Riot Games, the developer of League of Legends, and MasterCard have created a new set of branding opportunities. During the broadcasts of League of Legends matches, sponsors will now receive in-game brand banners.1 Nielsen, the data analytics company, "valued the in-game banner displays as some of the most valuable media assets within the League of Legends esports portfolio."2 These in-game banners are analogous to the banners found in sports arenas and provide yet another way for brands to acquire the attention of consumers. This comes at an especially opportune time, as the majority of live sports are either postponed or cancelled. Noticing this gap, ESPN became the official broadcast home for the League of Legends North American Spring Playoffs.3
Brands will need to be more creative in allocating their marketing budgets, especially as the attention spans of consumers continue to decrease. These brands must position advertising at consistent touch points in a consumer's daily life. To thrive, brands will need to take advantage of growth areas like esports, an industry which plays a role in the lives of half a billion people globally.
Beyond Traditional Marketing: Esports Provides Infinitely More Creative Opportunities than the Real World
While some traditional media and marketing budgets were being slashed due to COVID-19, sponsorships in esports continued to flourish. In the month of May, there were 10 noteworthy partnerships/sponsorships between major non-endemic brands and esports organizations4, demonstrating esports' resilience during the market downturn. It is important to note that these are not one-time sponsorships and partnerships. After launching test sponsorships, brands have frequently chosen to expand their esports marketing efforts. For instance, Nestle's Kit-Kat brand sponsored the League of Legends European Championship (LEC), and they "were overwhelmed by the positive feedback from fans, teams and partners alike" and described this sponsorship as a "strong fit".5 Since then, the Kit-Kat brand has expanded their esports presence by deciding to sponsor DOTA 2's online global tournament, Blast Bounty Hunt.6
It is clear: these non-endemic brands are beginning to realize that there are a plethora of opportunities for innovative advertising initiatives. For example, in January, the luxury brand Louis Vuitton announced a collaboration with Riot Games consisting of skins for in-game characters that could be purchased with real money.7 Louis Vuitton also spent 900 hours creating the trophy case for the League of Legends World Championship.8 The esports industry can also leverage advertising initiatives utilized primarily in traditional sports. For instance, the Chicago Huntsmen team, owned by NRG Esports, recently announced a partnership with the Popeyes fast food chain.9 This partnership includes the Popeyes' logo being prominently featured on the chest of the team jersey.10
Dismissal Can Be Catastrophic: Brands that Fail to take Advantage of this New Frontier of Marketing will Lose the Future Consumer
Many brands, and especially non-endemic brands, are hesitant to invest in the esports space, largely due to a lack of familiarity with the industry. Investing in esports can be overwhelming due to the staggering number of games, teams, players, streamers, media outlets, and other industry stakeholders. However, this is a sector that shouldn't be ignored by marketers. In 2019 alone, the esports industry had a global audience base of 453 million people, which was 73 million greater than in 2018.11 Additionally, the industry is projected to exceed the $1.5 billion revenue mark in 202312 , placing the industry on track to continue towards high-earning traditional sports leagues like the NHL, which brought in $5.09 billion in revenue in the 2018/2019 season. 13
Brands must take advantage of this growing opportunity to connect with the esports global fan base. Not surprisingly, 73% of esports viewers are between the ages of 18-34.14 The Interactive Advertising Bureau (IAB) found that 43% of US esports enthusiasts have an annual household income of $75,000 USD and approximately 31% have an annual household income of $90,000 USD or more.15 Esports fans tend to be higher-than-average earners which typically comes with more discretionary spending power. Both endemic and non-endemic brands stand to lose out on this potential revenue source if they fail to generate authentic interactions with customers.
Importantly, these esports fans are engaged; 49% of esports fans with household incomes between $50,000 and $99,000 USD spend most of their free time around esports.16 This increases to 67% of esports fans with household incomes of $100,000 USD or more.17 Consequently, participating in sponsorships can provide brands with an opportunity to actively engage with consumers in a meaningful way. By creating partnerships with esports organizations, leagues, and athletes, brands will have more touch points with consumers, raising their share of mind and hopefully winning their share of hearts.
Footnotes
1 https://esportsinsider.com/2020/05/league-of-legends-brand-banners/
2 Ibid
4 https://esportsinsider.com/2020/06/partnerships-and-sponsorships-may-2020/
5 https://www.sportbusiness.com/news/levis-and-kitkat-make-esports-sponsorship-moves/
6 Ibid.
7 https://www.thedrum.com/opinion/2020/06/10/what-the-rise-esports-means-brands
8 Ibid.
9 https://esportsinsider.com/2020/06/partnerships-and-sponsorships-may-2020/
10 Ibid.
11 https://newzoo.com/insights/trend-reports/newzoo-global-esports-market-report-2019-light-version/
12 Ibid.
14 https://onlinebusiness.syr.edu/blog/esports-to-compete-with-traditional-sports/
17 Ibid.
Originally published by McCarthy Tetrault, July 2020
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