By Bastian Mathes, Director of Insight Planning at OMD Germany, and Johannes Laakmann, Manager Brand Experience at FUSE Germany
Opportunities for brands in the world’s most dynamic entertainment category
Towards the end of 2014 Farshad Nayeri tweeted an interesting experiment:
“Fill in the blank and I’ll tell you your age: Mi _ _ _ _ _ ft.”
At the time, Microsoft had just announced they’d be buying Swedish Studio Mojang, maker of mega-hit game Minecraft, for $2.5 billion. Obviously, the situation isn’t quite that explicit yet the experiment clearly outlines an important truth:
The media reality of young people is fundamentally changing. And, gaming is a key element of that new reality.
Driven by the proliferation of mobile devices and the increasing popularity of online games, the number of gamers has grown extensively over the last few years (and it’s not just teenage boys anymore). The stats from Germany below show a balanced gender ratio and distribution across all age groups among gamers.
Do you play?
Source: Bitkom 2015
Basis: German population 14 years plus
This development has had a significant impact on the overall media usage of gamers. TV remains the Germans’ most beloved leisure time activity with around 205 minutes of daily usage among 14-49-year-olds. But with 55 minutes average daily usage, the same age group is already spending significant parts of their media time budget on gaming. For comparison: the average time a user spends on YouTube per day is approximately 15 minutes. More drastically this trend can be witnessed among 16-18-year-olds who spend as much time gaming as they do watching TV (124 vs. 128 minutes).
“Gaming is not a fringe phenomenon anymore but equally normal to watching TV or going to the movies”, summarises Dr. Axel Pols, Chief Economist of Germany’s digital association Bitkom. His statement also indicates a transformational shift in the industry:
Gaming is increasingly becoming a “viewing medium”
Gaming-oriented content and events are attracting massive audiences and offer a huge opportunity for brands to connect, especially with younger people who increasingly escape from the influence of traditional media. “Let’s Play” videos for example, where people watch gamers play and comment on games, are one of the most popular categories on YouTube. It’s such videos that made 26-year-old Felix Kjellberg aka PewDiePie, the world’s most successful YouTuber with more than 43 million subscribers, (plus quite a few other millions on Facebook, Twitter, Instagram etc).
The second big trend that is a testament to this shift is the rise of eSports – competitive tournaments of video games among professional gamers. Just a couple of years back, such events consisted of a few passionate hard-core gamers being watched by a handful of viewers in temporarily equipped local gymnasiums. Nowadays, eSport championships fill whole stadiums and are broadcasted globally to millions of fans. The eSport “disciplines” are varied but the most popular ones are so called MOBAs (Multiplayer Online Battle Arenas) like Dota 2 or League of Legends (LOL). The latter game being played by 67 million people every month! The best among them are celebrated by thousands of enthusiastic fans, gathering huge followings on social media. The last LOL World Championship in Berlin’s Mercedes-Benz Arena sold out in six minutes and was watched by 36 million people via live-stream – figures that other live sports events can only dream of.
The go-to channel for fans to follow the games online is however not YouTube but Twitch.tv, a platform specifically designed to stream video gaming. Gamers can set up their own channel to broadcast their gameplay and interact with the viewers via an integrated chat function. While YouTube remains the market leader in online video (including “Let’s Play” videos), it has failed to create a gaming-oriented live streaming service early on. Consequently, Twitch.tv benefited from the rapid rise of eSports, growing from 3 million unique users in March 2012 to 55 million in July 2015, now serving 100+ million monthly unique users. Therefore, it didn’t come by surprise that Amazon was willing to pay close to a billion US$ for Twitch.tv in 2014 after a bidding war, where apparently Google was also involved. Google’s reaction – a standalone service YouTube Gaming which was launched a year later in August 2015.
Hype or opportunity?
The eSport trend didn’t remain unnoticed of course. Major media outlets picked it up (check out Vice’s 5-part documentary here) and triggered the interest of marketing departments. Coca-Cola, for example, is running a partnership with League of Legends-maker Riot Games, hosting various public viewing events in cinemas across the US.
“This is a new form of media consumption and the world is changing (…). Theatres have been very receptive to eSports even with blockbuster summer movies playing,” says Matt Wolf, Head of Gaming at Coca-Cola. And whilst we’re seeing some big global brands engage with eSports – mainly the “usual suspects” like Red Bull, HTC, Samsung to name a few – a lot of potential remains untapped. Because despite all the facts mentioned above, many brands are still hesitant to consider gaming as part of their marketing strategy. “Not relevant”, “too niche” or “doesn’t fit the brand” are some common preconceptions. Maybe some marketers still remember how “in-game advertising” was hailed the next big thing 10 years ago…and failed to meet the expectations. But what’s different today is that since then gaming has become one of the biggest entertainment industries globally. It has developed into an ecosystem of touch points and spawned new content formats that brands can use to connect with their audiences in new ways.
Generally, gamers and eSport fans are open for brands to join their community. We conducted a qualitative survey among gaming and eSports enthusiasts and found out that 90% of them take a positive view of brands that get involved with eSports, Moreover the majority not only consider those brands more sympathetic but even would prefer them during a purchase decision.
If they stick to the rules, that is.
Unsurprisingly, advertising formats that disrupt the gaming or viewing experience are perceived as negative, whereas more native brand integrations score more positively. Connected to that is the expectation of long-term commitment. Brands should avoid blunt badging exercises and generic short-term campaigns but craft long-term partnerships with bespoke content to create a true value exchange between the brand and the community.
eSports and game-oriented content is not a fad but an emerging entertainment category that’s here to stay. The opportunity for brands (and us) lies in the fact that they cannot just participate in it but actually shape it. The biggest challenge, however, will be to avoid just applying the traditional ad models and formats (as we usually tend to do).
Let’s look at this opportunity as a blank canvas and work with relevant clients to come up with fresh ideas that will help them use this trend to connect with the right people, and to grow their businesses in meaningful ways.
Wonder what this could look like?
Watch this space. Next week we’ll share with you a great case that we’ve been executing with a client here in Germany…and it’s not one of the “usual suspects”. You’ll be surprised.