With Global Gaming revenues hitting $152.1 billion and global esports revenues growing to $1.1 billion, every CMO in the world is looking at platforms like Twitch and games like Fortnite to activate with Millennials and Gen Z. The esports industry is truly the Wild West; the space is filled with millions of dollars in untapped advertising and sponsorship potential targeted at the hardest to reach group of consumers.However, it’s crucial for marketers to have a solid grasp of the space before they dive in head first. Here are our top 3 concepts for marketers to understand in esports:
1. Not All Gaming Video Content (GVC) is Esports
One of the largest misconceptions within the larger gaming industry is the confusion between Esports and broader Gaming Video Content (GVC). We frequently hear something along the lines of, “We’re doing something in esports, Ninja and DrLupo are playing Fortnite…”. While esports falls into the bucket of Gaming Video Content, not all Gaming Video Content is esports. Here’s a quick breakdown:
Gaming Video Content: Video content created by professionals or influencers focusing on game play and distributed as either Live or VoD content on platforms like Twitch, YouTube, Mixer or Facebook.
Esports: Organized Gaming competitions where teams or gamers play against each other to win either status or prizing.
To help contextualize the size of these categories, from Jan to July, 2019, Western Esports Fans watched approximately 725.02M hours of esports content on platforms like Twitch, YouTube Gaming, Mixer and Facebook. This content only makes up less than 10% of the 7.5B hours of watched content on these platforms.For advertisers entering the ecosystem, there should be a clear understanding of what area of the market the brand is targeting. Is this something more along the lines of a traditional sports sponsorship? Or is this an influencer activation? The distinction here is more than semantics, because it impacts strategy and tactics.
2. Sponsorship in Esports vs. Influencer Marketing
Speaking of finding a clear pathway into the ecosystem, let’s explore the differences between activating in esports vs with Influencers:Esports: Activating in esports is incredibly similar to any traditional sports sponsorship. You have franchised leagues, organized tournaments, and teams. Sponsors can show up at something like the Overwatch League (OWL) or the League of Legends Championship Series (LCS) and deploy via sponsored placements, integrated experiences and branded content. For example, Toyota is the official automotive sponsor of the Overwatch League and runs the branded content series “Access Granted.The advantage of activating through traditional esports in a league setting is the ability to build long lasting partnerships and fully integrate through the entire fan experience. -- from showing up at the stadium, to each minute of content. Brands can further reinforce the theme of their marketing. For example, the State Farm analyst desk at the LCS showcases the brand’s commitment to thoughtful decision making.
Influencers: Influencer activations are an entirely different story, and can represent a much more cost efficient way to reach gaming audiences at a smaller scale. The difference here is that the relationship (and marketing activation) is forged with the individual influencers rather than with the property or league. While league sponsorships can last weeks and net hundreds of hours in sponsored content, working through influencers brands may also activate for just one hour and reach thousands of viewers.For example, Hershey’s released a new candy bar this year in partnership with Reese’s, and turned to Ninja and DrLupo to run a sponsored Fortnite stream in celebration. Both influencers utilized rotating logo bugs and ate the new candy bar for their audience. From an investment standpoint, all that was required was an agency to generate the creative concept, and the costs associated with the influencers’ promotion. The stream generated a combined Average Minute Audience of 83K viewers across the 1.5 hr stream – fairly comparable to the audience metrics for the OWL (81.7k) and LCS (89.5K).It’s not just about audience, however. Although Ninja’s stream may have generated more viewers, it's important for brands to understand the value that they are receiving in each event. While Ninja’s higher number of viewers may watch a simple logo activation during a small stream, a more select or targeted group of LCS fans may watch more integrated content across an entire season. Brands may also have more control over the messaging via a true esports sponsorship vs. an influencer initiative.
3. Understanding and Identifying KPIs in Game Streaming
At Stream Hatchet, we help marketers to interpret the complexities of game streaming metrics. One of the largest challenges in the industry is that the metrics provided by game streaming platforms do not pair up neatly with traditional KPIs in other channels such as Television or Social Media. That being said, it’s not impossible to find some similarities. Important KPIs that we track in esports include:
Average Minute Audience: A measure of the average concurrent sessions viewing a esports/game streaming broadcast a minute across the entire broadcast. This metric is most similar to the Average Audience metric provided in television, however it is based on an actual count (vs. the panel methodology used in TV).
Hours Watched: A measure of combined time spent watching an esports/game streaming broadcast over time. The best way to contextualize the calculation of this metric is to think about it as a combination of Concurrent Viewers and Airtime. Hours Watched is a helpful way for advertisers to understand how much connection and engagement they are getting with their audience. As in any channel, advertisers must assess the relative importance of reach vs. engagement (based on their overall objectives).
Peak Concurrent Viewers: The peak number of concurrent active sessions viewing an esports/game streaming broadcast. For advertisers, it's important to understand the crests and valleys in streaming so that they can value their ads correctly. For example, in traditional TV ads during the Pepsi Halftime show will most likely earn more media value for brands than ads during the Superbowl post game report.
It is crucial for brands to receive 3rd party measurement and analytics for their investments in esports, just as it is in other media channels. This assures that neutral, fact-based data will be available to inform determinations of return on investment.As with any other marketing channel, it’s vital for brands and their agencies to understand the activation ecosystem and measurement best practices in esports. Once brands make it over the initial hurdle, it’s really not too different compared to any other sports or marketing campaign. Brands can further shorten their learning curve in this area by working with expert, 3rd party measurement firms to assure that they select KPIs which are aligned with their objectives and that audience data used to inform ROI evaluations is reliable.To learn more about 3rd party measurement approaches for your esports initiatives, contact us.