The future of esports marketing
Posted by Whiteboard Animators at novembre 10th, 2017
As the footprint of esports continues to expand, people from outside the esports industry are bringing their knowledge and expertise to help grow the sport.
I sat down with three experts who have moved into the esports industry recently to get their take on the challenges esports face, what are some of the biggest upsides to the growing industry and where esports are heading. Ken Ungar, Mark Coughlin, and Jason Moore all have extensive experience outside of esports and have brought a wealth of knowledge to the industry.
Ungar is the founder and president of sports marketing agency CHARGE, which recently launched CHARGE esports. He’s the author of “Ahead of the Game: What Every Athlete Needs to Know About Sports Business” and has consulted with marquee brands in sports and entertainment.
Coughlin is the head of marketing and revenue for Team Envy and is helping organize their entry into the Overwatch League. He’s a former executive vice president at Octagon and helped negotiate and manage Sprint NEXTEL’s sponsorship with NASCAR.
Moore is a player agent and CEO at the Agency for Professional Esports (APE). APE currently represents over 30 of the top gamers and cosplayers. He is the former president of Paris Hilton Entertainment and spent a decade developing and managing Paris Hilton’s brand into a Fortune 100 business.
Why have you decided to enter the esports industry, and was there a specific moment or event that triggered that decision?
Ken Ungar: I feel the esports industry has hit an important inflection point. The passion and rooting interest of esports fans has reached the level that this can become a very viable, self-sustaining, profitable industry moving forward for leagues, teams, players and the companies that serve them.
A couple years ago, I attended the MLG major event of CS:GO in Columbus, Ohio, and sat through three days of competition in which thousands of fans showed up each day and stayed a minimum of eight hours to watch the event. I saw incredible fan passion and rooting interest that rivaled any sport that I’ve ever attended over the past 40 years, yet I saw very little commercial activity, sponsors, licensed merchandise sales, hospitality and realized there was a tremendous opportunity to take this sport to the next level.
Mark Coughlin: I think the turning point for me was when I met the founder of Team Envy, Mike Rufail, and he started giving me some data and research reports. I started looking at it and thought if these are real this is something special. Then, I went to the Eleague final for CS:GO last year, and I was kind of blown away not by just the crowds themselves but how the crowds responded to every move the players were making. They knew what was important, what wasn’t important, while there was a lot of shooting going on, they knew exactly what was going on. Everything from the players to the moves to the active appreciation for how good these guys are compared to themselves.
Jason Moore: I was a long-time talent representative in the entertainment industry and an avid sports and gaming enthusiast, a colleague and I assisted in the acquisition of an NA LCS team and during that process I saw first-hand the lack of individual representation for the pros, no managers, no agents, no publicists, even if it is new to this industry it is far from new in the others. I was in the LCS studio and watched the players gather after their matches to do fan meet and greets, it amazed me that it was just a free for all, no team branding step repeats, and or reps to organize player interviews, manage and handle them like Stephen Curry after a basketball game in the press room. Mr. Curry would not be in that room alone, that is for sure.
What are some of the biggest challenges esports face?
Ungar: It’s still very wild west. The lines between different business models are very blurry, so it’s unclear where opportunities for the leagues and teams begin and end and what the opportunities are for players and their relative rights. All of this needs to become defined in the coming years.
Coughlin: From a business standpoint and a commercialization standpoint, the biggest challenge that I know two games are trying to fix is one of geography and calendar. The irregularity of a lot of these games in terms of their calendar, the continent they play on, the lack of regular league play happening where they aren’t just crisscrossing all over the world basically fighting for purses and instead having a season long competition that culminates in either a regional championship that maybe goes to the worlds. ESL and others have been doing it but there are so many other events that come into play that it’s very hard from a marketers’ standpoint to understand. Many times, the teams don’t know even weeks in advance where they are going to be playing.
Moore: The same challenges that all major sports, action sports, entertainment and music have, the balance of control and protection between the pros, whom are the talent, and their employer and sponsor, as well as, broadcasting rights, player unionization, and individual player sponsorships outside of team deals are just a few challenges right now, but those were the same issues that each traditional sport has to deal with and still do, look at NASCAR, massive in-person events but struggles to find a broadcasting viewership, or soccer, largest traditional sport globally but in North America the professional player makes an salary far less than most other pro athletes. Sports in general have challenges that are tackled or ongoing, and that will be the same for esports.
What are some of the biggest upsides of esports?
Ungar: The demographic trends are extremely favorable for esports. Video game playership privately increases year over year. Now that esports has become a cultural part of that lifestyle, you’ll see more and more participation on the esports side as traditional video game playing continues to increase. So as new entrants — kids in their tweens and teens — start to become part of the video game lifestyle, those who are part of it now are getting older and are likely going to continue as they progress into their 30s and 40s.
Coughlin: The audience, right. It’s the audience that I’ve seen repeatedly defined as the unattainable — often referred to as cord-cutters and cord-nevers. You’ve got large amounts of people who are also fans are using ad blockers, they don’t buy television by satellite or cable, they are mostly doing over the top or watching online. These people are very hard to reach by traditional methods. I think there’s a tremendous upside for brands. There’s not a lot of non-endemics in the space, so I think there’s an opportunity to affect this fan base and for brands to be known as esports brands. In most sports, when a brand shows they are also a fan and they act like a fan they usually get embraced and rewarded by those fans. So I think it’s a great opportunity for non-endemics.
Moore: An entirely new sports industry that introduces the same positive fundamentals for kids around the world that other youth sports leagues, collegiate scholarships and professional aspirations to allow players to simply enjoy a fun past-time or to go to college on a scholarship or even on a pro level and earn a living doing what you love to do. The last time a new “sport” was introduced to popular culture and ended up creating an industry, would probably have to be basketball, and now look at where basketball is as an industry, market and lifestyle. I do not foresee another industry and market opening up like this to ever to happen again.
Who are the three most important people/brands in esports today?
Ungar: I would answer that in terms of three important sectors. There’s the publishers and leagues, which are right now fairly synonymous, there’s the teams, and there are the players. Those three groups will continue to jockey between them as to the relative economic power that they share. That’s what makes them the three most important groups. They are the center of the esports ecosystem.
Coughlin: The most important are probably Riot, and Activision-Blizzard right now because they are launching these leagues. I think that everybody is looking toward them and their success and hopefully not their failure. Looking toward the launch of these leagues and seeing if it can be replicated by other games and other places.
Moore: I feel there are too many to just select three, but names that come to mind are three-time League of Legends World Champion, Faker, Twitch, and Jack Etienne, co-founder of esports powerhouse Cloud9.
What games or game types do you think might have the most potential to turn into major esports?
Ungar: I think the most interesting phenomenon in that perspective is the extension of traditional sports into esports. The NFL’s relationship with the Madden game, NBA2K and the NBA’s role in that esport and Formula One with their esports game. So, you have a very powerful extension of the terrestrial sport experience and the extension of that into video game play and esports. It can be extremely powerful as they leverage the connection between all three – the sport, playing the game and watching others play the game. That creates a powerful 24/7/365 football experience, for example, which is why the major sports are so interested in their tie to esports.
Coughlin: You still get some pushback from some consumer brands that still aren’t really embracing the military blood and guts, red blood kind of games. I think you’re probably going to see more and more games being designed as spectator games, sort of like Overwatch, which was really designed as the first spectator-focused esports game.
Moore: It is not only about the competitive scene but also the community and most importantly the fans to define the potential. PlayerUnknown’s Battlegrounds is taking over Twitch and we will see how it pans out as a competitive league and I am also curious to see how the LAN events are organized with 20 squads of 4. The current leaders of the pack like LOL, CS:GO, DOTA2 still have massive legs and OG’s, so new games have a lot of fanbase and a proven esports competitive experience. That is the key, everyone games but not everyone goes to an esports match and participates in the experience.
Where do you see esports in the next three years?
Ungar: I think lines will continue to be defined and non-endemic sponsors will find their way into esports. The result of more non-endemic sponsorship will lead to a quantum leap in investment. That will allow player salaries to increase, upgrades to venues, creation of venues, more broadcasts, better broadcasts, a larger fan base and more activation.
Coughlin: The real telling thing is going to be, particularly with the Overwatch League, is when the teams are playing in their own venues. Can they fill those venues on a regular basis, and are we going to build fan bases that are loyal to their hometown teams? That’s going to be a very interesting space to follow. If it’s successful, then others are going to follow. The other thing is can all these games live in the same professional esports space or are a few titles going to dominate.
Moore: Same trajectory that reality TV accomplished over traditional scripted content. A new wave of popular culture. We will see professional players on the side of buses as ads selling yogurt, sitting court side at the Lakers game, dating super models, but, most importantly kids will be able to pay for college from their gaming abilities and open up opportunities for an education and a career.
Do you have any last stories or ideas you’d like to share?
Ungar: In recent weeks, I’ve had interesting esports conversations with educators, sponsors, public officials, arena owners and players. There’s an amazing trend developing where esports will become as much of a part of the high school and college experience as basketball and football games. There is still a lot of work to do before that becomes a reality. Once it happens culturally, the sky is the limit for esports as a major lifestyle.
Coughlin: It’s an exciting space for someone who has been around sports for 30 years. I don’t think I’ve ever seen something with such explosive growth and a following on truly a global basis. Soccer didn’t take root in North America until the last decade or two. Baseball hasn’t really taken off globally. Certainly, the NBA has done a great job on a global basis but they are missing pockets around the world. What’s interesting about esports is that it’s truly global and teams have players from literally every corner of the globe. The accessibility of esports is really a differentiating factor and I think it’s going to be really exciting to watch to see how it develops.”
Moore: I think I have the most playing hours in NA PUBG without a chicken dinner…
Lucas Wiseman is the manager of public relations for national marketing agency CHARGE.
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