Why smart CMOs are betting big on esports

Sports sta­di­ums around the world fell silent in March as major events, includ­ing the Tokyo 2020 Olympics, Eng­lish Pre­mier League, Spain’s La Liga and Wim­ble­don, were post­poned or can­celled due to the coro­n­avirus pan­dem­ic. Some games and tour­na­ments have resumed behind closed doors since, though the roar of impas­sioned sup­port­ers has been replaced with canned crowd noise mixed by sound engi­neers.

How­ev­er, there is one form of sport­ing event that has been mak­ing more noise than ever amid the pan­dem­ic: esports. As it turns out, com­pet­i­tive video gam­ing, where elite indi­vid­u­als or teams com­pete while being watched by mass audi­ences, is fill­ing a void for sports fans in the cur­rent cli­mate.

Many major online gam­ing plat­forms report­ed inflat­ed fig­ures when glob­al lock­downs kicked off in the first quar­ter of 2020. Among them was Steam, which saw usage surge in March and April, record­ing 24.5 mil­lion users play­ing at peak times against a pre­vi­ous high of 18 mil­lion in Feb­ru­ary.

Twitch, Amazon’s video-game stream­ing ser­vice has the lion’s share of the mar­ket for all gam­ing view­ers at 70 per cent. It marked an increase in view­er­ship of around 45 per cent, 32 per cent and 282 per cent for online bat­tle are­nas Dota 2, League of Leg­ends and team-based first-per­son shoot­er game Counter-Strike: Glob­al Offen­sive, respec­tive­ly, between April 2019 and April 2020. In total, the ser­vice broad­cast more than two bil­lion hours of game­play in the two months to April.

Char­lie Allen, direc­tor of glob­al brand part­ner­ships at ESL, one of the largest gam­ing and pro­duc­tion com­pa­nies that hosts com­pe­ti­tions with part­ners like Riot Games and Microsoft, says: “Esports has been the one live sports and enter­tain­ment show that hasn’t stopped. While the world of live sport ground to a halt, esports kept going.

“Our ESL esports audi­ence fig­ures went stratos­pher­ic, with some of our live audi­ences num­bers going up 200 per cent.” Demand went “off the chart” for online tour­na­ments as peo­ple around the globe were urged to stay at home.

Why brands are getting into the esports market

Aid­ed by its abil­i­ty to tran­si­tion leagues into online for­mats, esports has also seen a sud­den spike in inter­est from tra­di­tion­al sport­ing teams and events, includ­ing For­mu­la 1 which quick­ly adapt­ed to replace grand prix stages of the 2020 sea­son with vir­tu­al events.

All of this has served to push dig­i­tal “ath­letes” and teams into the main­stream. And it has not only brought them to the atten­tion of a more diverse fan­base, but also to savvy spon­sors look­ing to forge part­ner­ships and exper­i­ment with mar­ket­ing strate­gies fit for a vir­tu­al world.

Busi­ness­es are now look­ing to diver­si­fy their media bud­gets away from live events and cap­ture audi­ences online. The Insti­tute of Prac­ti­tion­ers in Adver­tis­ing’s lat­est Bell­wether Report shows that in the three months to July, 76 per cent of mar­keters made spend­ing cuts in these areas.

Against this back­drop, some of the world’s biggest cor­po­ra­tions are now fun­nelling their ad dol­lars into the space. Four months ago, BMW announced plans to part­ner with five top organ­i­sa­tions rep­re­sent­ing teams that com­pete in League of Leg­ends US events and South Korea’s T1.

P&G, mean­while, has issued a chunk of its $6.75-billion ad bud­get to EA Sports FIFA 20 Glob­al Series, a nine-month-long series of gam­ing tour­na­ments with more than $3 mil­lion in prize mon­ey spon­sored by Gillette.

“Esports and gam­ing have become main­stream and we are see­ing this with brands like Tik­Tok, Kap­pa, BMW, Mer­cedes and Puma enter­ing the are­na,” says Trev Keane, esports part­ner­ship con­sul­tant for Lon­don-based FIFA team Tun­dra.

Keane recent­ly secured Tik­Tok and Kap­pa as adver­tis­ing part­ners for Tun­dra, with Tik­Tok tak­ing on head­line spon­sor­ship and the Ital­ian so-called ath­leisure brand design­ing the club’s uni­form. How­ev­er, he cau­tions that before div­ing in feet first, CMOs need to deter­mine the right strat­e­gy and make sure their entry to the mar­ket adds val­ue both to the com­mu­ni­ty and their own brand.

ESL’s Allen agrees, say­ing that much of the suc­cess his com­pa­ny has had with part­ners such as Intel, DHL, Voda­fone, Mer­cedes and Pep­si­Co has come down to trust and col­lab­o­ra­tion.

DHL has made a par­tic­u­lar succ“For any brand to con­nect and engage with the esports com­mu­ni­ty, they need to have a fresh, authen­tic and fun approach to the way they speak to their cus­tomers,” says Allen.

Speaking to the customers of tomorrow  

Jake Myhre, brand strate­gist at Supe­runion, has seen a big uptick in CMOs com­ing to his ad agency ask­ing for advice on enter­ing the fray. Though some tour­na­ments do take place in phys­i­cal spaces – Rock­et League, ESL and League of Leg­ends had to retool plans to broad­cast planned live events online in March – Myhre argues that because esports hasn’t faced the same lev­el of dis­rup­tion as its tra­di­tion­al rivals this year, it’s arous­ing the inter­est of brands.

The abil­i­ty to tap into a bur­geon­ing com­mu­ni­ty and sought-after demo­graph­ic is also a big draw. The aver­age age of a West­ern esports fan is 26, accord­ing to Nielsen, which is decades younger than the aver­age for most pro­fes­sion­al sports.

“The expe­ri­ence of watch­ing esports online is high­ly inter­ac­tive and social,” says Myhre. “In-broad­cast fan com­men­tary is the norm, with online plat­forms such as Twitch thriv­ing due to their abil­i­ty to fos­ter com­mu­ni­ty through their next-gen­er­a­tion broad­cast for­mats.

“Giv­en the high­ly inter­ac­tive nature of these online plat­forms, brands are able to have one-to-one con­ver­sa­tions with fans, build­ing deep­er rela­tion­ships over time, cre­at­ing more oppor­tu­ni­ty to gen­er­ate brand love through direct con­nec­tions,” Myhre adds.

As a com­mu­ni­ty that has been large­ly over­looked by main­stream brands in the past, he insists that engag­ing with gamers authen­ti­cal­ly and demon­strat­ing “a true pas­sion for and ded­i­ca­tion to esports” presents mar­keters with an oppor­tu­ni­ty to cre­ate life­long advo­cates.

Car­mak­er Ford is one such brand play­ing the long game when it comes to esports. In 2019 it launched Team Fordzil­la, which com­petes in Forza Motor­sport 7, among oth­er rac­ing titles. Ear­li­er this year, it debuted a name­sake shapeshift­ing “hyper­car” designed for the sim­u­lat­ed world.

“Rac­ing is in our DNA, so it was a nat­ur­al move for Ford to embrace the world of esports through Team Fordzil­la,” says Roe­lant de Waard, vice pres­i­dent of mar­ket­ing, sales and ser­vice at Ford Europe.

For de Waard, the audi­ence is a cru­cial part of its esports buy-in and beyond the thrills of sim-rac­ing, Fordzil­la is help­ing Ford con­nect with what he describes as the cus­tomers of tomor­row. “The best way to do it is to engage with them in an authen­tic and gen­uine man­ner, to be a part of that com­mu­ni­ty, which is what we’re doing with Team Fordzil­la,” he says.

And there’s an added bonus too. “The vir­tu­al world is the most impor­tant area for us to devel­op new think­ing that can apply to our pro­duc­tion vehi­cles,” says de Waard, reflect­ing just how valu­able esports can be to real-world busi­ness strat­e­gy.