With 2.9 billion gamers worldwide, the global gaming industry is massive, generating revenue of $177.8 billion in 2020, which is an over 23% increase compared to the year prior, according to estimates by Newzoo. And the pandemic only amplified the trend as homebound gamers played more. Brands have increasingly followed, despite some having limited gaming knowledge or expertise. Enter ad agencies, which aim to bridge that gap for clients. But just like not every gamer is built the same, not every agency’s business model around the industry is identical.

Holding companies like Publicis Groupe have their own dedicated gaming and esports offering within their larger sports and entertainment division, while other shops within agencies, like Omnicom’s DDB, have developed their own dedicated gaming and esports practices. Other agencies are solely dedicated to the gaming space and esports and on the other end of the spectrum, there are esports organizations creating their own agencies dedicated to marketing for clients looking to enter the esports market.

Earlier this year Publicis Groupe launched Publicis Play in the U.K., a specialized gaming and esports offering for non-endemic clients that resides within the company’s broader Publicis Sport & Entertainment division. Having a gaming offering as part of an agency network brings an advantage for its brands, says Jeff Garrant, U.S. group lead and senior VP of Publicis Sport & Entertainment.

“We live in a world where our brands are looking to do more than just gaming,” Garrant says. “To have that broader perspective of what they're doing and what their objectives are in general, helps us bring more of an integrated effort as it relates to the gaming space. We can make sure that it ties within the overall marketing initiatives of the brand.” 

Last year, PSE in Australia hosted a branded livestream for Dare Iced Coffee on Twitch featuring professional athletes from Australian soccer team St Kilda Saints and leading gaming influencer LoserFruit. The execution included digital, promotion, and social tactics and promotion, as well as a “Fortnite Lockdown-Showdown,” where fans were treated to a Q&A with the players and were able to play against the soccer players and LoserFruit in Fortnite.

Even though PSE already had been working in the space for over five years, it was important for the company to have a dedicated gaming proposition that advertisers could gravitate to for specific needs in the space, the company says. The team is composed of 10 specialists from Publicis.Poke, Publicis Sport & Entertainment, and Spark Foundry.

“Even before the pandemic we'd already started seeing the questions that were coming in [from brands] were not generally about sports and entertainment platforms, which is the broader piece that we work in, but they were coming specifically around gaming and esports,” Ben Cronin, global head of Publicis Sport & Entertainment. “We came to the decision in the U.K. that there was enough this interest to require its own standalone access point to us as an agency.”

The pandemic also accelerated the trend as homebound consumers sought out gameplay and marketers took notice.  According to a report by now-defunct Nielsen research company, SuperData, early in 2020 (January and February), before COVID-19 effects were truly felt in the U.S. game spending was up 6%. As the year progressed, game spending nearly doubled, rising to 14% for the rest of the year. 

Newzoo found that 51% of gamers in Western Europe and North America reported spending more time playing games since COVID-19 began.

“The pandemic raised the consciousness of gaming within some of our marketing clients and brought perhaps a realization that this audience is mainstream,” Cronin says. “There are a lot of segments in it. There is a legitimacy to advertising and using the platform of gaming and esports to reach those audiences.”

Brands are showing more interest in dynamic in-game ads, which are ads placed within a game like a billboard or on a character’s shirt. Burger King, for example, won a Grand Prix in the Direct category at this week’s Cannes Lions for real-life sponsorship of a little-known British soccer club with the express purpose of getting its brand (and uniforms with its logo) in the game FIFA 2020.

However, brands shouldn’t think of entering the space as simply plugging sponsorships in a game and calling it a day, even though that can be part of an overall strategy. To be successful in the gaming community brands must focus on bringing authentic experiences to the audience that don’t distract from the game itself.  

Case in point: VMLY&R teaming with Wendy’s in 2019 for its “Keeping Fortnite Fresh'' campaign which saw an avatar that bore a striking resemblance to the fast feeder’s namesake obliterating all the freezers in the popular battle royale-style video game. The point was to illustrate the brand’s “Always fresh, never frozen” mantra in a way that would score in the hearts of the gaming set. 

The idea grew into “Super Wendy’s World” where the Wendy avatar infiltrated other gaming titles such as “Street Fighter,” “Super Smash Brothers,” “Animal Crossing,” and “Minecraft,” while streaming the content weekly on its own Twitch channel. Lifestyle brands have also been involved in gaming as of late. In May, Gucci unveiled a virtual exhibition of rare clothing collectibles that gamers could acquire for their avatars within popular online-game Roblox.

“Brands are finally starting to understand that the way to work within the gaming community is to work within the gamer culture rather than at the gamer culture,” says Rob Davis, head of digital in the U.S. for WPP’s Ogilvy. Davis is part of Ogilvy’s gaming team, which resides within its sports marketing arm and was formed three years ago. “It’s up to the brand, agency, and game publisher to work together and figure out what integration makes the most sense.”

Instead of building a team within a larger network, DDB created its own practice altogether. In November, DDB launched a specialized gaming and esports division called DDB FTW with an office in Prague. In April it was reported FTW has plans to expand its network with more than 20 offices by this summer after already opening outposts in Latin America (Mexico, Guatemala, Peru, Brazil and Argentina), EMEA (Germany, Sweden, France, Italy and Czech Republic) and the Asia-Pacific (Russia, Hong Kong and China).

According to FTW’s founder, Darko Silajdžić, it was necessary for the young agency to work independently from other DDB divisions in order to build an agency with true knowledge of the esports and gaming scene. 

“Gaming industry knowledge is specific and not something that you would find at your everyday agency environment,” Silajdžić says. “That’s why when we get contacted by a gaming client or prospective client, we've often gotten this quite big surprise on their side. It's like, ‘Hey, finally there's somebody in a big agency who gets us.’”

Expect to see more coming from FTW, which has been focusing on laying the groundwork for success like forming a global partnership with ESL, the world’s largest esports company, and is working with Wargaming.net, the makers of online multiplayer game “World of Tanks,” to help with its upcoming AAA mobile game. An AAA mobile game is a top-quality game with big budgets on the development and marketing side. 

Big agencies recently entering the space are competing with the likes of seven-year-old Tripleclix, a gaming-focused agency with a client roster of both endemic and non-endemic brands.

TripleClix founder Chris Erb previously worked for Wizards of the Coast where he ran the Pokemon and Dungeons and Dragons portfolio. He moved on to work for EA focused on the Madden game franchise and eventually ran the global EA sports brand. While there a decade ago, he had to convince Frito-Lay’s Doritos to work on a promotion that would allow fans of the cheesy chips brand to pick the next cover of Madden at the time. “With Doritos, when I did the cover, people were like, ‘Wait, why is Doritos doing the cover vote of Madden in 2010?’” Erb says. “And now, gamers are like, ‘Oh, of course, Doritos is doing a Cyberpunk program. That totally makes sense.’

Since then, Doritos has come far. Late last year Tripleclix helped the brand run a promotion with its client Xbox as part of the launch of the highly anticipated video game, Cyberpunk 2077. As part of the promotion, 77 limited edition futuristic Doritos packages of 3D Doritos were given to influencers, and they shared the experience of playing the game and tasting the chips with their fans.

“If you look at brands coming into gaming, I look at it as a marathon. You're not going to be endemic and you're not going to have the gamers' love after one promotion. But if you continue to add to the culture and give back to the gamers and make their experiences better, eventually that's going to start to mean something to them and they'll become endemic to your brand,” Erb says.

Tripleclix  is the gaming agency-of-record for brands like Swarovski, StockX, Hot Pockets, and Kellogg’s, acting as a liaison between gaming and non-gaming brands. As a result, TripleClix helps create promotional giveaways, promotions with free downloadable content for games, or even limited-edition products. 

An example of this is when the agency helped facilitate the relationship between its client Xbox and Taco Bell for a promotion to give away a limited-edition Xbox One X that makes the brand’s iconic “dong” noise when you turn it on. Tripleclix brainstormed and negotiated the partnership between the two brands on behalf of Xbox, helping oversee the overall giveaway, while Deutsch LA, Taco Bell’s agency, managed the ad creative from concept through execution. 

It’s common for the gaming agency to work with other agencies, like Wieden + Kennedy for its Trolli account, where the brand brought in TripleClix as a partner. 

As may be expected, TripleClix says big agencies are latecomers less attuned to the market.

“The big agencies just aren’t going to be as endemic as a company like us,” Erb says. “And we’re a small agency [12 employees in total]. We’re not going to take your media, creative, or social business, we focus solely on gaming, that’s why we work well with other agencies. When we work on Trolli or Nerds, we’re working with all their other agencies, we’re just overseeing and executing a gaming strategy from designing packaging to securing IP [intellectual property] and other things like that.”

Not to be confused with gaming, esports, while still small compared to the gaming market, has been growing with the industry and is expected to surpass the billion-dollar mark for this first time in 2021, according to a report by Newzoo. Esports has the most growth potential, but brands shouldn’t rush into the space without a plan, says Rob Twiddy, VP of esports and gaming at marketing agency Rogers & Cowan PMK, which is part of the larger Octagon Sports and Entertainment Network.

“The biggest misconception is that esports will be impactful from day one,” Twiddy says. “By dipping your toe in the water, you're not going to see the ROI. We always preach what is the 3-to-5-year plan. At that point, you will start to see the impact and the justification of why you entered the space. If you’re looking to be opportunistic and jump in and do something short-term, you’re going to be misled by the results. You need to ingrain yourself in the community.”  

R&CPMK helped construct Mastercard’s first global esports partnership with Riot Games, which is the developer of the most-watched esports game in the world, League of Legends. Since the beginning of the partnership in 2018, the agency says it developed a 360-degree marketing plan each year including digital experiences, broadcast integration, opening ceremony sponsorships, on-site production and execution across the largest events in League of Legends esports such as Mid-Season Invitational, Worlds, and its All-Star event.  

The agency also helped Cisco take its first step into esports by assisting the partnership between the tech company and League of Legends. Through the partnership, Cisco now powers League of Legends’ pro gameplay and its remote broadcasting capabilities.

Just like any growing industry, new challengers will arise. In May, Misfits Gaming Group, a global esports and entertainment company partially owned by the Miami Heat, Orlando Magic, and Haslam Sports Group (Owners of the Cleveland Browns and Columbus SC), launched a media and influencer agency called Misfits Agency, which is solely devoted to the esports and gaming audience and the brands that are vying to access it. 

The gaming group is already an established esports mainstay with three teams constantly competing in some of the most popular leagues worldwide (Riot Games’ League of Legends European Championship, Activision-Blizzard’s Overwatch League, and Activision-Blizzard’s Call of Duty League). To start, the new agency will be working on content and campaigns with clients like Sofi and Hasbro. Misfits will help Sofi work on a yearly content slate, focusing on targeting the gaming community and its fans. As for Hasbro, the agency is tasked with creating and producing a content campaign starring influencers like Sushibae, Pack a Puncher, and Sceptic.

"If you're in the media and advertising world and you're not aware of the reach and the power of the esports/gaming engine, you are behind,” Amy Palmer, president of the Misfits Agency says. “We go where our audience lives and create content for partners and brands with an authentic voice. Starting an agency within an esports organization is the only way to organically and authentically speak to this audience—if you go outside this ecosystem, traditional agencies are not immersed or schooled in the way this generation consumes content or interacts with brands. We are part of the gaming world, and by creating our own agency that speaks and resonates with our players and fans, we are able to drive impact and messaging that's unparalleled."