Do brands in APAC have solid enough esports and gaming strategies?

According to Limelight Networks, in 2021, consumers globally spent an average of eight hours and 27 minutes playing video games per week, a 14% upswing year-over-year.

This means brands en masse have realised that gaming is undeniable for audience engagement and are now seeking a way into gaming but with undefined knowledge of how or what that means for their brand.

Through his conversations with brands in APAC, Ryan Cunningham, the founder and managing partner at You Know Media, says the challenge for brands in the region is understanding the gaming ecosystem first. They can then build out how that can work for their brand with solutions that work, not just those that tick boxes.

"Gaming is not one thing; it is a new generation of engagement with multiple avenues and opportunities. So, brands need to prove strategic help in where they invest, which suits their category and brand," he tells Campaign Asia-Pacific.

"A significant challenge is that confidence is often eroded with many loud opportunistic groups entering gaming in recent years who are not focused on delivery."

Carlos Alimurung, chief executive officer of One Esports, points out the biggest problem that brands face when they think about entering esports is not authenticity. He says being authentic was a big problem in esports, maybe three to five years ago, but now, authenticity is just table stakes.

What the esports community is looking for is a commitment from brands, he explains, as they are looking for a brand willing to show that they want to make esports as big as English Premier League, the Olympics or the NFL.

"The best way to show commitment is by participating across the entire fan experience, being involved with events, teams, and social media content, and having a cohesive and consistent message across all these parts of the fan experience. In the next few years, that will be the formula for connecting with this community," he explains.

There are both opportunities and challenges in gaming and esports - some of the possibilities include the growing pool of mainstream gaming talents - which is essential in garnering more reach and engagement across the sports industry.

This growing stream of gaming talents and audiences is evident with the record of more than 400,000 live viewers in the last Mobile Legends: Bang Bang Professional League scene in the Philippines, notes Charlie Baillie, the chief strategy officer of Ampverse.

He says this presents an excellent opportunity for brands to leverage the growing scene to increase their esports market's reach further.

"On the other hand, one of the glaring challenges includes the scarce resources or lack of education made available by brands, resulting in gaps and inconsistencies in the reporting framework across the industry," he adds.

Antoine Gross, general manager for Southeast Asia at Impact.com, observes with the industry's continued growth, the avenues for brands to expose their products and services are many, especially on mobile, which accounts for a significant portion of the total revenue pie.

However, in tandem with attractive growth opportunities, he says he hears brands talking about the iOS privacy changes and their impact on programmatic ad strategies. Brands are also concerned with phasing out third-party cookies, which impacts how marketers think about their community building and associated data collection efforts.

"In addition, no conversation on tapping into gaming communities is complete without fears around toxicity and online bullying, giving brands pause when considering channel suitability and where their content is placed. On a related note, frequent negative PR around how toxicity and harassment are not being addressed inside gaming companies is also damaging, especially in brand c-suites where negative gaming stereotypes continue to permeate."
—Antoine Gross, Impact.com

Finding different revenue streams and ROI in esports

Even though numerous gaming channels have seen strong year-over-year growth, the overall landscape is still fragmented, and few revenue figures are available to paint a complete picture. There are still misconceptions about esports among marketers, which may cause missteps in everything from return on ad spend to brand favorability.

Brands in APAC keen to know where to invest their marketing dollars must understand the four big verticals in esports are game publishers, esports teams, media channels like Dotesports, Dexerto and Twitch, and third-party broadcasters.

Cunningham notes media analysis groups and consultancy firms have made significant missteps recently, pushing reports based on tiny panel sample sizes or cherry-picked sectors. However, he is quick to point out that this is because they are not equipped, rather than ill intentions.

He explains data in gaming is not like traditional media because gaming data is abundant. Still, it is in the hands of game publishers, with secondary avenues in broadcasters, teams and media groups.

"Gaming publishers hold unlimited data, but they rarely share it. This is why we needed to build trust with them to utilise actual data of gamers playing, engaging, spending and watching. The data is there; it's just not being sold to groups who do not have credibility in gaming. Brands seeking to engage should look to see proven results. Case studies from partners can back up their claim and show that the work they are doing is being continued or grown with the brand they did it with."
—Ryan Cunningham, You Know Media

With consumers stuck behind screens because of the Covid-19 pandemic for two years, the games industry has emerged as one of the few success stories from the pandemic. As a result, Gross says he expects to see a shift in marketing spending on the horizon.

However, with uncertainty in the stock market, the crypto crash and a potential recession on the horizon, he says it is likely marketers will start taking a more cautious approach. This uncertainty could mean more excellent bottom-of-funnel investment in concrete terms, less about esports team branding, merchandising and event sponsorships, and more ROI-driven, acquisition-focused campaigns.

"In the gaming context, this will also affect content partnerships with games news websites, YouTube and Twitch channels, an even smaller community channel promotions like Discord. As a result, these publishers and community admins will become more accountable," he says.

"We are already hearing how our partners are implementing more hybrid payment structures, such as decreased upfront placement fees combined with performance-driven, affiliate-type commissions. This also ties in with how brands will dig deeper in measuring the lifetime value of acquiring a new user, prioritising healthy growth over opening the funnel wide."

Ultimately, Baillie says marketers have to understand esports is still a developing media channel. He says  Ampverse is helping its clients to close the gaps and providing them with more education sessions about the esports ecosystem and how brands can seek to quantify success.

"We are also investing in third-party measurement tools to give brands greater transparency and generate reports to better guide brands in their decision-making," he adds.

Data privacy

Data privacy is a big topic for consumers everywhere. However, without context or understanding of why data capture is essential, audiences will err on the side of caution based on their experience in other sectors around data.

Research by AppsFlyer has found that 80% of gaming apps in Australia and New Zealand have implemented Apple's App Tracking Transparency (ATT) prompt, with a low user opt-in rate averaging 37% across genres.

The onus and opportunity are on the game publishers to provide an understanding of the benefit of data capture, says Cunningham.

For example, if a game needs location and internet status tracking information to provide better game service like in multi-play matchmaking, server preference for performance or localised offerings (like geo-targeted promotions), consumers will likely opt-in.

"But not all game publishers capture data the same and should not also be categorised under the same brush. This is where brands need to research which audiences are qualified and which are not. In a time-limited landscape, this qualification of the audience has been a critical factor in how we have built strategies for brands," he explains.

On the other hand, Gross notes in Southeast Asia, the mobile iOS market share is much lower than ANZ, with Singapore and Malaysia under 30% and Indonesia under 10%. So, while the effects of Apple's ATT prompt have not been as heavy in SEA, there is an increasing emphasis on consumers having control of how their data is being used and how brands look after it.

This emphasis has forced brands to tighten their cybersecurity measures, especially when reports like Okta's "The State of Digital Trust" found that following a brand misusing or compromising their data via a breach, 40% of Malaysians would quit using the company's services altogether.

"As there will no longer be an ocean of third-party for marketers to tap into in years to come, the onus will be on companies to look after their first-party data and leverage it sensibly," he says.

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