5 Reasons to Get Ahead of the Game with eSports Marketing
“It’s not about ‘is it happening?’ It’s already happening.”
– Alban Dechelotte, The Coca-Cola Company
Recently, Turner Sports, Hothouse and AMA Atlanta presented a panel discussion featuring influencers from different areas of the eSports world.
Hosted at Turner’s new ELEAGUE studio, the event was designed to spark a conversation among marketers about the business opportunities that are rapidly emerging for brands to break into this industry.
After presenting an introduction on eSports to attendees, Christina Alejandre, VP and General Manager of ELEAGUE for Turner Sports, moderated a panel discussion featuring Todd Harris, COO of Hi-Rez Studios; Gerard Kelly, President of NRG eSports and Alban Dechelotte, Senior Entertainment Marketing Manager for Coca-Cola.
Although the industry is still finding its footing in U.S. markets, global brands like Red Bull, Coca-Cola and Arby’s already have well-established eSports marketing strategies. At this point, even media giants like Turner Broadcasting have started playing in this space.
The primary motive fueling all of these investments in eSports is the opportunity to engage hard-to-reach millennial males.
Here are five reasons why forward-looking marketers should keep eSports on their radar in the coming year.
1. eSports is a multi-million dollar industry in the U.S. and projected to reach $463M globally in 2016
According to recent studies, global revenues from eSports reached $325m in 2015, representing a year-over-year growth rate of 67.4%. (with North America accounting for $121m of that).
While a number of factors are driving the industry’s rapid growth, the biggest reason cited by our panelists was the fact that eSports is one of the few sports that can be efficiently scaled to a global level. Not only does it offer platforms that bring gamers together in unique ways, but it also connects fans with elite players, driving engagement and revenue simultaneously.
As marketer in charge of eSports for Coca-Cola in the U.S., as well as a French native who watched the growth of the industry in Europe, Dechelotte is often asked about the industry’s growth potential and marketing opportunities. In his mind, investing in eSports marketing is a no-brainer because it is already a growing platform for younger generations, which are increasingly becoming the prime demographic for brands.
“I don’t believe this needs to recruit people who are 30-40 and watch soccer,” Dechelotte said. “I believe this is already 200 million people and this is 50 percent of a generation, people interested in gaming. So, actually it’s going to grow by the younger demographics. The new people getting into it from day one because they are social, digital, gaming natives, and they see this as their sport.
2. eSports is a full-fledged spectator sport with unbelievable engagement rates
Many marketers are unaware of the unique opportunity that eSports provides to reach highly engaged audiences – most importantly, highly engaged Millennial men between 18-34. In 2015, it’s estimated that 205 million people watched eSports around the globe.
Not only that, but people in general may not realize that eSports athletes are not just sitting in the dark playing video games in their parents’ basements, they’re competing in national arenas for millions of people. For example, three years ago, a League of Legends Championship was hosted at the Staples Center. Not only did that event sell out, but it did so in 10 minutes flat. Not even Taylor Swift concerts sell out that quickly.
“eSports is growing, and it’s already big,” Kelly stated during the panel discussion. “The accessibility to the athletes is huge. Many people have some kind of root back to video games, whether it was Nintendo or Pong. Many marketers can remember playing those games as kids.”
“The thing is that not every kid is going to play football. Not every kid is going to play baseball or a traditional sport in high school or college. But even the high school and college basketball and football players are going home and playing Call of Duty at night. The broad market is really why we’ll see growing success over the years.”
3. It is an industry built on authenticity
“Authenticity is the word you’ll hear probably at most marketing conferences these days,” Harris said. “Certainly at eSports events that’s the main guideline. The community can sniff it out if it’s not authentic.”
With consumers having so much power along the path to purchase, authenticity and transparency are becoming increasingly important guiding principles for brands. Since marketers, promoters, publishers and teams in the eSports industry have long encouraged unfiltered feedback from the passionate gamers who make up their fan base, they can offer valuable insights to brands that want in.
As part of its new entertainment and eSports strategy, Coca-Cola has made it a priority to build relationships with eSports influencers to increase its relevance with those audiences.
As part of its new entertainment and eSports strategy, Coca-Cola has made it a top priority to build relationships with eSports influencers to further grow their presence in the space and increase relevancy with those audiences.
For Coca-Cola, the long game is where it’s at. They don’t force players to endorse their products – they choose to work with players who are already engaging with the brand to make the product integration and endorsements feel natural and organic. For instance, when Overwatch was launched, they sent out real life lute boxes to influencers as a way to start a conversation and potentially drive future endorsements and product plays.
4. eSports teams are pulling big players from traditional marketing spaces
This year, NRG eSports decided to bring in a CEO to manage the business side of their team – and selected the head of publisher relations and business development for Apple, Inc.’s mobile advertising division. He has been charged with growing revenue from broadcast rights and sponsorship deals, which is starting to sound eerily similar to now traditional sports business organizations are modeled.
Although it’s too early to tell, there is a very good chance that more plays like this will be made in coming months — because it’s simply a smart business practice. As this industry continues to expand and grow, why wouldn’t eSports organizations recruit battle-tested executives from traditional sports and marketing positions to grow revenue and build stronger business models?
5. eSports tournaments are a marketing platform for brands and publisher
For those who may not be privy to eSports, Harris and his team are the masterminds behind Smite, which is a mythology-based role playing game that currently boasts 20 million players to date. Despite the fact that it is considered a popular eSports game in this space, that is not where the company makes its money.
According to Harris, for game publishers like Hi-Rez Studios, gaming tournaments and eSports are not a major sources of revenue today. For many in fact, it’s a cost center.
“It’s a marketing exercise,” Harris said. “It’s a content marketing exercise for the publisher.”
However, the reason it’s worth doing is because with more Smite eSports content in the world, their players will be engaged with the game. Although the game is free, players might play an extra month or two and then spend money on costumes and other virtual items in the online store.
According to Coca-Cola’s Dechelotte, brands would be wise to get in the eSports marketing game while it’s still a still a bargain.
“I believe there is now a gap between the market share of eSports in pop culture and the level of investment of the brands,” he said. “It’s not about ‘Is it happening?’ It’s already happening.”