E-sports: time to get future-fit
Brands and advertisers who are reluctant to embrace the video-gaming industry are missing a trick. They need to understand the huge potential of the burgeoning e-sports audience, where influencers are more effective than traditional ‘push’ forms of advertising
Local brands are ignoring, to their detriment, an almost R4bn media platform — one that has a young audience with huge disposable income. Globally, the video-gaming or e-sports industry is seven times the size of the music business and three times the size of Hollywood. In SA, the gaming industry is expected to bring in revenue to the tune of R3.6bn by the end of 2019.
Michael King, head of Reprise Digital (part of the international IPG Mediabrands stable) tells the FM that despite the huge audience of gamers in SA, only a tiny portion of brands are getting involved. "In the past couple of years the gaming industry has grown to half a billion people globally, with the industry showing 30%-50% growth year on year for the past three years," he says.
According to King, advertisers are reluctant to embrace gaming because the demographic isn’t perceived to fall into most brands’ core audience. But recent studies, he says, show the average gamer’s age is 30-plus — a market segment that has money to spend.
So how do you sell the notion of gaming to advertisers? King says brands need to adopt a future-fit strategy and understand that the gaming audience might not be your target market today but will be in future.
So how do brands dip a toe in the proverbial water? Softly-softly, says King. "We know this market does not respond to traditional push methods of advertising. Rather, they respond to friend reviews and suggestions. This is why influencer marketing is so successful in this space."
One local brand that is seeing potential is Vodacom, which has opened an e-sports hub at Vodacom World, its flagship digital mall. Vodacom says the hub will host a number of gaming events and experiences. It is also designed to provide gamers with a chance to experience the service provider’s network speeds and capabilities.
Globally, e-sports revenue is forecast to top $1.1bn this year, according to gaming analytics firm Newzoo. That’s 27% up since last year, with expanding revenues across advertising, sponsorship and media rights. Newzoo says brand support will have nearly tripled since 2015 and the total engaged audience of enthusiasts and viewership is expected to grow 15% to 454-million this year, with global revenue expected to reach $1.8bn by 2022.
Half a billion people worldwide have tuned in to watch live e-sports tournaments, and traditional broadcasters are also slowly turning to the nascent industry to expand and invest.
Nielsen e-sports MD Nicole Pike says: "E-sports fans around the world include some of the hardest-to-reach consumers for brands through traditional media. They’re young digital natives who are also cutting cords and blocking ads at rapid rates."
And it seems there is potential for more traditional broadcasters to become involved in the sector, which would also bring in potential advertising revenue.
Nielsen notes: "Today e-sports is vying to be the second-most popular sport after football, with the evolution of the gaming and production values leading the future of the industry." But, the research company adds, brands have to do their homework.
"Understanding the complexities and intricacies of the e-sports marketplace is another major challenge — there are a multitude of teams, tournaments, titles, players and commercial and broadcast models in play, as the sector develops and matures."