money into esports in hopes of reaching the sport's demographic sweet spot: males between the ages of 21 to 35 who are increasingly hard to reach via traditional advertising. For marketers able to navigate the nascent esports landscape, which one analyst group compared to the Wild West, the paybacks can be huge because gamers have shown loyalty to brands that do it right.
SPONSORSHIP & ESPORTS
Sponsorship revenue is expected to reach $266 million in 2017, while ad spending on esports will hit $155 million, according to Newzoo. That still pales in comparison to traditional sports behemoths like the NFL, which hauled in $1.25 billion in sponsorship revenue last season, according to sponsorship consultancy IEG. But esports, while still a niche, is gaining ground and is poised to enter the mainstream. Newzoo forecasts that sponsorship spending will reach $655 million by 2020, while ad spending in the esports industry will climb to $224 million.
GLOBAL REACH & LONGEVITY
Intel Extreme Masters is the longest running esport tournament in the world, put on by ESL (Electronic Sports League) and Intel since 2006. The cities change each year, with this season of IEM taking place in Shanghai, Oakland, Gyeonggi, South Korea and Katowice, Poland. Poland is Intel’s biggest event, in 2016 boasting 115,000 attendees. At the time, it was reported as the largest single esport event in the world. The Katowice event, which took place over two weekends Feb. 25-26 and March 3-5, stretches from an arena that holds 12,000 fans to an expo convention centre with multiple stages and thousands of more seats, and more than 20 exhibiting partners.
Coca-Cola, which pours big budgets into Olympic sponsorships and soccer worldwide, now pours itself into esports, too, with a formula it would implement for any traditional or mainstream sports marketing plan: the chance to add experiential value to the fans at big events as well as provide access.
Coca-Cola: Coke has been a major sponsor of League Of Legends for the past several years, and has organically built their reputation in eSports. @CokeeSports is the brand’s second biggest Twitter account (after @cocacola) and they recently launched eSports Weekly in collaboration with IGN.
Taco Bell: Taco Bell is continuing its tradition of providing free food to creators with the Indie Game Garage. The contest gives indie game developers $500 of free Taco Bell as well as 6 months of discussions and mentorships with other game publishers, leading streamers and other members of the gaming community.
Intel : Intel sponsors the Extreme Masters, a tournament series that has been running since 2006 featuring game titles like Counter-Strike, League of Legends, and Starcraft. More than 100,000 people came to their latest large event in Katowice, Poland.
Red Bull: Unsurprisingly, Red Bull has extended its approach to marketing-through-extreme-culture-sponsorship to eSports, creating an entire digital hub for content around the industry and sponsoring teams and events.
ESPN: In a major move, earlier this year ESPN launched a new section on its website exclusively dedicated to eSports. This shows that the broadcaster is taking it seriously enough to not want to be flanked by a new publication who simply got there first.
BUILDING AN EFFECTIVE ESPORTS MARKETING STRATEGY
The successful brand strategy will take and integrated approach to custom programming, promotions, and brand experiences, and will consider the following tenets:
- Connect with the community. Long term esports success starts with knowing the esports target. What’s the right game? Who are their players? What are their age brackets? What is their socio-economic status? What are their interests?
- Understand where your brand fits in. Part of creating an effective esports marketing strategy is understanding how your brand is used and what it means to its users, and making this part of your positioning statement and messaging. The only way to resonate with esports consumers is to talk in the language that they will understand.
- Integrate digitally. It’s where this consumer lives and breathes. While most of the attention tends to focus on marquee tournaments and events, it’s important that your strategy is fully integrated—across events, media, public relations, advertising, social and promotions—to maximize how your brand is viewed by millions of esports consumers worldwide.
- Look beyond the titles. Aligning with individual game titles may not be an optimal approach. Regardless of which games are hot at the moment, elements of competition, accessibility and participation will continue to grow the esports genre as a whole. Brands can add value here.
- Engage the fan base. Market your esports participation to the esports masses. These fans and supporters aren’t just passive spectators. They are active contributors and content creators, so planting the seeds of growth now will help your brand maximize interest and participation down the line.