The esports industry is experiencing explosive growth, with revenues in 2019 expected to surpass the one-billion-dollar mark. Now, more than ever, brands are seeking to enter the space and get a piece of the action. But for non-endemic brands, learning the ins and outs of a new industry—the major players, the tournaments, the franchise model and, most importantly, how not to alienate the fan bases they hope to evangelize—can present a steep learning curve.
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For insights on the “where to begin” in esports, we caught up with esports industry veteran Mike Sepso, co-founder of Major League Gaming and a former Activision Blizzard executive, who created global esports advisory firm Electronic Sports Group (ESG) to deliver strategic business advice to the advertising, finance, sports, and media industries. In part one of our interview, Sepso talks sports, authenticity and what brands shouldn’t do.
EVENT MARKETER: What led you to create ESG?
MIKE SEPSO: One of the issues with the esports space is that it’s been around for quite a while, but it’s changed remarkably in the past two years. It’s grown very, very quickly. There’s a number of more mainstream companies and industries that are now interested in moving into the esports space without a lot of understanding about what to do. So, launching Electronic Sports Group was in large part due to me responding to lots of different requests for these advisory services from a broad spectrum of companies and industries—from private equity funds to major family offices in the investment space, to traditional media companies like television networks and production companies. They need to understand how to apply their resources and capital.
EM: How are esports events different from traditional sports events, and how are they similar?
MS: The number one difference is the actual live audience experience. Rather than watching individual people run around on a playing field, you’re seeing those individual people, but they’re seated on the stage and they’re talking to each other and communicating and competing. But what the audience is really watching is a set of giant screens where they can see what the players are seeing or see what’s going on in the broadcast. So, it’s a much more media-rich, live event environment, significantly more than traditional sports. While big football stadiums around the country have put in giant JumboTrons and things like that, it still pales in comparison to the type of 360-degree multimedia experiences that esports events are.
The other major difference is the esports fan base. Because it’s not a mainstream thing yet, the fan base is super excited all the time and more open than most traditional marketers think to experiencing brands and having additional experiences as part of that live event experience. They’re open to ongoing activations and that festival atmosphere that’s different than your standard Sunday afternoon NFL game or even a college football game.
Where it’s similar is in the fandom. I live in New York, I grew up here, I’m a huge Knicks fan and love going to see the Knicks play. When you’re walking into Madison Square Garden, there are thousands of people wearing Knicks jerseys and excited about the game and cheering. All of that you also see in esports. You see the fans walking in with their favorite player’s jersey. You see them jumping up and down and screaming when a great play is made. All of those things that are the core functionality of sports competition and events and fandom are really the same in esports.
EM: What should non-endemic brands consider when looking to get into esports through events and sponsorships?
MS: Have a trusted third-party adviser to run ideas through. Will this be received by the esports audience as an authentic voice? Do we feel like we’re part of the community as a brand and an activation, or does it feel out of place? How should we approach follow-up on this activation? How should we promote it? Once those questions are answered, brands can feel a great degree of more confidence going into it, can make the right kind of investments, and can measure the outcome to make sure that they’re getting a great return on investment.
The esports audience is still very hungry for more support from brands in the general consumer sphere to come in and prove that they understand and support this activity, or this league, or game or team that they love. It mirrors the very early days of traditional sports, being able to go in and work with an NFL or NBA team within the first 10 years of those leagues’ existence, being able to build that brand association and activate in an authentic way to gain the trust and authentic acceptance of that fan base, and then grow with it—that’s the opportunity in esports right now. Almost universally, you see an over-indexed return on investment, especially for event activations in this space.
EM: Here’s a question about authenticity: What should brands not do?
MS: There are a few things not to do. Don’t assume that all esports is the same. For instance, there is a huge difference between the Overwatch League and a Fortnite tournament—as different as baseball and football. Seek out and get expert advice is number two, because of number one. Understanding the market is critically important.
Number three: Now is the time to make a move into the space. One of the big things you’re going to see in 2019 and going into 2020 is a significant increase in new consumer brands jumping into the esports space. The sooner you do it, the sooner you start learning about the space in a way that you can’t from the sidelines. Now is the time to get in, whether that’s through experimental budgets and taking small steps into the space, or going big. Either way, it’s important to just get started at this point because you will start to miss out on the audience.
Universally, the esports audience recognizes and overly appreciates those brands and sponsors and supporters that it views as having been there before it was big. That’s a critical thing. Get some exposure, start to learn about the space, but also stake a claim. Plant your flag in the space, so that the fan base realizes that you’re there, that you’re trying, and that you’re making an effort to engage with them in a meaningful way.