The Business of Esports

Where can you find a highly engaged young audience? The answer is, not surprisingly, in gaming and esports. But the business of gaming and esports is more surprising as this content form is growing in acceptance and value for marketers. BIA sponsored a panel discussion, moderated by Zach Oscar, Consultant for Hocus Focus, on the State of Esports and Gaming in 2021.

Esports Landscape

In the Video Game ecosystem, there are Publishers who develop the game itself and the strategies to take the game to market. These companies include Tencent, Apple, and Sony Interactive. There are the Games themselves which is a $180billion worldwide revenue industry and growing. Currently 68% of all U.S. persons 2+ play video games. There are Game Franchises such as Mario and Game Streaming and Streamers who compose the participants and viewers and the overall bucket of esports within gaming which, according to Oscar, are organized live events and streamed digitally showcasing multiple teams and players that are akin to traditional sports, with Leagues, and have reached revenue levels of $1.1billion. For advertisers, these industries offer a rich opportunity to reach a highly engaged audience through sponsorships, native video and product placement.

Esports Audience

Nicole Pike, Global Sector Head of Esports and Gaming at YouGov, noted that, “most people are gamers,” today and that they constitute, “a broad group with lots of nuance.” From her perspective gamers represent the trends that indicate where media is heading. These gamers are, “super-passionate and traditional forms of media are not reaching them,” she added.

For David Tucker, Senior Vice President, Managing Director, US Strategy, MAGNA, gaming and esports is the place to, “reach a vital audience.” He explained that, “There has been a -54% decline in 18-49 in linear TV viewing. Look at the magnitude of figures. Amazon has seen a 73% growth in ad revenue from Twitch.” It is there, he added, where you can find a valuable audience. But advertisers are lagging, he admitted. “There is a big gap in what today’s advertisers think about (gaming) and the amount of spend,” they attach to it.

Covid’s Impact on Gaming & Esports

The pandemic, which has impacted and initially limited the amount of general sports content available to viewers, might have fueled this dramatic increase in gaming viewership. Pike believes that while there has been some impact because of Covid, especially on gaming use hours, growth would have happened anyway. “There will likely be a slowing speed of acceleration,” she explained, but added that this growth was part of an overall trend.  “Covid was the accelerant of a trend that was already in place,” which ramped up what might have been three years of growth into one year. She also believes that, “trends have stickiness,” inferring that the end of the pandemic may slow but not stop this growth.

Nick Barrionuevo, Gaming Partnerships Lead for Samsung Ads, saw a, “footprint spike at the beginning of the pandemic,” then the spike came down to a new plateau and incremental rise.

Gaming & Esports Business

For Barrionuevo, the audience shift to gaming is causing a business shift. Currently, he reported, there is more viewing on streaming than viewing to linear on Samsung TVs. “OTT content is the way to reach gamers,” he stated and added that he is working on ways to serve this audience and reach them where they are.

According to Dave Madden, Executive Vice President, Gaming and OTT, Simulmedia, “Brands have to figure out how to turn these (gaming) environments into marketing opportunities,” because Covid has created a new social structure for young consumers. To that end, he recommended co-marketing partnerships, more like major league sports.

Ultimately, for esports, gaming, and game streaming to fully compete with other media like TV, there have to be a common viewership metric that can be easily comparable. “What is the opportunity cost of moving money to gaming & esports. We need a comparative metric,” Pike stated.

For Oscar, the future of gaming and esports looks very bright. “As a young millennial myself, I can tell you that I have never owned a cable subscription and I don’t really plan on it. However, I can tell you I’ve banked hundreds if not thousands of hours online with my friends in some of my favorite games, watching some of my favorite streamers, and cheering for my favorite esports teams. For me and many others, gaming isn’t a solo activity - it’s how we stay in touch with our social networks. Marketers who are willing to put in the effort and not just stick to the status quo of advertising in traditional formats have an incredible opportunity to reach a great audience and build unique and exciting ways to connect with them,” he concluded.

This article first appeared in www.MediaVillage.com

 

Everything You Wanted to Know About Esports. An Interview with Zach Oscar

Zach Oscar, Esports and Gaming Consultant, his esports teeth in 2018 writing for MediaPost on the Gaming/Esports industries and, at the same time, working for MRI-Simmons on their esports/gaming data offering. That combination enabled him to explore both the news and the measurement side of that business. 

He has also presented, “Video Gaming and Esports; A Clarification,” to companies such as AMC Networks, Comscore, and Sinclair Broadcasting to help them keep up to date on this fast-moving and confusing landscape. Most recently he has been working with Simulmedia as they enter the in-game advertising space. He has presented an industry overview of advertising in esports and gaming at a recent Secret Society meeting which is a gathering of advanced TV executives. 

Charlene Weisler: How do you define esports?

Zach Oscar: Esports refers specifically to professional, organized, regulated, sponsored multiplayer video game competition. So why is there so much confusion? Games like Fortnite make people think that anyone who plays Fortnite plays esports. Unless you’re playing for a prize, in a regulated professional environment against other professionals, you’re not in esports, you’re a gamer. 

Weisler: We talk about esports and gaming as the same thing, but there are obviously differences. Can you go into the differences and similarities?

Oscar: Both esports and gaming are about video games. Esports exists within the broader gaming ecosystem. However, while all esports are video games, not all video games are esports. For example, some of the world's most popular game lines like Skyrim, Animal Crossing, and God of War are not esports capable, meaning they don't have a competitive angle through which multiplayer professional teams could compete for prizes and the championship titles.

Weisler: How does esports compare with traditional sports? 

Oscar: In some respects they are similar. Esports senior management have deliberately talked about how they parallel to the traditional sports world i.e. a developmental/high school equivalent, a minor league system, a major league system, and then a championship. 

But there are differences. Esports are growing faster in the 18-34 year old category than almost any other sport except the NFL and NBA. The viewing experience between the two are very different. If you're watching a football game, talking with friends or others about it requires you to either have friends in person, on the phone, or message through a third party app not tied directly to the sports broadcast. Places to watch esports like Twitch, YouTube, and Facebook Gaming all have chat capabilities integrated into the platform, and community engagement during these games is massive. People comment on gameplay, send funny memes, put in specific codes during the broadcast to try to enter to win prizes, it's a very unique experience. 

However, the most crucial difference is ownership. In basketball, for example, no one owns the sport. The NBA is the league operation which regulates the game. Very rarely are any changes made. In esports, the publishers and developers who create these games are often the owners of the leagues in which they are played, too. The games change ALL the time. New characters, weapons, abilities, etc. can have a fundamental impact on the gameplay. So not only do they regulate the play, but they also set the terms of the play itself.

Advertisers can work with publishers to find ways to get into the games themselves in an authentic and player-focused way. League of Legends, for example, has recently announced a few partners for its in-game banner advertising which will only be visible to people watching the esports competition online, not to the actual athletes playing the game. Mastercard is one of the first to get on this wave. 

Weisler: How have esports evolved over the past 3 years?

Oscar: People say that esports are still not mainstream but esports' presence has been creeping up for many years. Since 2016, competitions like the ESL Pro Counter Strike championship have been filling up massive arenas like the Barclays, and acquiring major, almost unthinkable partnerships/sponsorships from big name brands over the past year alone. For example, Louis Vuitton, BMW, Gucci, and other unexpected advertisers have entered the esports scene. 

Also, games like Fortnite and Call of Duty Warzone (Call of Duty's Fortnite equivalent) have become so popular as video games, that by extension of their interest in the game itself people are watching competitive esports. So many more people are gamers today and some of those people then get into esports. 

Another trend is the experimental expansion of esports. Activision Blizzard, creators of Overwatch and Call of Duty, have begun attempting to create local team franchises based in the US and abroad to foster a traditional sports like following. Because of this, too, there is more planned esports specific venue building and therefore opportunity for regional sports networks to air competitions. Plus, esports have acted as a substitute for traditional sports in lieu of COVID-19; some professional athletes have held their competitions virtually, for fun, like NASCAR's iRacing virtual competition that took place earlier this year in lieu of normal races. 

Weisler: Has the pandemic caused any change in the esports model?

Oscar: With the pandemic halting in-person competition until recently, there was a lot of hype around the ease with which esports would be able to continue onwards totally online. There's definitely merit to that idea - the Call of Duty League championships, which took place just this past Sunday broke their peak viewership on YouTube for any of their other esports competitions at 331,000 viewers on the platform - the previous peak was around 200k for the league. TEGNA, the local TV station conglomerate in Texas, partnered with local esports teams Houston Outlaws and Dallas FUEL to put on competitions over three weeks and create a docuseries that ran on weekends. Also, sponsorships have continued to pour in to esports since there's scarce opportunity in other postponed sports, with major brands like Nike announcing just this past week a streetwear sneaker deal with the League of Legends 2020 World Championships. 

Additionally, without that sports programming, ESPN and other sports networks have started showing more esports competitions live. However, it's not all roses for the esports world. A common misconception is that esports is perfectly healthy when it is entirely online. As I mentioned earlier, esports wants to be viewed in the same light as traditional sports by marketers (except with an even younger audience), including in-person audience opportunity. Ticket sales, merch sales, visual sponsorships are all big parts of the esports revenue, which accounted for approximately $100 million worldwide in 2019.

Weisler: Tell me about the demos for esports.

Oscar: According to MRI-Simmons' latest report on esports fans, around 47 million Americans are esports fans, which consists mainly of 18-34 year old millennials, who make more than the national average income, which is around 60k. Esports fans skew male, as is to be expected, by a roughly 60-40 split. However, we still need more data and insights into esports fans under 18 years old, since it is burgeoning for younger people. Comscore has been working with Twitch to get more viewership data and put it in context with cross-media viewership data, and YouGov has collected sentiment data on activations within esports, but we’re still waiting to see the bulk of all that. According to Nielsen and Riot Games, the League of Legends North American tournament series is the third most popular league for adults 18-34 behind the NFL and NBA, but the gap is noticeable (around 2.5m for NFL, 470k for NBA, and 123k for League of Legends). If you included people under 18, I bet these numbers would be even closer together. 

Weisler: Where do you see esports 2-3 years from now?

Oscar: According to many projections, esports is set to grow to about $2bn in worldwide revenue, with a CAGR of 23%. I am not sure how that will play out, but viewership will continue to grow as more and more people start to use platforms like Twitch and YouTube for their m
ainstream entertainment. Esports is an integral part of that. Currently, around 500M people worldwide watch esports and that is projected to grow to around 650M in 2023, according to gaming/esports research firm NewZoo. It's hard to know how reliable all these projections are, especially since esports is such a broad bucket of interests, but if history has taught us anything it's that esports continues to draw more viewers over the years.  

This article first appeared in www.Mediapost.com

The Future is Bright for eSports, According to the EAB

eSports competitive global gaming  is currently a multi-billion dollar industry with, as CNN reported, the potential to turn “casual gamers into serious stars who can sometimes rake in seven-figure earnings and massive brand endorsements.” The distribution channels of streaming services and live events have made it the next frontier for marketers who see it as an opportunity to advertise in fresh inventory and reach Millennial males. 

Notably, while not all games are eSports, all eSports are games and their burgeoning popularity is quickly making them a major player in the overall sports market.

The EAB (eSports Advertising Bureau) commissioned Magid to analyze the profile and proclivities of the eSports fan based on fusing and averaging the data of EAB members’ audience studies.

It was recently presented at the Secret Society meeting. Chris Pizzurro, Head of Sales and Marketing, Canoe Ventures who is on the EAB Advisory Board, presented the findings:

• A majority (54%) of all U.S. consumers have heard of eSports which translates into 48 million people.
• The majority of eSports fans are age 18-34 (58%), while 14% are 13-17 and 28% are 35+.
• eSports fans skew male (71%), have a household income of $75k+ (49%), a college degree (60%) and are married (65%).
• Compared to sports fans in general, eSports fans are heavier users of media.

For Pizzurro, one of the challenges with eSports measurement is that there is, “no central measurement. If a brand does a sponsorship deal with a media company and it includes broadcast, digital, social and arena, the measurement will come from each platform. So the media company, agency, or brands needs to put it all together.”

But the opportunities for advertisers, according to Pizzurro, are vast, from sponsoring a league or players to placements on distribution platforms. When asked, “Where do you see eSports in the media ecosystem three years from now?” he is optimistic, “It will be much more mature,” he stated,

“We have seen just in the last year much more business discipline from major media companies entering the space. We will see an increase in media spending from advertisers as the business execution lead time moves from months to weeks.”

This article was first published in Cynopsis.

Mapping Turner Studios' Future with Peter Scott

Turner is one of the leading companies focused on innovation, so it was no surprise that Peter Scott, Vice President of Emerging Media and Innovation, Turner Studios, was a presenter at the recent Innovation Congress held in New York City.  His presentation offered a rare glimpse into how Turner is expanding its content creative footprint. 

Scott began his career out of college in 1999 as a news editor at CNN, where he participated in global news gathering in dangerous hotspots such as Sarajevo during its civil war, "driving these luxurious armored cars through the streets and working with great reporters such as Jim Clancy, Peter Arnett and Christiane Amanpour."  These experiences helped Scott create a framework for developing innovation across all of Turner's brands and business groups.  "Innovation occurs across all businesses," he noted.  "It is important to have a base and I was blessed to have [one]."

Turner Sports
His work with Turner Sports includes the recently acquired eSports where he is figuring out how to build tribes of fans.  Turner also has a contract with Vision Baseball post-season baseball on TBS.  About seven years ago the contract to March Madness expired and, at that time, Turner was able to get that franchise and, "along with all of our channels and our digital teams in Atlanta to build great experiences across 16 platforms," he recalled. Turner also manages all of the digital rights to the NBA tracking league pass usage across platforms.

Turner Studios
Turner Studios works across all groups in the company.  "We are creating content with brands such as show formats and storytelling, using technology across the board, [and] serving a lot of different masters inside Turner Studios to figure out how the future is going," he explained.  Turner Studios ties technology to the fandoms and tribes they have inside all of the Turner brands.  According to Scott, Turner Studios in Atlanta is about 300,000 square feet with six sound stages.

Finding Global Innovation
"We scour the world for the best shops and one of the places that kept coming up was Israel … like all the time," Scott marveled.  "We had this opportunity to set up an office in Tel Aviv -- Turner, Coca Cola and Mercedes all have offices there working with all types of technology such as ecommerce, blockchain, ad tech and video -- and bring this technology back to the States."  Israel's efforts include bringing together 150 start-ups offering great new technological ideas for not only news and entertainment verticals but also data analytics and sales.

"We are leaning into this space," Scott said, because of the high caliber of people available there.
Being in the right place at the right time helps spur innovation and creativity.  But be prepared to fight for your ideas.  According to Scott, in order to push the envelope on innovation, you must expect to navigate these three stages: ridicule (where you can get pushback for a great new idea), opposition (the pushback itself) and the "magic" of adoption.

"You have to be passionate and persistent," he concluded.

This article first appeared in www.MediaVillage.com

Looking at TV at the Speed of Light at the TV of Tomorrow Conference

TVOT, one of the most forward thinking conferences in our industry, focused on the concept of time for this year’s NYC event. In past years, TVOT has explored how technologies such as VR would change how we use TV, how the rollout of apps and TVE would impact how we access content and how big and small data would impact how we measure everything. 

Time is a precious commodity, made even more precious by the continued fragmentation of consumer attention, platforms, content forms and data sources. The scarcity of time has impacted the strategies of traditional media companies and advertisers. 

What ad formats work best by platform? How can you develop successful content by platform? To content creators like Lung Huang, Head of Strategic Partnerships at 84.51”, "This is the golden age of TV." but there is still a lot of uncertainty. "Marketers must make decision what works best. But we are not there yet," he added.

The TV of tomorrow, according to Tracy Swedlow, Editor-in-Chief, itvt, is “coming up with new content formats, inventing it on the fly and to some extent launching it on the same day. They are competing with traditional media offerings as well as the social media world and individuals who are creating their own channels. There is so much competition now to come up with incredibly new content that the TV of tomorrow is happening today and every day in every moment.” 

 

Here are some takeaways from the conference.

The Harnessing and Consolidation of Rapid Change

Perhaps because of the swiftness of change and transformation, many media companies are working towards a consolidation of efforts, a look towards standardization of measurements and a nod to traditional media forms as foundational keystones. Panels on eSports, for example, acknowledged how they owe a lot to traditional sports coverage and sales. As Nathan Lindberg, Director of Global eSports at Twitch, stated, "eSports is the newest thing you've always heard of."

Starting with what we know about traditional sports, Seth Ladetsky, SVP Sales at Turner Sports, said he, “started realizing that young males were consuming a lot of eSports. So, Turner invested in it with ELEAGUE, a professional eSports league the company debuted in May 2016 in partnership with WME/IMG.” As eSports “scaled and had multiple touchpoints,” according to Stuart Lipson, Executive Director, eSports Ad Bureau, “We established the eSports Ad Bureau rules to execute against this complex environment.”

Designing Across Platforms

Maintaining coherent branding across platforms is much more complex than one might think. Take CNN, for example, which traditionally attracts an older audience. Dewey Reid, VP/Executive Creative Director CNN, is charged with creating “a CNN news habit across all age groups” and grapples with “design challenges to hold the brand together across platforms.” This is because “every platform has a different content management system.” 

Samantha Barry, Head of Social Media at CNN, explained how it might be possible to young-down news using an example from the recent election. “Election night is our Super Bowl at CNN,” she noted, “and we wanted to have defined success across each platform. Our work with Kick targeted 13-17 year olds. We launched stickers – they love stickers – and gifts and emoticons. We learned that we have to speak their language.” The strategy went further. “We wanted to have a design brand across all platforms – designs that could be used across TV, desktops and social platforms. We did instagram portraits for all candidates and used them across platforms,” she added.

Be Flexible

Understanding the differences in platform usage and behavior is key to maximizing marketing efforts. Barry noted that, “Good news is shared more on Facebook and on social platforms. Triumphing over adversity. Climate change does well on Snapchat.” So CNN tries to tailor the news by degree of user interest.

Agencies are also become more adaptable. Jonathan Steuer, CRO, Omnicom Media Group, sees a holistic, synergistic approach as the road to success. “We are in later stages of consolidating our media investment teams so we aren't siloed,” he noted. “We want to find the balanced diet for our clients and think of it as a holistic process.”

The secret to navigating these quickly changing times is to be inquisitive, open and not afraid to take a risk. Andrew Feigenson, Managing Director Digital, Nielsen, summed it up by saying, ”This is a changing world. No one has figured it out. This is a time of experimentation.”

This article first appeared in www.MediaBizBloggers.com