As we examined yesterday, brands both big and small are increasingly looking towards emerging subcultures to build a dedicated audience. In the second installment in this two-part series, we explore how established soda and energy drink companies are focusing on the emerging electronic sports (eSports) community, and how one emerging coffee brand is betting big on the so-called “sport of the future,” drone racing.
Big Brands See Growth in eSports
While fitness enthusiasts are off pursuing the physical challenges of CrossFit and Spartan Race which we explored yesterday –elsewhere, technology has allowed a new type of “athlete” to emerge and a new avenue for brands to reach them and their fans.
Esports, or competitive video gaming, has seen massive gains over the past several years, with the market expected to pass the $1 billion mark by the end of the decade. Streaming platforms such as Twitch have helped make video games a spectator sport comparable to watching a baseball game on TV. And beverage brands — particularly energy drinks, which have deep roots within the hyper-caffeinated gamer communities — are paying attention.
Monster Energy has sponsored competitive gamers across the world alongside the extreme motorsports long associated with energy brands. Rockstar likewise partners with gaming companies for promotions around new releases, currently working with Activision to cross-brand the release of “Destiny 2.” Bawls Guarana made gamers a focus from an early stage, initially selling in coolers at CompUSA stores and sponsoring online gaming parties before expanding into more traditional retail outlets.
At PepsiCo, Mountain Dew has been a long time favorite brand for gamers, and the company has taken its appeal to the gaming community far beyond its Game Fuel promotions. The company last month announced it had renewed its partnership with the Electronic Sports League for a third year for the Mountain Dew League, a branded initiative which gives gamers a chance to qualify for the Professional ranks.
“We decided to start going into eSports because we saw that it’s big and it’s growing,” Stephanie Danzi, senior brand manager for Mountain Dew, told BevNET. “It’s really popular with the male millennial audience, a lot of whom drink Dew. We really like as a brand to serve as instigators and we knew if we wanted to help progress the culture of gaming the natural place to go would be eSports.”
Beyond the Mountain Dew League, the brand has also partnered with professional gaming teams, including SK Gaming and Team Splice. The brand has produced content featuring the teams for the official Mountain Dew Twitch channel and hosted special events that help reach the wider gamer culture.
According to Newzoo’s 2017 eSports Market Report, the eSports economy is currently worth $696 million, with year-over-year growth of 41.3 percent. Brands were expected to spend $517 million in 2017; of that total, $155 million went to advertising, $266 million was spent on sponsorships, and $95 million for media rights. Consumer spending on merchandise and tickets was expected to reach $64 million. The market is expected to hit $1.4 billion by 2020.
In 2017, the estimated global viewership for eSports competitions was 385.5 million individuals. Of that, about 191 million are considered “enthusiasts,” while 194 million are only occasional viewers. Enthusiasts are expected to increase by 50 percent by 2020.
“As the convergence of games and traditional media accelerates, eSports is leading the way,” wrote Newzoo CEO Peter Warman in the report. “Already, eSports has been broadcast on TV in more than a dozen new countries, major media companies have invested big into eSports, and numerous traditional sports teams and agencies have entered the industry.”
According to Danzi, eSports is also a way for Mountain Dew to reach advertisement adverse millennials. The Mountain Dew League Championship reached more than 2.2 million viewers streaming on Twitch, many viewing for hours at a time.
Because of the at-home nature of online gaming, and many in the culture’s night owl tendencies, eSports advertising even provides brands an avenue to reach consumers 24 hours a day.
“The first step is you have to create something new and something that feels authentic to even get them in the door,” Danzi said. “We’ve also made some strategic partnerships with the right influencers, and with Twitch the right media folks to make sure we get the right placements and draw in an audience.”
Drones: ‘The Sport of the Future’
Gaming may be establishing itself as a new, powerful market for brands. But FORTO Coffee Shots founder and CEO Neel Premkumar has found a way to get even more niche among tech-based hobbyists.
Last year, FORTO partnered with the Drone Racing League to sponsor what the League calls “the Sport of the Future,” competitive races for the flying, remote control hobby planes. Founded in 2016, the League’s events are broadcast on ESPN and replayed on affiliate channels such as Sky Sports and Disney XD, giving FORTO hours of screen time, including a 30-second TV spot and logo placement.
Drone sales are expected to hit $12 billion by 2021, and the industry is constantly innovating in both the toy and professional racing markets. For FORTO, which is still an early-stage brand, aligning with drones also helps the product gain placement.
“I think things like racing have a lot of value with buyers,” he said. “Not necessarily correlated to the brand but they allow an image around speed.”
According to Premkumar, partnering with the Drone Racing League made sense after his company realized there was a significant overlap in Facebook users who had liked FORTO and also liked the League. Drone racing enthusiasts also have a strong online presence, he said, watching events on Youtube and the Drone Racing League’s Simulator game is a popular streaming choice on Twitch.
“Unlike the NASCAR sponsorships, which are ridiculously expensive, this is something that appeals to the millennial consumer that buys our product,” Premkumar told BevNET. “I actually think there’s a lot more people that watch drone racing than actually own a drone.”