The esports industry has gained significant momentum in recent years, with millions of people around the world tuning in to watch competitive gaming tournaments. As a result, brands that are not traditionally related to gaming have started to recognise the potential of this market and are actively pursuing strategies to reach this young and tech-savvy audience. We will explore how brands are leveraging esports as a marketing platform, the challenges they face, and the future trends in the industry.
The Rise of Esports as a Marketing Platform
Esports has a strong demographic appeal to younger, tech-savvy audiences who are notoriously difficult to reach through traditional marketing channels. Recent statistics show that the average age of esports viewers is around 26 years old, with a majority falling between the ages of 18 and 34. Additionally, studies have found that approximately 70% of esports enthusiasts have a higher level of tech-savviness compared to the general population.
This demographic appeal is supported by various factors. Firstly, gaming and esports are deeply rooted in digital technology, requiring a certain level of technical knowledge and familiarity with gaming platforms and devices. This makes the audience more receptive to digital advertising and sponsorship opportunities within the esports ecosystem.
Moreover, the younger age group is more likely to engage with online content and spend a significant amount of time on social media platforms. This presents an opportunity for brands to leverage social media channels, such as Twitch, YouTube, and Twitter, to engage with the esports community and build brand awareness.
By partnering with gaming influencers and esports organisations, brands can tap into this demographic appeal and gain credibility within the community. Sponsored tournaments, teams, and branded content provide avenues for brands to connect with the younger, tech-savvy audience on their terms, fostering brand loyalty and generating positive brand associations.
According to Statista, the Esports market is projected to reach a revenue of US$3.8bn in 2023, with an annual growth rate of 9.54%. This significant growth presents a promising opportunity for marketing in the Esports industry.
With a market volume of US$2.1bn in 2023, Esports Betting stands as the largest market segment. This indicates the potential for targeted marketing campaigns and sponsorships within this segment to drive revenue and engagement.
The United States, being the top revenue generator with a projected market volume of US$871.0m in 2023, presents a prime market for esports marketing activities. Companies can leverage this market to enhance brand recognition and capture a significant share of the growing esports audience.
Furthermore, the projected total of 865.2m Esports users by 2027 showcases the expanding reach and popularity of the industry. With a user penetration rate of 11.4% in 2023, increasing to 13.9% by 2027, marketers have the potential to tap into a large and engaged audience. The average revenue per user (ARPU) of US$5.40 further highlights the potential for monetisation and targeted marketing strategies.
Case Studies: Non-Endemic Brands in Esports
Brand sponsorships are a classic model that has been adapted to professional online gaming competitions. In esports, sponsorship is a significant revenue stream, accounting for $837.3 million, which is nearly 60% of global esports revenues. Esports leagues often have multiple official brand sponsors. For example, the Overwatch League has previously named T-Mobile as their wireless sponsor and Coca-Cola as the official global beverage sponsor. Coca-Cola has been an early adopter of non-endemic brand sponsorships, starting as far back as 2001. They have sponsored Riot Games' League of Legends under the Coke Zero brand.
Sponsorships are a key channel for driving brand visibility during streams and through branded merchandise. For instance, Coca-Cola has promoted Overwatch League teams with customised Coke bottles. One creative example of brand sponsorship in the esports industry is KIA's sponsorship of the League of Legends European Championship (LEC). They provide KIA vehicles to all LEC players during the tournament and create online content. The sponsorship has been renewed for 2023, marking its fifth consecutive year. KIA has also launched a series on YouTube called "Kia Mic Check" to share behind-the-scenes content from the competition. Another notable sponsorship is the deal between the Spanish team "Giants" and Nestle's brand KitKat. The KitKat logo and messaging will be visible on team jerseys, social media content, streaming channels, and more.
Challenges and Considerations of Esports Marketing
While esports provides a tantalising new marketing frontier for non-endemic brands, it is not without its challenges. The most significant among these is the essential need to understand the gaming culture and community. Gaming is a unique space with its own intricate nuances, language, and norms that non-gaming brands may find complex and elusive. Brands run the risk of alienating this audience if their marketing efforts appear inauthentic or out of touch with the gaming community's values and interests.
To mitigate this, brands can partner with established esports entities that understand the gaming culture and can guide the brand's marketing efforts. By collaborating with gaming influencers, brands can also gain insight into the community and increase their visibility. These influencers are often trusted figures within the community and can help brands navigate the gaming culture effectively. Also, they can act as a bridge between the brand and the audience, endorsing products or services and creating authentic connections.
Another challenge is the rapidly evolving nature of the gaming industry. As new games, platforms, and technologies emerge constantly, brands must remain agile and adapt their marketing strategies to keep pace. Regularly monitoring trends, engaging with the community, and staying informed can help brands stay relevant in this dynamic environment.
The Future of Esports Marketing: An Exciting Blend of Technology, Education and Diversity
Esports marketing is on the cusp of intriguing developments, driven by advancements in technology, greater integration in educational institutions and increased involvement of women and diverse groups in gaming. Virtual Reality (VR) and Augmented Reality (AR) are set to revolutionise esports marketing. These technologies offer immersive experiences, establishing deeper connections between brands and consumers. For example, brands could sponsor VR/AR-enabled tournaments, offer VR/AR product demonstrations, or create AR scavenger hunts tied to esports events.
The integration of esports into education also presents new marketing opportunities. As universities and schools invest in esports programmes, brands can sponsor these initiatives, fund scholarships, or provide equipment. This not only enhances brand visibility among students but also positions brands as supporters of education and youth development.
"Esports marketing is at the forefront of exciting advancements, driven by technology, education integration, and diverse gaming communities," says Toby Oddy, CEO of Digital Fuel Performance "Virtual Reality (VR) and Augmented Reality (AR) are poised to revolutionise the industry, offering immersive experiences that forge stronger connections between brands and consumers. Integrating esports into education presents new marketing opportunities, allowing brands to support and engage with students while enhancing their visibility. It's an exciting time for esports marketing!"
Diversity is a significant trend in esports marketing, offering new marketing opportunities. With more women and people from diverse backgrounds participating in esports, brands have the chance to engage with a broader, more inclusive audience. This is particularly relevant considering France's ban on English gaming jargon by government workers. Read more about it here, as it highlights the importance of cultural diversity in communication. A study has shown that shared common ground allows gamers from different cultural backgrounds to communicate and collaborate effectively. By embracing diversity and leveraging the semi-virtual identities built within the esports community, brands can create more immersive, educational, and inclusive campaigns that resonate deeply with their target audience. This not only enhances brand image and loyalty but also opens doors to new marketing possibilities in the ever-evolving esports landscape.
Conclusion
In conclusion, esports presents a vibrant and dynamic platform for non-endemic brands to engage with the youthful, digitally native audience. The potential of brand sponsorships, collaborations with esports entities, and partnerships with influencers facilitates authentic connections within the gaming community. The challenges, though present, can be navigated with a deep understanding of the gaming culture and continual adaptation to the changing landscape. The future holds exciting developments with the advent of VR/AR technologies, integration of esports in education and increased diversity within the gaming community. Brands that capitalise on these evolving trends can significantly enhance their visibility and resonance within the esports sphere.
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