Esports 2023: It’s game time for advertisers too

2022 was truly a game changer for the Indian esports and gaming industries. Apart from massive growth across segments and cohorts, India showcased its potential it possesses in esports at the Commonwealth Games in Birmingham, securing a bronze medal in the DOTA 2 esports title by defeating New Zealand. With esports being a part of next year’s Asian Games as an official medal event and India participating in five different titles, expectations are high. And with so much happening in the sector, advertisers sure are keeping a tab.

Market High

According to the FICCI-EY media and entertainment report for 2022, the Indian online gaming segment is expected to reach Rs 153 billion by 2024 at a CAGR of 15% to become the fourth largest segment of the Indian M&E sector, driven by innovations across NFTs, metaverse and esports. India is currently home to over 430 million mobile gamers and the number is estimated to grow to 650 million by 2025, according to the latest data provided by the Internet and Mobile Association of India (IAMAI). And advertisers are logging in.

Aditya Pandit, Associate Director- Media, Carat India, points out that with brands rallying to mark their presence in the world of gaming & constant tech evolution, the advertising possibilities today are endless. “It is no more vanilla banners that brands can use to reach out to gaming enthusiasts. There are in-game ads, in-game integrations, live stream advertising opportunities, KOL tie-ups and physical integration opportunities to the nth level in the e-sport tournaments. The gaming world has everything to offer and possibilities are just growing,” he says.

According to experts, the ball is now firmly in the court of advertisers. Brands from a wide cross-section of categories including, but not limited to, e-commerce, education, food, BFSI, consumer technology, automobiles, telecom, FMCG & many more tapping in and constantly engaging with gamers. “So, if your audience is here and you are not then you are already late,” quips Aditya Pandit.

According to Harikrishnan Pillai, CEO and Co-founder, TheSmallBigIdea, the growing cultural impact of gaming and esports, with massive reach, frequency, and interactivity as driving pillars, is a display advertising opportunity for brands. “It is also the ‘massier’ advertising option for brands. eSports is also evolving as a new avenue of entertainment in India. Advertising on this platform is a brand-building exercise for brands that is much more immersive and long-term. With the ever-evolving innovations and technology, gaming and esports are further poised for bigger and better opportunities,” he says.

Rajan Navani, Founder and CEO, JetSynthesys, points out that indeed, internationally, gaming and esports already enjoy interest from some of the biggest brands across sectors – Red Bull, Pepsi, Intel, Monster, MTV, etc., with that culture now seeping into India

“I believe, with the growth the sector has seen lately, it is just a matter of time that the roster of big brands expands even further. According to a recent report, gaming witnessed a 32 per cent YoY growth in average spending by advertisers. This in itself shows how the advertisers are noticing the ever expanding and diverse audience gaming companies potentially reach,” says Navani, adding, “The amount of ground the sector has covered in the last three years is much higher than what we witnessed in the last decade and it is only set to go higher.”

Event(s) Horizon

Another big driver is going to be the official recognition of esports by the union government as part of “multisport events” on the eve of 2023, meaning the previous dissonance that existed in the perception of esports and gaming is now much clearer, thereby attracting more advertisers. The inclusion of India in various international prestige sporting tournaments will only spur this on.

According to Lokesh Suji, Director, Esports Federation of India & Vice President of the Asian Esports Federation (AESF), we will be seeing a lot more physical LAN tournaments in 2023 being conducted on a large scale across various esports titles. “Since clarity is now slowly being established regarding the differences between esports (which is a sport) and iGaming (fantasy, fantasy, teen patti, rummy, poker, online gaming, gambling, betting etc), we can hopefully expect to see esports finally be considered as any other sport in our country. It’s time that our esports community presents a unified voice to make India the next esports hub,” he enthuses.

Animesh Agarwal, Founder & CEO, 8bit Creatives, adds that this is a positive development in the lead-up to the Paris Olympics in 2024, and will help the IOC’s attempt to push esports in the right direction. “In addition to this, we have witnessed an increase in large sponsorships from non-endemic brands seeking to capitalise on the esports industry. In order to interact with their key demographic – GenZ and Millennials, gaming influencers have become their go-to source.”

Gamers have a target demographic that is very digitally savvy and fiercely loyal. Combining this highly engaged fanbase with their capacity to curate intriguing material and not just conduct brand plugs will make gamers the most sought-after influencers in 2023.

“Last but not least, in-game trade, monetization, and transactions via blockchain and play-to-earn games, which have captured the attention of Indian gamers across all demographics, will also play a major role in the industry’s rapid expansion next year,” adds Agarwal.

Ready Players

Piyush Kumar, Co-founder and CEO, Rooter, believes that the gaming consumer today is a unique one, who not only heavily engages with the games he plays but also buys into the whole experience surrounding it – sharing and creating content with fellow gamers, watching streams, experiments with the latest trends and tends to have a higher propensity to spend on new categories, products and, experiences.

“They are often the chief ‘purchase influencers’ in their family/friend circle as well. All this already makes them an ideal audience for brands to build awareness and drive product usage/experience, eventually building up to sales. More and more endemic and non-endemic brands, who wish to engage with highly-engaged 18-35-year-olds are already seeing the benefits of focusing on gaming platforms,” he says.

Looking ahead to 2023, Anirudh Pandita, Founder, Loco, also expects brands, advertisers, and publishers to invest heavily in advertising through inventory buys as well as content and community initiatives. “Whether it was the movement of advertisers from radio to television and then from existing mediums to digital mediums, advertisers always follow audiences/ attention minutes. The same holds true for gaming, he says.

“Now that there are over 400mm gamers in India with 150mm+ engaging with esports content, esports and gaming become a critical communication channel for advertisers to reach audiences and have a meaningful conversation with them. The engagement level of users on these platforms acts as an additional driver,” says Pandita.

Kumar elaborates, “In the past few quarters, we’ve seen close to 100 brands engage with the Rooter platform through a host of formats like display/in-video advertising, influencer marketing, performance marketing, and sponsorships. Some of our brand partners include: H&M, Airtel, McDonalds, TVS, Flipkart, Spotify, Intel, ACT, HP, Amazon, Shopsy, Moj, BYJU’s, Unacademy, Prime Video, Mivi, Infinix, Wings, ICICI, Vodafone, Logitech and Philips. On our part, we are focusing on educating more brand partners about the benefits of investing in gaming and esports,” he says.

Pandita says, Loco has 55mm+ registered users and live stream watchers are spending over 60 minutes every day on the platform. “With such engagement available at scale, the offering becomes highly attractive for advertisers. This will only improve further with catalysts like 5G that will accelerate the consumer behaviour of adoption of games as a mainstream entertainment platform.”

Tech-In

Speaking of 5G, there is also a surfeit of new technologies, including usual suspects like the metaverse and NFTs to newer kids on the block like Web 3.0, all of which are going to be employed in gaming. While the old joke was that all new technology is first co-opted by hospitality and adult entertainment, gaming has clearly become the third player in this tech embrace.

Rohit Agarwal, Founder and Director, Alpha Zegus, a marketing agency specializing in the domains of gaming and lifestyle, says “More Web3 / Metaverse-related innovations in the gaming ecosystem will enable a newer form of gaming experience and competitive gaming, while the adoption of 5G would accelerate the mobile gaming industry.”

“An increase in the number of games and users calls for a robust variety of segments, campaign types, creatives, in-app events, and, most importantly, the user experience. Therefore, big data analysis that aims to optimize performance is a significant challenge. Gaming app marketers must deal with this challenge by using external tools or developing in-house solutions to deliver on their KPIs,” says Ritu Sharma, Country Manager, AppsFlyer India,

 “On the other hand, as consumer privacy continues to come into active play, data usage limitations will start to become a normal phenomenon as it gets introduced on other platforms. First-party data collection has become a highly strategic mission, and this trajectory will continue to pick up speed in the years to come. Marketers must find innovative ways to market, measure, and optimize their activities while finding alternatives for user-level data. To do so, they need to consider metrics like overall cost per install and reinstall or return on ad spend (ROAS),” she adds.

Pandita concludes, that combining all these factors with the fact that there will likely be additional integration with traditional sports entities/authorities, “We can expect to see increased commercialization of the industry with bigger events, larger prize pools, and even stronger audience interest, which will help draw even more advertisers!”

 

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