Esports and competitive gaming commanded $280 million in ad dollars last year through a variety of video, influencer marketing and sponsorships activations from a bevy of big brands. By 2021, that ad spend is estimated to reach $1 billion, per a report released last month by IHS Markit.
Steven Roberts, the executive chairman at ESL, one of the largest esports companies in the world that operates branded leagues and tournaments such as the Intel Extreme Masters, ESL One and ESL National Championships, joined AListDaily senior brands editor Manouk Akopyan for its inaugural podcast to explain how marketers can control the current that is esports. Below is the transcription of the entire conversation.
Akopyan: Take us through the elevator pitch of how you introduce ESL to people in the industry.
Roberts: Yeah, I think the key elements about ESL is number one, we’re really the only global company and largest esports company in the world. We have 12 offices, 550 people [working]—we have six studios. We produce 20,000 hours of live esports, which is amazing. We own and operate 15-to-20 of the largest esports events in the world in Poland, Cologne, Shanghai, New York and San Francisco. So truly, these events reach out to the global audience. And one of the key things about ESL is that it was started 15 years ago—when esports and competitive gaming was in its infancy. And it was started by gamers, and sort of for gamers. So the authenticity and credibility that both have, and ESL and the company’s culture itself, takes that authenticity and credibility into the marketplace, and into the community.
Akopyan: And like many people, your career didn’t start in gaming, but you ventured off into it at some point. What is your role at ESL? And kind of take us through your day-to-day and some of the responsibility and verticals you oversee.
Roberts: So as you can see, I’m not a millennial which is quite different. Out of 550 people at ESL, I think I’m the oldest guy—and I’m not that old. But, my role is executive chairman for North America, which means I focus on really the large strategic partnerships. Whether that’s a deal that we did with AEG last year and announced for putting esports into a lot of the venues around the world, or partnering on sales for brands and things like that, to really the media side of the business. My background is in more traditional media, so I’m bringing that element into esports and focusing heavily on how we can tell better stories and get esports to a broader market outside of just Twitch and YouTube and onto more of the traditional platforms.
Akopyan: And with your traditional background [before] at DirectTV, what opportunities are there for the games industry, esports and competitive gaming that traditional media is kind of behind on?
Roberts: Yeah, well, you know, traditional media is in a very dynamic time period in its existence with cord cutting, and cord nevers. I have kids that are teenagers, and they’ll never take out a subscription, I don’t think, for traditional cable or satellite subscription. They consume their content digitally. And so, I think that esports, with its huge following and scale digitally, can create a really interesting bridge between the traditional linear broadcast model and the digital model that the traditional media companies are facing and deal with today. So, I think if we can tell the right stories and put in the right perspective . . . content needs the change. We can’t just do what’s been done, or what’s being done on Twitch and on other digital platforms and put it up on linear TV. It’s not going to work. So we’ve got to broaden the market and attract a broader market for that demographic.
Akopyan: Absolutely. And with that comes competitive gaming as well, which is something of a hot topic of late. For any of the listeners out there who don’t know the difference between esports and competitive gaming, how would you break that down for them?
Roberts: Look I think that’s part of the problem. There’s still a huge amount of education that needs to be done in the marketplace with brands and fans. There’s hundreds of millions of gamers out there that compete on a daily basis in their living rooms, in their dens, with their friends around the world, talking on their headsets. And so competitive gaming is sort of inherent in gaming itself. Taking that to the next level of professional esports, where there’s millions of dollars at stake and big arenas, big lights, celebrities and all of those things is really the two points of where gaming is. And we can’t forget about the core, amateur competitive gaming scene because eventually, some of those players are going to rise up to be pro players.
Akopyan: Yes, and with what you mentioned, we see the headlines and forecasts every day about “millions of fans, and billions of dollars in the next 10 years.” They just seem to be out there every day from different sources and a lot of the revenues being driven by the brands who are also investing in it. And there’s also a lot of non-endemic brands. And my question to you is, being at the epicenter of all this where you seek partnerships from both sides, what is the relevant marketing avenue that brands need to actively pursue today? What is your advice to them to find that access into the industry?
Roberts: I think that’s the big question. And each brand will find its different entry that makes sense for them. But finding one that makes sense and one that is truly authentic to the brand values and to the community is sort of that critical link. And so, the conversation that we have with brands and with networks, very often they start as a media buy because, again, just the sheer scale. No one is going to lose their job over deciding on associating with something that is relatively clean and that gets 100 million views, right? It’s taking that next step where brand managers and executives need to take a little leap of faith with esports. It’s not going away—which it’s not, it’s growing—and take a leap of faith that, if we do this in the right manner, an authentic, credible manner, and take the essence of what that brand means. There are ways that we can really leverage esports in ways that, frankly, can’t be done at the NFL and the NHL and more traditional sports just because of how formal those sports have become. There’s a lot of creativity that can be done, and it’s totally appreciated with esports.
Akopyan: And obviously you’ve worked with brands like Mountain Dew and Tostitos, and there’s a multitude of others aside from ESL whether it be Coca-Cola, Buffalo Wild Wings, Quest Nutrition . . . that list goes on and on as well. I’m curious to know what you think has been the best, or perhaps one of your favorites, something that has really resonated to the point where it should kind of be mirrored and scaled up in a different way?
Roberts: Yeah, I don’t know if it can be mirrored because again, each brand is somewhat different, and I think that activation in a sport, or in esports specifically, should be differentiated in some way. But some of the things that we’ve done, obviously with Intel Extreme Masters being the longest-running esports circuit—it’s the longest running sponsorship they’ve ever had–some of the activations they do in integrating their OEM partners and really illustrating and showing off their technology and how their technology can improve the performance of pro gamers and competitive gamers. So, Intel is one of those key partners in esports that has done it the right way, there’s no doubt. Mountain Dew is similar where they’ve taken a different approach and entered in on the amateur level of esports, in an amateur league called the Mountain Dew League and really created an aspirational aspect of that league to where winners of that amateur league can go and become a pro. So that activation is pretty unique.
Akopyan: And you recently were featured as a speaker at our alist summit, and you kind of go through the car wash of the industry esports summits of today where it’s like there seems to be . . .
Roberts: There’s a lot of them.
Akopyan: There are a lot of them, yes. And I actually saw you a couple of weeks ago at one as well. What is the focus of the topics of conversations that you’re having? What is the one question that consistently and constantly keeps coming up that you feel like you’re answering? What is that big million-dollar question everyone wants to know?
Roberts: Yeah. It amazes me still, you know. You see the scale of some of these events that we do, and others do, where there’s 100,000-plus people that come to our event in Poland, or 100 million views on the internet that we get over a weekend. And so, there’s such scale out there and there’s such consumption of this with a very key demographic being mostly male millennials. But on the brand side, there’s still so much education that we continue to seem to do, which is great because brands are engaged enough now where it’s on their radar, and they need the facts, they need the data. And the No. 1 question is something that you asked before: “how do they enter? Where do they enter? Do they enter on amateur level? Do they enter on a pro level? Do they enter on an online league?” People still have difficulty understanding that all of this content being produced and these competitions are not necessarily being held in an arena. You know, we have these big arena events, but those are once a month, a couple every months. All of this other content is done online. And so, for people to wrap their arms and head around that, all these people are consuming this content of matches and watching people play video games online is still and education process. And tapping into that scale is hugely powerful—but it has to be done in the right place.
Akopyan: Obviously with marketers around the world, they’re in that position because they have a good pulse of the industry. Do you feel like they also need to trust the gaming side and kind of embrace that hand-holding process where it’s like “let us lead you to the promised land?”
Roberts: Yeah, and we work with a lot of brands in that capacity. And it takes time; it’s a new industry. And even though we’ve been around for 15 years, it’s a new industry. There’s a lot of entrance into the industry because of the same numbers that they hear about and everyone hears about on a daily basis. And one of the things that we certainly go out and tell our partners and brands that are looking into the space is “you’ve got to be careful because there are a lot of entrants coming in just to try to make it big—and quickly.” It’s not going to happen, and you don’t want to put your brand in that position. You want to go in with certainty when you’re first entering esports, in a place where there is trust, there’s credibility, there’s authenticity to remove and mitigate any of those risks.
Akopyan: And you’ve been in the industry now for how many years?
Roberts: In gaming and esports? For over a year.
Akopyan: So, you’re speaking like the sage fox out of the group right now where you kind of feel the pain points, you know the obstacles that you have to be overcome. What are the lessons that you’ve learned throughout this navigation over the last 12 months? And are you happy with the career move personally?
Roberts: I’ve been involved in esports back when we thought esports—10-to-12 years ago—was going to be really where it was today. It just took a lot longer. So at DirectTV we actually started a professional league called Championship Gaming Series (CGS), and we learned a lot out of that—that, frankly, esports learned CGS and some of the mistakes and some of the wins that we had 10-to-12 years ago. So, very often we look back to those times on what can work, and what can’t work. It’s a different time period now that everyone has the bandwidth to watch, and there’s Twitch and there’s YouTube, things that we didn’t have back then. But the industry over the past 12 months since I’ve been in it, 18 months actually, the growth has been meteoric, which is great. [Companies] like Turner getting in with ELeague—I do believe there’s a tide that raises all boats. I do think that over the next 12-to-24 months we’re going to see some of these players that jumped in really fast—they probably won’t be around in 12-to-24 months. So I think, looking into the future, I see the esports that are there today and doing well, I think they get stronger, they get better, they get better brands involved. I think the demographics get broader, I think more women come in and I think we start telling different types of stories to get outside of just that core gamer.
Akopyan: And before you go, since esports is all about predictions, I need two predictions: one predicting potential doom and gloom and one that is joyous bloom. There’s both sides of the coin. What are two things that you think?
Roberts: That’s a good question. So I think . . . look on the negative side, and I think people see it—it’s the fragmentation in esports. It’s still a pretty fragmented ecosystem, from different IP holders, to the teams, to the team owners. So, I think that fragmentation has to consolidate at some point, I don’t necessarily think it’s going to happen in the next weeks, or months. It’s going to take time. But, if that fragmentation continues or gets worse, I think that will be detrimental in the long term to esports and the growth. So that’s the negative side. I don’t think that’s going to happen. I see all of the moves of the professional leagues coming in and the team owners that are changing. I think that in the long run that’s going to help that fragmentation coalesce a little bit. In the bright spots, look, I think the whole industry is sort of a bright spot. I think that it’s going to continue growing in different ways. My hope is that there’s more games, different types of games that get to the scale. So I think that would be really healthy, that we can find a way to harness all of these other games. We work across 65 games, so as an aggregate, it’s huge. But there’s only a few right now that we can fill a stadium with. I’m looking forward to us and others coming and making sure that there’s other games that can help fill the stadiums.
Follow Manouk Akopyan on Twitter @Manouk_Akopyan