‘The model is shifting’: In esports, brand dollars increasingly follow the personalities

Turns out, it’s the culture around esports, not the competitions themselves, that really interest advertisers.

Marketers at Digiday’s virtual Gaming Advertising Forum earlier this week said as much. And the way they advertise to gamers is changing as a result. They’re increasingly choosing to build campaigns around the biggest personalities in esports, over the teams and competitions.

“We recognized early on that a lot of creators who were [high profile] gamers already loved Chipotle, so it helped us identify that this was a huge segment we should go after,” said the brand’s vp of marketing Stephanie Perdue at the event. “Then it was about finding those authentic partnerships with the right teams with the right streamers who are already talking about us on their own.”

Like traditional sports and entertainment, gaming is becoming more personality-driven by the day. Increasingly, esports fans are tuning in to watch individual people as well as the teams. So the sponsorship model is shifting toward a personality-driven arrangement between advertisers and team organizations. This shift toward “star power” is evidenced in the types of assets being created for sponsorship deals, from content over logo slaps to product endorsement over product placement.

“We still work with esports teams, but they’re a much smaller part of our overall strategy than they have been in the past,” said PepsiCo’s head of gaming and esports Paul Mascali during a session. “We’re more focused on the cultural side, insofar as working with the tastemakers and the influencers that are deriving gaming culture forward. That’s much more important as we think about how to authentically reach gamers.”

When PepsiCo gave video game streamer and esports personality Dr Disrespect his own limited edition of its Mountain Dew Game Fuel promotional flavors, for example, it sold out in 72 hours. It worked so well, said Mascali, because the tie-up didn’t come across as forced to Dr Disrespect’s fans. They know why he promoted the brand but appreciated the fact that he seemed to actually like it.

“You had a situation where there was an authentic brand for gamers being drunk by someone who’s a celebrity to many of them,” said Mascali. “He’d be drinking and talking about the drink while streaming to his fans who know how he talks about the brands he does and doesn’t like. They trust him. So we had a meaningful connection this way, as opposed to getting him to share a random social post or something along those lines.”

Unsurprisingly, these tastemakers are increasingly at the forefront of advertising around esports — and, more broadly, gaming. After all, many popular esports personalities have large followings to whom they often stream for upwards of eight hours a day. That sort of media exposure is hard to ignore for marketers. Recent deals from the likes of Chipotle, Razer and Adidas bare this out.

“Typically, these deals were pushed and brokered by communication agencies and activation units,” said Umair Saeed, chief operating officer at Blitz Advertising, a Publicis Groupe affiliated sports marketing agency. “Now it’s happening at a more strategic level directly with the CMOs. This has also resulted in the creators being forced to up their packaging game.”

Still, none of this necessarily constitutes a radical sea change in the esports industry. Rather, it is a gradual change that has arguably been underway since the moment a non-endemic brand signed its first esports partnership. It was then that esports really started to become a more expansive entertainment product. Players became celebrities; teams turned into organizations; content deals replaced sponsorships. All these shifts have been impacted by the evolution of competitive gaming. They’re still all esports, of course — just different sides to it. 

“When most people say esports, they mean everything from PewDiePie to Belle Delphine — they just think esports means the internet,” said Ryan Morrison, CEO of esports talent agency Evolved. “And it’s not always the most important distinction, because all they care about is, well, where are the eyeballs? Where’s the most bang for our buck, and how can you show us how to get there? So our advice is, 99 times out of 100, going to be to work with the talent themselves.”

His point being “esports” now means different things to different people. Among experienced industry veterans, the term specifically refers to high-level professional play in a structured league or tournament, usually one of the major esports leagues operated by game developers such as Riot Games and Activision Blizzard. But to the average layperson — including most brand marketers — esports simply refers to any video games played in front of an audience, a definition that could be applied to any popular streamer or influencer.

Esports organizations are, understandably, trying to lean into this idea. 

Fandom for esports teams is often at the mercy of fandom for the games being played. When games are new or hot, viewership increases across the board, and obviously, the reverse is true as well. 

“So it’s incumbent upon esports organizations to find ways outside of regular gameplay to connect with their audiences and engage their fan bases, and that’s often where sponsored content comes in,” said Steve Brauntuch, chief marketing officer at esports and entertainment company Misfits Gaming. “Whether it’s behind-the-scenes access or player interviews or lifestyle content, teams need to be creative with how to integrate sponsors in a way that drives engagement with their fans outside of gameplay and helps build brand equity as well.”

Granted, competitive success still forms a backbone of popularity and legitimacy for many esports organizations. Even Matthew “Nadeshot” Haag, whose organization 100 Thieves boasts a deep influencer roster, stressed the importance of high-level competition for his company in a tweet last year, with 100 Thieves investing millions of dollars to build its championship-winning League of Legends squad.

Still, those investments only take teams so far. That much is clear from the number of esports CEOs scrapping their way to profitability as investor money dries up. So much so that there are some early signs that esports organizations could deprioritize competitive success. The culture around esports, goes the thinking, would be enough to supplant the competition itself as a driver of consumption. 

“It will have to fall by the wayside for those organizations that want to remain in business and producing revenues and profits, just because there’s so much more inventory and opportunity around from a content-creation standpoint,” said Justin Miclat, whose talent management firm The Kinetic Group represents popular streamers such as NICKMERCS and SypherPK. “But you shouldn’t be investing $10 million to build your Counter-Strike team, because that’s just one moment, one day, one event.”

Both Miclat and Morrison, whose agency also advises brands entering in the gaming space, said that their individual influencer clients have seen a rise in brand interest, while the frequency of team-level sponsorships has decreased. In an effort to circumvent this, esports organizations are becoming influencers in their own right, with FaZe Clan going as far as to sign a separate organization-wide representation deal with UTA. “What 100 Thieves is today is certainly not what TSM was 10 years ago,” Morrison said.

As esports organizations move toward the holding company model in a bid to secure new revenue streams, their focus on competition will inherently be diluted. The more budget a company dedicates to the manufacturing of peripherals and apparel, the less resources are available to hire and hone a competitive squad. But the competitive side is unlikely to disappear entirely; at the end of the day, “esports” still stands for electronic sports. If esports organizations truly wish to divorce themselves from the stress of competition in the future, they’ll need to pick a new name for their entire industry.

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