Professional sport is a multi-billion-dollar business and in the past several decades, brands have become an inseparable part of the market.
Numerous brands, from Nike to Red Bull, can even attribute much of their success to aligning themselves with the right sports, leagues, teams and athletes.
The marriage between brands and the world of sport helped produce billionaire athletes in Michael Jordan and Tiger Woods, and it directly and indirectly allowed the world’s 100 highest paid athletes to generate over $3bn in income in 2015 alone.
Not surprisingly, there are few bargains to be had for brands looking to play ball in this market, but there’s plenty of opportunity in the nascent eSports market.
Here’s what brands interested in tapping into it need to know.
What is eSports?
eSports stands for “electronic sports” and is essentially professional video gaming.
eSports usually takes the form of multiplayer video game competitions in which professional players come together in one location to duke it out for glory and, increasingly, large sums of money that can top six figures.
Popular tournaments can see tens of thousands of spectators converge on site, and the most popular, IEM Katowice, reportedly recorded over 100,000 on-site visitors in 2015.
Events are also streamed online, where some draw millions of unique and even concurrent viewers.
How big is the market?
According to a report by market intelligence firm SuperData, the eSports market generated a total of $747.5m in revenue in 2015.
The vast majority of that ($578.6m) came from advertising and sponsorships, while $55.8m came from betting and fantasy sites and another $53.8m came from prize pools.
Just $17m and $15.9m came from merchandise and ticket sales, respectively.
These figures make it clear that eSports is still a very small market.
For comparison, consider that the world’s highest paid athlete in 2015, boxer Floyd Mayweather, Jr., reportedly earned upwards of $200m for his 36-minute fight against Manny Pacquiao in 2015 – an event that grossed over half a billion dollars in total.
How fast is the market growing?
Brands shouldn’t be turned off by the relatively small numbers.
eSports is just getting started in North America and Europe, which still account for less than half of eSports revenue.
Maturation in those markets should help propel eSports to a nearly $2bn market by 2018 by some estimates.
Evidence of growth in North America is evidenced by Turner Broadcasting, which partnered with Hollywood super-agency WME-IMG to bring eSports to cable televison this year.
ESPN and the PAC-12 Network are also ramping up their eSports coverage, meaning more and more “real” sports fans will be exposed to eSports in the near future.
How can brands get involved?
There are numerous ways for brands to break into eSports and most are familiar to brands that are already active in professional sport.
There are opportunities around event sponsorships, team sponsorships, player endorsements, and traditional advertising against digital and broadcast media properties.
With media companies like Turner and agencies like WME-IMG entering the world of eSports, many brands will find that they can tap existing relationships to explore the eSports opportunity.
Already, brands like Coca-Cola, no stranger to professional sport, have racked up years of experience in the market.
What are some of the biggest challenges?
Brands looking to get involved with eSports face numerous challenges. One is that the market, while growing by leaps and bounds, is still niche, fragmented and many of those in it retain an indie streak.
That can make it difficult for brands to navigate the waters and achieve the kind of scale they’re used to in professional sports.
Another challenge is that eSports is still, to many, a fringe phenomenon, and this can make it hard for some brands to fully embrace it.
For example, sports bar and restaurant chain Buffalo Wild Wings is sponsoring ELEAGUE, a video game tournament that is being broadcast on Turner-owned cable network TBS, and one of its ads invites viewers to enjoy the event at one of its locations.
But as detailed by VICE Motherboard’s Emanuel Maiberg, numerous ELEAGUE fans who showed up complained that Buffalo Wild Wings staff were not even familiar with ELEAGUE and only agreed to display the event on a television after some convincing.
In one case, a fan claims that a waitress referred to him and his friends as “nerds.”
Obviously, this is a case of a brand not doing a good job ensuring that its employees know about its initiatives, but it also highlights the fact that eSports initiatives might not always align well with the brand’s existing positioning.