The world of e-sports is massive and still growing, and advertisers are wondering how they can profit from this phenomenon.
Kevin Lin, COO of Twitch, and Peter More, chief competition officer of EA, sat down with Business Insider's Steve Kovach at IGNITION 2016 to discuss the role advertisers play in e-sports.
In addition to revenue sources like subscriptions, donations, sponsorships, event-based ticketing, merchandise, food and beverage, and in-game items, Lin said advertising is the main way e-sports are monetized.
So why do advertisers want to get involved? For one thing, the viewership numbers are huge. “Some of them hit tens of millions,” Lin said. “In concurrents, you’ll see millions.” Additionally, users spend two hours a day, on average, watching content. During competitions, the number grows to 8 to 10 hours.
Another reason e-sports are intriguing to advertisers is the demographic they reach. According to Lin, 90% of the Twitch audience subscribes to Netflix or Hulu rather than traditional cable. “Broadcasters are wondering how to reach this demographic,” Moore said, so they want to be a part of e-sports.
With millions of young people not seeing traditional advertisements, companies are recognizing the need to engage with younger audiences in other ways. But there is a challenge in this form of advertising. Because this audience is not used to traditional advertising, they are quick to recognize when something is not authentic.
Moore mentioned that brands have to be careful when entering this space, and must be able to show they are truly interested in growing the field of e-sports rather than just selling a product.
“A lot of brands that are very interested in the space are building entire divisions that are hired from the community,” Lin said. “They can help craft a message and marketing plan that really resonates.”
When done correctly, massive success can be had. For example, Nissan launched a holiday campaign on Twitch. The Twitter impressions and chat messages involving the word “Nissan” were in the millions. Nissan did not expect this result, but because the campaign was authentic it succeeded.
Companies have huge potential to reach a new audience by dipping into e-sports, and we will likely be seeing even more of this in the future.
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To hear more about the world of e-sports, check out the full interview below (the segment starts at 2:12).