Why non-endemic brands are starting to get more interested in esports

While esports may not be the money making juggernaut sports is, it is still valued at around US$1.45 billion in 2022, and has the potential to reach millions across the globe in a very attractive demographic — the youth and young adults.

Various online reports put the esports market in 2022 ranging from US$1.39 billion to the aforesaid US$1.45 billion, with more growth projected over the horizon.

Of course, that's a far cry from even Manchester United, which as a football club is already twice the value of the entire esports market at US$3.21 billion.

Still, beyond the fact that Manchester United has had more than a century to grow as a brand, US$1.5 billion is nothing to sneeze at, and non-endemic esports brands are taking note.

Take for example, Swedish fast-fashion giant H&M, which became a sponsor for the Dota 2 Bali Major. Talents were seen wearing the brand's clothing on air and mentioning that they were decked out in it. And of course, walking around it around Ayana Resort, the venue of the tournament.

"My initial pitch to H&M or my initial idea or vision was to showcase the full range of H&M products, and to showcase their active wear," said Markus Lövgren, Chief Strategy Officer of Epulze, which were behind the Bali Major together with IO Esports.

"I think there's a perception that perhaps esports fans or players are not the most active one, but that's not true. I think there's almost the opposite, as you can see, especially with pro teams having very rigorous workouts" said Lövgren.

Still, the deal with H&M came late into the preparation for the tournament, and limited the kind of activations the brands could do with Dota 2 stars and talents form across the globe.

"So we only had a few weeks to prepare, and we had to scrap some of the content we initially was hoping to do," Lövgren said.

He added that H&M had a more conservative strategy, preferring to "dip their toes" before "going all out from the get go", something that the Epulze CFO says is a good strategy for any brands looking to go into esports.

Careful positioning

One thing that non-endemic brands have to watch out for is failing to find relevance to their target audience, or even actual participating gamers, says Julian Song, a regional digital marketing lead.

A great example would be how football superstar Cristiano Ronaldo pushed away a bottle of Coca-Cola at a Euro 2020 press conference, which saw the beverage company's market value plunge US$4 billion.

"If the pro gamers are not actively using the brand/product during games, then there's little believability that it is actually enhancing or contributing to their performance," Song said.

"Engage the pro-gamers and their managers before even going all-in, and find a positioning that makes sense, or actually develop a product that does."

And sometimes, dipping your toes can mean just getting involved first and figuring out where to go after.

That's probably why you have a water dispenser brand like Ruhens joining the fray for the first time by getting involved with Singapore-based Bleed Esports.

"Our primary goal is to raise brand awareness and connect with a broader audience. We want to position Ruhens as a brand that understands and supports the interests of the modern generation," said Joel Lim, Managing Director of Home Hedge Pte Ltd, which operates Ruhens Singapore.

Lim said the brand hoped to showcase "the quality and reliability" of the brand's products, and "create a positive association between Ruhens and the gaming community".

The partnership with Bleed includes "prominent brand visibility" during esports events, as well as logo placements.

It's simple, but that's also in line with H&M's strategy for going into esports.

Getting into esports beyond product placements

H&M were "happy" about their investment into Dota 2, according to Lövgren.

He told Yahoo Esports SEA that the media value for the event was "way over expectations" at many times the value of their original investment, and hopes that the fashion brand will continue investing into the space.

It's not the first time non-endemic brands have gone into esports. Riot Games, for example, brought payment corporation Mastercard into League of Legends in 2018, a deal which they recently extended to their first-person shooter VALORANT.

And, unlike other brands who get featured by getting in-stream placements, DHL successfully built a marketing campaign that featured its EffiBot mascot as a courier in Valve's Dota 2 in 2018, at ESL One Birmingham.

This theme played on the company's delivery roots, while also catering to the Dota 2's mechanics of delivering items to the game's heroes through couriers.

This showed an understanding of the audience, and how to properly engage them, despite DHL having no roots in esports at all.

"It’s very easy for non-endemic brands to play in gaming and esports, provided they are willing to follow a known recipe for success below, and where needed, break the rules that don’t apply here," said Graeme Du Toit, Head of Sales and Marketing for ESL FACEIT Group Australia.

The only time it’s likely to be difficult is when brands aren’t able to or aren’t willing to adapt their strategy to meet this consumer segment," Du Toit said.

"Lead with fun, humour, or authenticity. Don’t fall for the trap of trying to be ‘epic’ and avoid gaming tropes," he added.

DHL is an outlier, though.

Most brands just have product placements, such as having their products on stream.

A recent deal in Singapore for MOONTON's Mobile Legends' esports league saw McDonald's Singapore coming in as a presenting sponsor, and Head & Shoulders as another.

Head & Shoulders shampoo bottles can be seen on analyst desks at MPL SG, and McDonald's has its logo prominently featured in the game with pop ups during a lull in action.

OCBC Bank, which sponsored the last few seasons of MPL SG, said that the sponsorship had been well-received, with its customised debit cards featuring game heroes drawing a 50 per cent increase from its average monthly digital sign-ups.

"We have even been told the esports community now automatically associates our youth brand with gaming," Sunny Quek, OCBC's Head of Global Consumer Financial Services, told Yahoo.

These are relatively simple and basic activations, however, with other ways where esports production companies can use the game as a medium for to reach potential customers.

Epulze's Lövgren suggested that with the right tools, esports production companies can "tie specific in-game events to sponsor activations".

"Say for example, in Dota 2, every time Pudge uses Ultimate, then you can tie that in and he goes like 'nom nom nom' then you can tie that to perhaps a food activation. It's like oh, are you also hungry? Here's, you know, check out this food brand or stuff like that."

Aloysius Low is an ex-CNET editor with more than 15 years of experience. He's really into cats and is currently reviewing products at canbuyornot.com