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Y'know, <<First Name>>I grew up playing video games.

Yah, I'm that generation. And the stories and characters made a profound effect on how I think and even what I value.

But I have to say that advertising in gaming apps is about exciting as waiting for your router to connect to the world wide web in 1996.

Not that it's that different from advertising elsewhere on the web.

Gamers have always been a niche community, eagerly expanding their imagination and skills when plunging into a game.

The economic instability, social change, lack of security, the environmental crisis and populism has had us all searching for some kind of stability over the last decade.

And the pandemic has only added to that urgency of finding predictability, a distraction from daily life and a sense of community.

Today games are a common language and shared culture for both Millenials and Gen Z everywhere.

Why big brands are now getting into games

Gaming has been on the rise over the past few years.

A significant boost in gamer numbers brought subsequent investments into esports – the industry that brought in $186.3 million in September 2020 alone.

Lockdown has pushed those numbers higher than anyone could have predicted.

The current pool of 3.4 billion digital gamers is expected to grow rapidly. 

For comparison, the top two social networks have 2.7 billion (Facebook) and 2 billion (YouTube) daily active users, respectively.

2020 saw both the Travis Scott concert on Fortnite and the Stevenage challenge. 

In the latter, Burger King smartly sponsored the lowest-performing football team in England’s fourth division, forcing games like FIFA to use the team's branded shirts in their video games, enabling the brand to build a complete campaign on the back of the FIFA video game.

One-third of the global population now plays games; everything from casual mobile apps to internationally streamed esports events.
 

But "gamers" remain misunderstood

They make up an audience as diverse and complex as the games they play.

And they have tremendous spending power: more than double the amount of discretionary income compared to non-gamers.

They're also interested in buying a wide range of products, many unrelated to gaming.

They often turn to each other or popular YouTube gamers who have secondary communication channels for recommending their favourite gadgets, media and entertainment items as well as food and drinks.

And that's just the tip of the iceberg when it comes to proving that if gamers aren't a part of your audience you're losing out.

Marketers are beset by an outdated stereotype when it comes to gamers.

To help address this, Activision Blizzard Media carried out a research study to segment gaming by demographics and device usage, as well as how players interact and find comfort or fulfilment through gaming. 

They uncovered a clear split – and important distinction – between those who identify as gamers and those who don't.

The study found four key insights that are crucial for marketers:

  1. There are at least six distinct gamer personas,
  2. Less than half of all gamers identify as a “gamer”,
  3. Only a small minority of all gamers fit the typical stereotype of a “gamer”, and 
  4. The “Exclusive Platform” player is rare. 

By segmenting these consumers, they identified six gamer personas: Lifestylists (10.9%), Player Ones (24.8%) and Next Levelers (4%) - all of which identify as 'gamers'.

The Super swipers (32%), The Dabblers (18.8%) and Denialists (9.9%) don’t identify as a "gamer".

So, if roughly 50% of players don't identify as "gamers", the use of the term can be problematic in marketing.
 

Games are an especially effective channel for communicating with Millenials and Gen Zers.

Both generations have now come of age and have great spending power.

And in-game advertising has evolved into a channel that offers many of the same campaign measurements that other platforms do and is ready for its debut into the media ecosystem.

For brands that can't take the sponsorship leap, in-game advertising is a significant opportunity that allows them to get in front of billions of consumers authentically.

Among the top reasons for spending money in games among US gamers, personalising characters with custom items was a key motivator.

This is an opportunity for fashion brands.

Louis Vuitton already collaborated with Riot Games, releasing both in-game skins and a real-world League of Legends capsule collection.

And Snapchat added digital wardrobe integrations from Jordan and Levi's, among others, to dress up your Bitmoji characters, while Pokemon Go recently launched a new collaboration with The North Face on digital avatar items.

These kinds of collaborations are primed to replace and supplement brands relying on product placement in the entertainment industry.
 

Entering the metaverse

Pop culture influences everything from the music we like to the food we eat and defines what becomes fashionable.

Trends usually start underground, in small specific communities, and bubble up from there to the surface of consumer awareness.

Take comic books; once considered a niche interest, they're now in the mainstream.

And they've worked their way into every form of entertainment; from massive events like ComiCon to Hollywood movies.

American sports is estimated to be a $75bn industry and the global film industry $100bn. Gaming is already bigger than both of these combined and fast becoming a crucial part of the wider entertainment ecosystem.

The unique thing about gaming is that some of the most popular games have managed to create the beginnings of a metaverse. 

For the uninitiated, the metaverse refers to a shared, virtual space that acts as its own always-on world with items for purchase and exclusive content to consume.

In a multiverse like Fortnite or World of Warcraft, people don't only sign-in to actively 'play' the game. Sometimes you log-in just catch up with your friends and shoot the breeze.

To get an idea of the metaverse's potential, just look at Fortnite.

Travis Scott and DJ Marshmello have already performed in-game concerts, allowing players to enter unique spaces and bop along to tunes in a fully decked-out digital environment. 

Approximately 12 million players attended Scott's show.

We've seen a host of other celebrities, pro athletes, and even politicians become gamers to entertain themselves and connect with fans and supporters through a new and valuable channel. 
 

And esports sponsorships are nothing to scoff at

The tournament for Dota 2: The International had a prize pool of $30 million.

That's three times bigger than the Super Bowl or Masters Tournament.

In its 2020 market report, games and esports data company Newzoo, estimated the global esports audience to be 495 million in 2020. They predicted that in 2020, the industry would bring in $1.1 billion — including sponsorships, tickets and media rights. 

That was before the lockdowns. 

Since other professional sports disappeared for several months last year, and have seen their ratings fall since they came back, brands are exploring esport with new fervour.

And Shopify represents one of the biggest bets yet from a major company.

They're launching their own esports team, called the Shopify Rebellion and the branding is in line with their mission to empower small businesses with "#ArmTheRebels. Everywhere".

The team will start by competing in the sci-fi game StarCraft II. Shopify has already recruited three players, including a former StarCraft world champion.

But Shopify is no stranger to esports – they've previously sponsored several esports leagues and Shopify CEO Tobias Lütke is himself a long-time esports fan.

Snacks, drinks, shoes and other types of merch companies have disproportionately sponsored esports up to this point, but now the space is broadening as others seek to reach the highly engaged, young audiences that watch esports.

This parallels the rise of brands on Twitch, the streaming platform of choice for most esports competitions.

Just keep in mind that tactics that work on other social platforms tend to ring hollow on Twitch.

Companies that didn't think their promotions through on Twitch have gotten in trouble. For instance, KFC created a fried chicken emote which was quickly weaponized against black Twitch streamers.

And Burger King secretly used Twitch's tip system to piggyback off of popular streamers.

With each tip BK included a message that automatically played aloud during the stream, essentially allowing them to get their pitch in front of thousands of viewers.

Obviously, the $5 tip was orders of magnitude below the amount that the streamers would have earned through a formal Burger King sponsorship.

Since buying Twitch in 2014, Amazon has rarely mentioned it.

But now Amazon has added Twitch to its larger Amazon Advertising umbrella and even noted that Amazon Music will be integrated into Twitch, a potential sign of more to come maybe?

Right now Twitch doesn't have shoppable streams like Amazon Live does, but it does allow Amazon affiliate links.

It'll be interesting to see how brands, especially e-commerce companies, find their footing on the Amazon-owned platform to get access to its massive built-in audience.
 

Looking ahead to 2021, there are three key opportunities for marketers:

  1. Know your audience – gamers are multi-faceted and diverse, so think beyond the gamer stereotype. 
     
  2. Look to mobile – it provides scale, multiple means of entry and flexibility not available on Twitch. 
     
  3. Context matters – gaming provides the opportunity for creative experimentation but getting the right experience on the right platform, which is inherently brand-safe, is the key to success.

With the immense amount of gaming content available, every brand can easily find its target audience.

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In case you missed:

  1. I asked an AI to tell me how beautiful I am. //MIT Tech Review
     
  2. Data Is Great — But it’s not a replacement for talking to customers. //HBR
     
  3. How to generate buzz in a buzzless industry. //The Next Web
     
  4. How Amazon is making Alexa more conversational. //Modern Retail
     
  5. Airbnb slashes spend in permanent shift from performance marketing to brand. //Campaign

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“Nobody reads ads. People read what interests them, and sometimes it’s an ad.”
- Howard Gossage

Until next week,
Aliyar

PS. Are we connected on LinkedIn? No? Let's remedy that, shall we?
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