What do Mastercard, KFC, Head & Shoulders, Universal Music, Snickers and the U.S. Airforce have in common? Other than being globally recognised companies/brands/organisations, these are just a few of the most recent non-endemic sponsors to enter the esports industry. What is a 'non-endemic' and why are they important?
A 'non-endemic' sponsor is one that operates outside of the industry they are sponsoring. In recent years, there has been explosive growth in the number of non-endemic sponsors in esports, with recent examples being Red Bull, Mercedes Benz, DHL and Gillette.Such sponsorship can appear in many forms with varying degrees of success (more on that below), but they are all used as a way to associate the brand/product with the chosen industry - usually to raise general awareness and expand market reach. For example, KFC's logo will be added to the jersey of the esports team it is sponsoring and themed toys will be added to its meals in China, whereas Mastercard will be adding League of Legends based rewards to its Priceless Rewards Programme (amongst other things).
Why are they important?
It's because esports is dominated by a sponsorship based revenue model - at least for now. Until the various debates on how to monetise esports and esports fans takes a concrete step away from relying on sponsorship revenue, non-endemics will be crucial to growing the industry. As the buzz around esports grows (and rightly so) more and more large non-endemics are looking for an opportunity to get a piece of the esports pie. For the larger non-endemics this usually involves, amongst other things, a large cash injection - the partnership between Mastercard and Riot Games for the League of Legends World Championship this year is rumoured to be the largest sponsorship deal that Riot Games has ever entered into. What does it take to be a successful non-endemic sponsor?This is a hot topic in the area of esports sponsorships. What does it take for a non-endemic sponsor to be successful and see a real ROI (return on investment). The answer is not a simple one. The esports and wider videogames industry is often regarded as being difficult to penetrate by 'outsiders'. To some extent, this is true - one poor campaign and your company/brand might find itself being mocked all over Reddit, Twitter and every other corner of the internet. That said, doing it right grants access to a somewhat 'exclusive' market, but more importantly one whose consumers (mainly young adults) have real spending power.
If I had to give one piece of advice, from the perspective of an esports fan and consumer of sponsored content, it is to think of a creative or intuitive way to integrate your company or brand. Paying a sum of money to slap your logo onto the broadcast or livestream is fine and in some cases it may even achieve the desired ROI but the really successful non-endemics often take a more thoughtful and unique approach. Case study: Mercedes Benz An excellent mini case study is Mercedes Benz and their multi-faceted approach when they became the headline sponsor of ESL One Hamburg 2017. They provided custom Mercedes Benz vehicles to each team with their logo and team colours on it, which the players travelled to and from the venue in. The prize for the tournament MVP was a Mercedes Benz car. They assisted in the creation of a custom Mercedes themed overlay for the broadcast and livestream. They even integrated esports into their 'Grow Up' advertising campaign (you can watch the advert here - https://www.youtube.com/watch?v=X5Z4doe1x2g). By the end of the event, Mercedes was trending atop the Dota2 subreddit - one of the largest, most active and difficult-to-penetrate subreddits on the internet and the campaign was hailed as a resounding success.
As long as sponsorship revenue drives the industry, the non-endemic sponsorship space is only going to expand further. Whether or not new companies/brands will find success depends entirely on their openness to embracing a new and modern culture and integrating themselves into that culture in a creative, unique way that appeals to the esports fandom. I am incredibly excited to see who the next big non-endemic will be, whether they'll find success and how this area will develop in the months and years to come.
"Riot Games signed what may be its biggest sponsorship deal ever. The developer has entered into a multi-year partnership with Mastercard, which includes activations surrounding the biggest League of Legends esports events each year. KFC's deal with Chinese organization Royal Never Give Up (RNG) includes logo placement on jerseys, logo integration in the team’s Beijing arena, and RNG-themed toys and meals at locations in China. Universal Music partnered with ESL to create a joint music label, and with Luminosity Gaming for a series of content activations.
Snickers renewed its deal with the Rocket League Championship Series. The U.S. Air Force became a jersey sponsor of Cloud9 and expanded its deal with ELEAGUE. Head & Shoulders signed a Dota 2 pro as its first esports brand ambassador. jersey sponsorship deal with Team Vitality"
Gambling, Food, and Mastercard: Non-Endemic Sponsor Recap for Q3 2018
The content above was originally posted on CMS DigitalBytes - CMS lawyers sharing comment and commentary on all things tech.