If you’re wondering how massive esports has become, just follow the money. The livestreaming platform Twitch paid $90 million for the rights to the Overwatch League. Activision Blizzard, creator of Overwatch, beat its revenue forecast for Q1 2019, in part because of its esports initiatives. If you combine fan spend, media rights, and sponsorships, the esports market is now worth an estimated $922 million.
Marketers have noticed the growing audience for esports. Brands such as Coca-Cola, Kit Kat, and Cox Communications have done some sort of an esports sponsorship recently. The value of these deals are not public knowledge, but it’s a good bet that they are hefty. Marketers, rightfully so, want to be part of a growing phenomenon—one that has a captive audience and a passionate fanbase.
But while esports is hot, it’s important for companies to understand the value of these marketing investments. As the esports market matures and airing on major networks such as ABC, NBC, ESPN, and TBS, there will be more opportunities to reach both casual and fanatic viewers. Understanding the impact of these activations now can help you capitalize on the growth of esports.
To that end, our team at Reach3 Insights recently conducted a study to understand the impact of sponsorships among esports viewers. We used software from our sister company, Rival Technologies, to send conversational chat surveys to viewers of Overwatch League Season 2. In the end, we received 115 responses from a wide range of demographics and answered a few key questions about esports sponsorships
Do sponsorships increase awareness and lead to action?
Our chat surveys, which we sent to viewers the day after Season 2 Stage 1 playoffs ended, explored both the involvement of viewers with the Overwatch League as well as their recall and interactions with the league’s sponsors.
Regarding the second item, we were surprised that a great majority (85%) of viewers said that they were able to recall at least one sponsor from the event. Perhaps more importantly, over half (63%) said their impressions of the sponsor’s brand increased due to sponsoring an event the viewers are a fan of.
Sponsorships aren’t good just for awareness. Viewers told us that they took additional action after seeing a brand. Over three-fourths of viewers even took some sort of action based on the brand’s sponsorship (78%), either looking into the brand more (40%) or even making a purchase (38%) due to the brand placement.
These stats suggest that esports sponsorships hold a lot of promise and that it makes sense to be an early player in this space. Of course, esports is still relatively new and not as crowded yet, so it’s a good bet that sponsors may not see this high ROI in the future. It’s important for companies to keep on engaging with esports viewers to understand the real value of sponsorships and how to create an authentic relationship.
Are all sponsorship types created equal?
While the stats above clearly show that activations in esports make a lot of sense, our study shows that some sponsorship types are more effective than others.
Sixty-one percent of viewers favor sponsorship for individual teams, and 51% said they prefer sponsorship of specific events or matches. Surprisingly, only 43% of viewers prefer what is presumably the most expensive type of activation: sponsorship of the entire league. While it certainly merits further research, one hypothesis is that sponsoring the entire league may worry players that the sponsor may have more influence over the game than players desire.
Do Overwatch League viewers play?
As I mentioned above, we also asked viewers about their involvement with the game. While we weren’t surprised that nearly all play Overwatch themselves (82%), we found that that most of them play only for fun (66%) with no intentions of competing.
Interestingly, 63% said they have not bought any official physical Overwatch League merch yet. This shows that merchandising could be a lucrative area that Activision Blizzard hasn’t fully taken advantage of yet. There’s real potential here to create compelling swag beyond jerseys that lets passionate fans show their love for the game or their favorite esports team. Interestingly, there is also a digital avenue for league merch where fans can purchase character “skins” for their game that allow their characters to wear their favorite OWL team colors. Be it physical or digital merch, further research is required to really understand viewer attitudes and expectations here, but I do think there’s a gap that’s not being addressed yet.
The growth of esports is already attracting new competition, both on the content-provider side and the sponsor side. As this market matures and become more crowded, it’s important for marketers to keep their pulse on the most effective way of maximizing their sponsorship dollars. Our study shows that there’s a big opportunity here, but this is a high-growth, fast-moving market. It will be crucial for marketers to really understand the expanding esports audience in the years ahead.
Sean Campbell is VP of tech and gaming at Reach3 Insights, a consultancy that leverages agile, on-demand and conversational technologies and techniques for market research.