Why smart CMOs are betting big on esports

Coronavirus-imposed cancellations of major sporting events have left fans hungry for alternative entertainment, paving the way for CMOs to take a chance on the burgeoning esports market
Brand sponsorship of esports teams is already big business; here, Rasmus Winther of G2 Esports in action on day two of the League of Legends 2020 Worlds Group A taking place in Shanghai in October
Brand sponsorship of esports teams is already big business; here, Rasmus Winther of G2 Esports in action on day two of the League of Legends 2020 Worlds Group A taking place in Shanghai in October

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.

We are seeing brands like TikTok, Kappa, BMW, Mercedes and Puma entering the arena

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.