Transforming the Marketing Landscape through Esports

A Study on In-game Advertising used by Brands

Dr.Reena Shyam

Director, IA School of Management Studies

Director@ iasms.edu.in

&

Prof.Shivashankarachar

IA School of Management Studies

[email protected]
Transforming the Marketing Landscape through Esports
A Study on In-game Advertising Used by Brands

Abstract
In India, with the rise in the community of players indulging in esports, more and
more marketers are trying to explore the avenues of in-game advertising to attract
the desired target segment. This research paper attempts to determine how often
respondents engage in in-game advertising. Furthermore, the study analyses
whether users perceive advertising products through in-game marketing as
effective and tries to determine whether in-game advertising encourages
respondents to purchase the advertised product/brand.

Design/Methodology/Approach – This study uses both secondary and primary

sources of information and is descriptive research. The population for this study is
customers who engage in online gaming. The method of collecting data used for
the research is purposive sampling. The primary data is collected through a
questionnaire circulated among a sample of 100 respondents. Likert scales have
been used to provide more choices to customers in selecting their answer and
enable the research to gather more accurate

Implications/Findings – The study shows that most users think that in-game
marketing is an effective method in digital games. In a rapidly growing market, in-
game advertising, gaming audiences are largely untapped and provide an
opportunity for advertisers to expand their reach and engage with their consumer
base.

Keywords – Marketing, Esports marketing, In-game advertising, purchase

decision.
Introduction
Over the years the way in which products are marketed has changed drastically,
especially with the rise in technology and changing consumer buying behaviour.
The traditional ways of marketing products such as purchasing ad spaces in
newspapers and magazines, placing signboards in strategic locations and sales
executives attempting door to door sales, may not seem as relevant in today’s
market. Technology has changed the way businesses target customers and market
their products to ensure market reach and sustain market share. As customers
spend more time on their tablets, mobiles and laptops, the challenges facing
brands is to explore means to connect with customers by creating campaigns that
work across various technology platforms. As smartphones get better, inserting
brands and advertising in online gaming has become a new way by which
marketers try to reach and capture their audience.

Esports and its Rise

Esports” is defined as “a specific subset of online gaming with a focus on the
competition between human players – both amateurs and professionals – in a
video or computer game with predefined rules”. (https://www.mckinsey.com, 2020)

In recent years these games have evolved into virtual tournaments and leagues of
mainstream sports like cricket, football, etc. Sports has gained popularity in recent
years with a surge in its consumer base. Table-1 exhibits the growth of Esports
audience. According to the Global Esports & Live Streaming Market Report , 2022
the esports enthusiast group will account for just above 261 million and the
remaining 271 million will be accounted by Occasional Viewers. The study
forecasts the growth of esports audience by +8.7% each year and the total
audience will surpass 640 million by 2025.
Source : (Global Esports & Live Streaming Market Report , 2022)

The year 2022 has been very significant for gaming and esports enthusiasts globally. With

esports’ growing prominence, in terms of popularity and participation, particularly

amongst young people the world witnessed the first-ever Commonwealth Esports
Championship in Birmingham.

The Indian DOTA 2 team won the bronze medal for their power packed performance in
the esports Commonwealth. Keeping pace with this trend of recognizing Esports in the
international games’ platform, the upcoming Asian Games is gearing to host Esports as
a recognized medal event. Something unimaginable a few years ago.

The gaming industry has also witnessed some of the biggest acquisitions this year
This year, we have also seen some of the biggest acquisitions in the gaming and
esports industry – In January 2022, Microsoft made a significant splash, shaking the
gaming world to its core by acquiring Activision Blizzard ATVI for a whopping $68.7
billion. It was a massive deal that caught extensive attention, as it ranks as the largest
acquisition in the video game industry’s history.
Another significant move in the world of gaming is by Savvy Gaming Group. Backed by
the Saudi Arabian government’s Public Investment Fund, Savvy Gaming has acquired
two of the biggest names in the world of esports tournament operators – ESL and
FACEIT, for a combined sum of $1.5 Billion. The company aims to merge the two
giants to create a new global leader in competitive gaming – the ESL FACEIT
group. These strategic moves are a testimony to the huge growth potential and rapid
growth of the gaming industry.

Catalyst for the growth of Esports

The pandemic

While the lockdown had a repressing effect on the global economy with several sectors
grappling to stay afloat, it turned out to be a blessing in disguise for those engaged in
the esports sector. With a ban on most outdoor activities, consumers diverted their
attention to esports for recreation especially young digital natives who are an important
target audience for several marketers.

Increasing digitization and deeper penetration of Internet connectivity

According to the survey done by The Worldwide Mobile Data Pricing 2022, India is
placed in the fifth position among countries with the cheapest mobile data across the
world. The list, compiled by Cable.co.uk, analysed data from 5,292 mobile data plans
from 233 countries. Accessing internet connectivity is affordable and hence has a
larger reach among consumers residing both in urban and rural areas which is
expected to strengthen with the advent of 5G. In addition to this the availability of
affordable and user-friendly smart phones contribute to the reason why esports is
becoming a popular engagement among the Indian audience.

The Indian Esports ecosystem is largely dominated by mobile-centric games. Buying a

mobile phone for an affordable starting price, coupled with great gaming experience
has aided gamers to burst onto the gaming scene easily. Thereafter the immense
exposure made possible due to easy and affordable access to the internet has seen
more and more people turn towards Esports in the country.

Influx of international game developers in the Indian market

With the gaming market in India growing at a rapid pace, more and more international
game developers are starting to take notice. Companies that have invested in India’s
esports industry include Fnatic & Loco – Fnatic signed a long-term partnership with
Indian live streaming platform Loco, owned by Pocket Aces. to create unique esports
content, including tournaments, live streams, and more. Paytm First Games & Riot
Games – Paytm First Games, the Indian digital gaming platform, signed a partnership
with Riot Games, an American video game developer, publisher, and esports
tournament organizer, to host a Teamfight Tactics tournament for the region. Nodwin
Gaming and Bharti Airtel have announced a partnership to grow esports in India. In
addition to global companies eyeing the gaming market in India, the sector has
witnessed the growth of 76 online Indian gaming start-ups since the onset of the
pandemic, taking the total number to well over 400 gaming companies. The rise in
gaming innovation has led to the emergence of innumerable employment opportunities
as well.

Over the last couple of years, we have also witnessed a sharp increase in the number
of gamers from Tier-2 and Tier-3 cities in India, especially mobile gaming. Thanks to
mobile-based platforms, access to skill-based games and tournaments have become
easier. A large part of these recreational gamers are women who picked up the hobby
during the lockdown and continued to play even when normalcy returned.

Esports and its Usage in the Marketing Landscape

Brand Collaboration:

The ever-increasing number of Esports enthusiasts especially in India has created a

lucrative marketing opportunity for endemic as well as non-endemic brands to
capitalize on.

Advertising, sponsorships, selling their merchandise, and franchising via Esports

Teams have brought in a lot of revenue for brands, which will only amplify. The EY
report tells us that as many as 72 brands have invested in this industry in 2021
compared to the 42 brands in 2020 and this number will reach 100 brands in 2022 as
per the industry estimations.
The focus of brands hasn’t been limited to just games or tournaments though as they
are also investing heavily in content creators, an integral extension of the Esports
community. The fan following of a content creator is age agnostic and the creator-
audience relationship in this context is very strong and equally engaging. This effective
connection allows creators to be very influential among their diverse set of viewers and
they can sway them towards their products.

Endemic brands have frequently collaborated with creators to promote various tech
products. Live streaming platform, Facebook Gaming committed $2 billion to support
content creators while others have grown immensely due to the popularity of their
creators.

Successful experiments with Esports marketing

Beverage brands such as Red Bull, Mountain Dew, and Coca-Cola have sponsored
many esports events as well as teams in India and globally, banking on the common
theme of adventure and energized gaming experience. Plus, the target audience for
these beverages typically matches the esports players or viewers, which gives them a
good audience fit for esports branding.

Luxury auto brands such as BMW and Mercedes Benz have also made an entry into
space — Mercedes is the sponsor of the India ESL Gaming esports circuit. Both these
brands are looking for engagement from esports viewers and players, banking on on-
brand messaging that’s geared around innovation, high performance, and a premium
experience.

Objectives of this Research:

1. To determine how respondents, engage in in-game adverting

2. To analyze whether users perceive advertising products through in-game
marketing as effective.

3. To determine whether in-game advertising encourages respondents to purchase

the advertised product/brand.
 Methodology
The population for this research is customers who engage in online gaming. The
method of collecting data used for the research is purposive sampling. The primary
data is collected through questionnaire circulated among a sample of 100 respondents.
Likert scales has been used to provide more choices to customers in selecting their
answer and enable the research to gather more accurate answers.

Findings and Discussion

Majority of the respondents fall into the category of 18 to 24 years. The survey drew
responses from Part-time employed, Full employed and unemployed and student
category. 56.5% of the respondents mentioned they game for less than an hour, 33.3
spend between 1 to 3 hours in gaming and 10% more than 3 hours in a day

63% of the respondents have been in gaming for 0 to 5years. Among the games that
are rated as most popular by respondents, Pug G, Fortnite, Battlefield were major
preferences.91% of the respondents indulge in gaming on their mobile phone. Only
40% of the respondents have experienced in-game advertising. While brands appeal to
the gamers online through in game of advertising,39.7% have viewed Red Bull, 38.2 %
have viewed Coca Cola and the remaining 22.1% have viewed Mountain dew ads. In
order to determine how gamers, perceive in- game advertising, certain statements
were provided to respondents to gauge their level of agreement or disagreement for
the same. 62% of the respondents strongly agreed that in-game advertising is a clever
way of marketing and the advertisements that they view keep running through your
mind after they have seen them.

The following hypothesis is framed to determine the influence of in-game advertising on

the purchase of the product/brand.

H0: There is no In-game advertising influence on respondent purchase of product/

brand.
H1: In-game advertising influences respondent purchase of product/ brand.

Variables Agree Strongly Neutral Disagree Strongly Total

Agree disagree
 Yes 25 7 2 3 1 38
No 28 3 26 5 0 62
Total 53 10 28 8 1 100

Chi-Square Test:
2 2
x =∑ ( O−E ) / E

2
x calculated value=19.182

2
x table value(5 % , 4)=9.488
2 2
x calculated value> x table value

Therefore, the H0 is rejected and the alternate hypothesis that there is an In-game
advertising influences respondent purchase of product/ brand is accepted.

The results of the study reveal that in- game adverting is considered by gamers in
actual product purchase situations. The target segment for online gaming exhibit
defined attributes such as age group, occupational status and number of hours spent
on gaming activity. Positioning products and brands that appeal to specific target
segments is a tremendous opportunity to marketers.

Conclusion and future research

In the coming years with evolving space, in-game advertising will become an attractive
method used by marketers to reach out to the growing online community. With high
tendency of consumers skipping advertisements in traditional advertising platforms,
online gamers display more receptivity to in-game advertisements resulting in
influencing their choice of brand of soft drink that were selected for the study. Since
gaming audiences are yet to be fully tapped by marketers, this would be a monumental
opportunity to attract customer attention and develop brand preferences. Future
research could delve into aspects such as brand recall and retention for a wide range
of products that cater to the needs of the growing online gaming community.
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