For brands that know how to play the game, eSports could be a winner

Competitive video gaming is building an audience that rivals traditional sports, and the industry is hungry for ad dollars

Video games are now a spectator sport. Since 2013, more people have tuned in each year to watch the League of Legends championships than the NBA Finals.

With the advent of reliable broadband and online streaming services, millions of people are interacting with games in ways that don’t necessarily involve playing them, from nostalgic casual gamers browsing videos of side-scroller speed runs to hardcore fans of elite sponsored teams. A full 40% of eSports viewers don’t play the video game they watch, according to Andy Swanson, vice president of eSports and events at Twitch, the largest portal for live-streamed video games, which was snapped up by Amazon for $970 million in 2014.

Brands already popular among gamers have been quick to cash in on an industry that is emerging as a legitimate contender for the eyes and hearts of the most coveted demographics. Coca-Cola and Red Bull boast dedicated eSports channels, and Intel has awarded more than $4.5 million in prize money in an eponymous series of international tournaments—Intel Extreme Masters — held in conjunction with the Germany-based Electronic Sports League.

But for brands and brand managers trying to break into this space, the lucrative opportunities come with hidden dangers and uncertainty. "It's the wild, wild West," said Terry Young, CEO and founder of sparks & honey, a marketing-services agency under the Omnicom umbrella. "I don't think that every brand can take the heat of what happens in this audience and this area. I think there are certain brands that are already heavily engaged with Millennials and in the media Millennials are digesting and are acting with. This is a natural extension of that."

While video games are obviously the heart of eSports’ appeal, what attracts its young, mostly male audience is far more universal: immediacy. Tournament championships draw tens of millions of viewers, and individual daily streams regularly see tens of thousands of simultaneous log-ons, even though many game sessions are archived and can be watched anytime, like a YouTube video.

Fans also have a level of access to players unheard-of in traditional sports. Twitch channels feature integrated chat rooms where players and viewers can interact in real time. "They're watching something that is happening live and interacting either with the person on the camera or the people in the chat," Swanson added. "It's like having a Twitter feed with the person that's on, so there's this neat dynamic there that’s not done in any other medium." Viewers are devoted; the average Twitch user spends 108 minutes per day streaming videos on the site. "They're kind of disillusioned with reality TV," Swanson added. 

This is where the relatively small footprint and factionalized nature of the eSports industry is an advantage over the lumbering behemoths of traditional sports. The eSports market hasn’t been consolidated (though major players keep entering the arena), so many viewers are watching independent content producers with a few hundred or a few thousand subscribers on multiple websites.

Innovation occurs much more quickly, and change is expected, even anticipated by fans. New rules and options and abilities are welcomed, play-tested and viciously critiqued, and game developers can listen to the feedback. Multimillion dollar prize purses for tournaments are often crowdfunded. A committed Dota 2 fan can justifiably feel like he or she contributed to a world championship victory.

"Professional sports leagues like the NFL, NBA, MLB have been a little slow to leverage digital platforms to engage a younger fanbase," said Matt Hill, senior vice president for global sports and entertainment at GMR Marketing.

The Wild West
But that responsiveness and casual flexibility also pose challenges for the industry, as well as brands looking to associate with it. Many of the most popular games feature magical battles between imaginary creatures viewed from the vantage point of a soaring bird or meddling god. But others are first-person shooters like Counter-Strike, which pride themselves on realistic combat and real-world weapons.

Thus far, the eSports industry has largely shied away from the sexual imagery and alcohol endemic to traditional sports advertising, but discomfort with realistic violence may signal that the eSports audience isn’t the right fit for a client. "The brand needs to understand what they're getting into," Swanson said in response to a question on the topic during a panel at last week's eSports Industry Branding Summit in New York. He said it falls to tournament organizers to make sure brands feel protected from potential backlash. "I mean if you look at the NFL now, every single Bud Light ad says, ‘Drink responsibly.’ "

The industry is also deciding how closely it wants to hew to the structure created by traditional sports leagues, but it is susceptible to many of the same issues. Professional gamers have already told stories of rampant doping with mind-affecting drugs like Adderall during important tournaments. But eSports may have an opportunity to improve on its predecessor’s track record. "ESports can learn from the missteps that traditional sports have had off the field and look at other issues like domestic violence and how to address those sorts of things," Hill said. As with traditional sports, even team games elevate a few superstars, often young men with little experience in the limelight, whose extreme focus can blind them to the pitfalls of fame. "As the sport becomes bigger and bigger, you're going to inevitably have athletes and competitors who make poor decisions off the field," Hill added.

Authentic messaging, or else
But advertisers who do decide to align themselves with the industry should still tread carefully to avoid being viewed as opportunists and posers, particularly when dealing with a culture that has long been told it lies outside the mainstream.

"It’s one of the most hard-fought, earnest, passionate, harshest cultures out there. You can't actually afford any sort of missteps," said Hosi Simon, global general manager at Vice Media. "You look at gamers being mistreated or marginalized by the mainstream for forever, so why would they trust anyone or welcome anyone into this world when they don't actually really need them?"

Simon speaks from experience. In March of this year, Vice released a poorly received eSports documentary featuring a host who never actually played a video game on camera. Simon said future coverage next year will incorporate the perspectives of more actual gamers.

Genuine overtures require an understanding of the fans and their obsessions, which might require in-house insight from actual eSports fans. Barring that, it takes time to get integrated and to learn about the culture. This is a fanbase that is used to being heard, that can talk daily to the stars and get answered immediately, then trashtalk right back. If they can turn on their idols, they can certainly turn on a corporate brand.

But gamers are used to being marketed to, and they’re willing to actively reward appeals that they find satisfying. "I find it so painfully obvious that you as a brand should get involved in what young people are insanely passionate about," Simon said. "If you can't figure it out by yourselves, don't be a marketer. It's not that hard — Marketing 101. Young people, super passionate, super social, will talk to the whole world about it. Go market to them."

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