Could eSports sponsorship be the new face of sports sponsorship?
eSports is becoming a huge deal in the UK, with reports over the weekend that the IOC is considering an application to include it in the 2020 Tokyo games. The industry is currently worth $748m, with 77% of the value generated from sponsorships and ad revenue. In 2015 alone, 188 million people watched eSports, with that number expected to grow this year, with brands including Sky broadcasting tournaments. eSport events like Insomnia are becoming bigger and better, and the ESL (European Sport’s League) is growing on a daily basis.
As of the start of this year, eSports sponsorship was primarily exclusive to technology brands and people who operate in relevant markets, but this is beginning to change. In the last couple of weeks alone, we have seen Coca Cola recruiting for team players on their Twitter channel and Budweiser announcing their eSports all-stars group will be unveiled at DreamHack Austin, which kicks off this week.
Usually brands plan their sponsorship strategy years in advance, but with many brands’ existing sponsorship deals coming to a close and moving on to the next cycle, it looks like eSports is definitely an area for consideration.
In the short term, starting brand sponsorships from an early stage will allow for greater integration with other marketing initiatives and will mean that brands can stake an early claim in a rapidly growing arena. Red Bull are a key example of this, as they owned extreme sports from a very early stage, using athletes to shape the way their brand was perceived.
However, there is one key issue when it comes to eSports, namely a lack of consistent regulation. There isn’t currently a governing body controlling eSports teams and sponsorship, but brands can potentially use this to their advantage, and with big name brands including Budweiser and Coca Cola moving into the market, it will likely encourage other consumer brands to do the same.
Whilst the lack of governing does present an opportunity and eSports doesn’t need to be run like traditional sports, there are certain regulations that can be put in place to deal with issues like doping and match fixing. Sanctions could also be put in place so that brands can see how their money is being used and to ensure this kind of sponsorship won’t damage their brand equity. Before they seriously invest, sponsors are going to need some reassurance of reliability. Once a regulatory process is in place however, it is likely there will be greater faith in what eSports sponsorships can deliver, but it may be too late for new sponsorships to have as great an impact and therefore late adopters may not get the desired return of investment.
Brands are finding that it is becoming increasingly important to find alternative channels to reach different audiences, and eSports is one way for them to do this. If relevant brands do nothing, they are in danger of alienating ourselves from a trend that could be huge for sponsorship and the future of gaming.