In less than a decade, esports became an international phenomenon with a massive worldwide audience that already rivals the size of those in several established sports. This is attracting numerous sponsors interested in capitalizing on this high number of fans. However, it seems that the globality of this audience can also be a risk for some sponsors. Ergo, this research aimed to determine if the esports fans' globality is a benefit and/or a risk for these brands. For this, an exploratory qualitative method was employed to interview three experts in esports sponsoring. One was responsible for managing the esports sponsorships of an endemic brand and the other two were esports marketing specialists at marketing agencies that assisted brands with esports sponsoring. These individuals were sampled through a nonprobability purposive heterogeneous method and approached via their companies' contact channels. Data were analyzed with NVivo 10. The results revealed that the esports fans' globality is a benefit to brands that operate globally and a risk to those that operate only within certain countries. Hence, it was considered that the fans' globality is a double-edged sword. The importance of this research is highlighted by the great lack of scientific studies in esports marketing and esports sponsoring. Moreover, from a managerial standpoint, the findings are highly valuable for both existing and potential esports sponsors looking to better navigate this largely unknown industry.
Competitive gaming, also known as esports or electronic sports, consists of
videogame competitions professionally organized to attract skilled gamers, also known as
pro-gamers, to compete
Esports started gaining relevant popularity at the start of the 2010s
Among the several benefits of sponsoring esports, increased brand awareness is
one of the most sought out ones
Sponsors find the global reach of competitive gaming very captivating
In essence, esports are a globally spread media sport watched by millions of people
Because of this, now they perceive esports as a lucrative asset
As is evident, there is a wide literature stressing the benefits of sponsoring esports and of exposing brands to its massive worldwide audience. However, it was deduced that this globality may also present a risk to brands and very little literature was found on this subject. Some of the very few literary data on this comes from Winnan (2016) and Mooney (2018), who state that gambling companies that sponsor competitive gaming could face some issues because sponsoring to the worldwide esports audience means promoting gambling in countries and regions where wagering is illegal. However, in this research, another potential risk was hypothesized.
According to Ströh (2017), 44% of the esports audience resides in the Asia-Pacific, 19% in the United States, 25% in Europe, and 12% in the rest of the world. This data led to the inferences that, while global brands may benefit from sponsoring esports, brands that operate within specific geographical markets may be wasting their esports sponsoring investments since they are paying to reach individuals who are not their target consumer. For instance, when sponsoring an international esports tournament, a bank that solely operates in the United States will have a higher cost per target consumer reached than an electrics brand that operates at a global level. Also, the elevated percentage of fans residing in the Asia-Pacific may mean that brands that operate at a global level, but are not popular in the Asia-Pacific area, will also have a higher cost per target consumer reached than brands that operate at a global level and are relatively equally popular across the entire world.
Due to the issues of this ambivalent dichotomy, this study had the objective of determining if the esports fans’ globality is a benefit and/or risk to esports sponsors.
That is, this research aimed to answer the research question: How does the esports fans’ globality affect esports sponsors? Hence, the following two hypotheses were developed:
H1a: The globality of esports fans is a benefit for esports sponsors.
H1b: The globality of esports fans is a risk for esports sponsors.
This research’s relevancy is justified by the scant scientific research on esports
To accomplish the aim of this study, a qualitative exploratory design was adopted. The researchers’ stance was overt, the study setting was non-contrived, and the time horizon was cross-sectional. The sample was comprised of three experts in esports sponsoring who worked at different companies. Particularly, one endemic esports sponsor (EES) and two marketing agencies (MAs) that assisted brands in esports sponsoring. The sampling method was nonprobability purposive expert heterogeneous, meaning that there was an intentional selection of a heterogeneous group of people with significant levels of experience and knowledge in esports sponsoring. To ensure that the acquired empirical data was relevant, the sampling was limited to companies and individuals that had at least two years of experience in esports sponsoring. The members of the sample were contacted through the publicly available contact details and contact channels of the companies. The unit of observation and unit of analysis was the organization.
The empirical data collection happened through an online interview with each expert via video or voice call (in Skype or Zoom), depending on their preferences. Here, the interviewees were asked about their company’s characteristics and to answer the open-ended question “How beneficial and/or harmful do you believe the esports fans’ globality is for esports sponsors?” Before the data collection, the questionnaire was pretested from April 14th 2019 to May 21st 2019 on a total of nine people with experience in scientific research, marketing, and management. Subsequently, the data collection occurred from August 15th 2019 to December 12th 2019. The empirical qualitative data were analyzed via the NVivo 10 computer software. To ensure that all the ethical norms of confidentiality were met, all data that could lead to the identification of the interviewees or their companies (e.g. person or company name, exact year of company foundation, etc.) were either deleted or modified.
In terms of the specificities of the sample, EES1 was founded in the 2010s and operates at an international level within the gaming chairs industry. This company has been sponsoring competitive gaming for roughly nine years, has sponsored around 44 esports entities, and has been associated with around 41 esports videogames. The interviewee who represented this endemic esports sponsor is the brand’s country general manager in Brazil, the United Kingdom, Portugal, and Spain.
MA1 was also founded in the 2010s and operates at an international level by assisting brands in sponsoring esports. This company has been connected to esports for around four years, has assisted around 40 esports sponsors, and been associated with roughly 39 esports videogames. The interviewee who represented this marketing agency is the company’s founder and director.
MA2 was founded in the 2000s and operates at an international level by assisting brands in sponsoring esports. This company has been connected to esports for around eight years, has assisted around 50 esports sponsors, and has been associated with roughly 43 esports videogames. The interviewee who represented this marketing agency was the company’s senior market analyst and esports specialist. 3
All experts agreed that the globality of the esports audience can be both a risk and a benefit to esports sponsors. While there were few comments on the benefits, a lot of empirical data was gathered regarding the risks. Despite there being more data on the risks, there is already an extensive literature supporting the benefit hypothesis. Ergo, it was considered that both hypothesis H1a and H1b were validated, which means that the globality of the esports audience is a double-edged sword for esports sponsors.
Regarding the benefits of having a worldwide audience, all experts, especially EES1, stressed that this is a massive benefit for the brands that have a global consumer target. However, in terms of risks, EES1 pointed out that brands with a geographically very precise target consumer base (e.g. the United States) will have unsatisfying exposure levels. EES1 explained that this is because the known massive number of esports fans refers to the worldwide fan base. Moreover, it is very difficult to determine how many esports fans exist within specific countries. EES1 noted that, for example, while it is estimated that there are 250 million competitive gaming enthusiasts (i.e. highly engaged esports fans), this is on a global level. The United States, for instance, only have between 30 and 40 million esports enthusiasts.
MA1 also provided very insightful data about the downsides of having a global audience. Particularly, it was stressed that, contrary to sports, where a sponsor can promote its brand and products to a very precisely-targeted geographical region simply through the sponsorship of athletes affiliated with that locale (e.g. the USA’s state of Texas is represented by all athletes from the American football team, the Dallas Cowboys), in competitive gaming, a sponsor is unable to target a precise geographical region because almost every esports team does not represent nor is associated with a particular country or region. MA1 noted that, for a company that only operates in the United States, for instance, despite it being much more expensive to sponsor a sports team like the Dallas Cowboys than an esports team like Team Liquid, almost the entire fan base of the Dallas Cowboys resides in the United States whereas just roughly 20% of Team Liquid’s fan base resides there. MA1 stressed that this implies that, for a company that only operates in a specific geographical region like the United States, the cost of sponsoring Team Liquid would be much higher than what the sponsor initially assumes it is paying because the cost per consumer reached in the United States would be five times higher than what the sponsor initially expected. This means that it could actually end up costing the same, or more, than sponsoring the Dallas Cowboys sports team. MA1 mentioned that the majority of sponsors are not brands that can operate at a global level or simply do not have a worldwide target audience, so the sponsoring of a sector whose fan base is all over the world is unproductive. Furthermore, MA1 defended that even large international brands usually have their marketing budgets divided per geographical regions, so they prefer to have their sponsorships separately activated within particular geographical territories so they can adapt their messaging to different cultures. Ergo, MA1 points out that sponsors are more worried about effectively and efficiently activating their sponsorships in the correct way and only within the desired regions rather than sponsoring to a global market, like competitive gaming, where it is extremely difficult to control and know which countries will be more exposed to their promotional messages.
Similarly, MA2 noted the importance of knowing from which countries the viewership is coming from as well as how difficult it is to determine the viewership numbers within particular countries or regions. For instance, MA2 pointed out that, in the case of some European esports tournaments, sometimes roughly 90% of the viewership comes from China, which may not be the desired target market of some sponsors.
The empirical data from the experts were mostly in line with the literature. EES1, MA1, and MA2 were in sync with several authors, like AEVI (2018), Hiltscher and Scholz (2017), Jenny, Manning, Keiper, and Olrich (2017), Keiper, Manning, Jenny, Olrich, and Croft (2017), Mooney (2018), Newzoo (2018), Seo and Jung (2016), Stein and Scholz (2016), and Taylor (2016), who describe the esports fan base as highly global. In terms of the benefits of having a global audience, EES1 was in line with Nielsen Esports (2017), who reports that sponsoring competitive gaming benefits brands by giving them massive exposure.
Although there is scant literature on the risks of sponsoring an industry with a global fan base, some connections were found after conducting the interviews. For example, MA2 was in sync with both Ströh (2017) and Shabir (2017), who mention that the majority of competitive gaming’s viewership originates from Asia. Likewise, MA1 was in line with Ströh (2017), who notes that esports viewership is spread across the world. MA1 was also in accordance with Ströh (2017) and McTee (2014), who report that competitive gaming teams are not connected to, or are affiliated with, specific cities or countries. As stated by Ströh (2017), this is because the majority of these teams were created in the online world. Also, MA2 was somewhat in sync with Winnan (2016), who mentions the difficulties of developing sponsorship communications that are equally effective and well-received by all types of cultures and countries, while at the same time not disrespecting anyone and being captivating for everyone. Similarly, Nielsen Esports (2017) notes that esports fans are not homogenous and have varied dislikes and likes. 3.1
Managerial Implications The results bring implications that are highly significant and relevant for companies interested in sponsoring competitive gaming and looking to improve their understanding of how the esports fan base’s globality may benefit or harm their companies. It was concluded that the main element that will dictate if the esports fans’ globality is a risk or a benefit is the sponsors’ consumer target. On the one hand, companies with a worldwide target audience are prone to benefit greatly from competitive gaming since it is a cost-effective method to easily reach a global audience who may even spread the news about the company’s sponsorship if it is correctly activated. On the other hand, companies that just target consumers from a very precise country or region are prone to not get the most out of their sponsoring investments. For example, if a competitive gaming tournament is seen by four million fans across the world and cost 40,000$ to sponsor, it does not mean that the cost per consumer reached was 0.01$. If the sponsor’s target consumer only resides in the United States and only one million fans from that country watched the tournament, then that implies that, for this particular sponsor, the cost per consumer reached was 0.04$. That is to say, in this example, it would actually cost four times as much for a company, whose target audience only resides in the United States, to sponsor this hypothetical tournament when compared to a company that has a worldwide target consumer. Companies that operate only within certain regions should become aware of this problem and carefully consider if their sponsoring investments can still reap positive ROIs before venturing into esports. Like MA2 noted, it is crucial that companies understand what they are doing with their esports sponsorships.
It is important that companies with geographically specific target consumers comprehend that the competitive gaming’s viewership figures reported by the media and in most research are not representative of the number of target consumers who will see the sponsor’s communications. The viewership numbers and exposure to target consumers that these sponsors will get will tend to always be lower than sponsors that have a global target consumer. Furthermore, sponsors will have a hard time determining the actual number of people who viewed their promotional messages within particular countries. This difficulty in determining viewership of particular countries is even more pronounced in esports since esports teams with regional affiliations are extremely rare. This problem is connected with the issue of the cost per target consumer reached. Although competitive gaming is considered to be cheaper to sponsor than sports, esports may become more expensive to sponsor for companies with geographically specific target consumers because their investments will go into reaching the global esports audience. Ergo, most of these brands’ investments will be wasted in reaching individuals that it is unable to sell to. Hence, it could be better for companies with geographically specific target consumers to sponsor sports or other markets where they can much more effectively reach and engage with particular regions. This will ensure that the sponsor maximizes the effectiveness of its investments.
Lastly, when sponsoring to a worldwide audience, companies have to meticulously and very carefully create a promotional message that is in sync with all the different cultures of the world. According to CGC Europe (2015), brands must have different approaches for different markets, but sponsors need to comprehend that esports events are streamed to the entire world. Ergo, all of the sponsor’s promotional material and messages must abide by the wide spectrum of different social norms so that no one is offended and the ads can be equally appealing for everyone.
This study was severely limited by the scant research and reliable literature on the particular field of esports sponsoring, esports marketing, and on the effects of regionspecific brands sponsoring a global market. Equally limiting was the difficulty to reach and interview a considerably large number of experts in esports sponsoring, which resulted in a dissimilar number of EESs (i.e. one) and MAs (i.e. two). This may have biased the empirical data to place more emphasis on the views of marketing agencies – which composed two-thirds of the sample – and less on the opinions of endemic esports sponsors.
Future research should use the findings of this study to analyze if there are any strategies that sponsors with region-specific target consumers can use to minimize the risks identified in this investigation or strategies that brands that operate globally can use, within esports, to better engage with all the world’s different cultures. It would be equally interesting to analyze if there are more competitive gaming sponsors being benefited or damaged by the existence of this global audience and to interview more sponsors and marketing agencies to analyze how the data compares to this study.