BMW’s competitors have also ramped up their esports presence in recent weeks. At the beginning of April, Subaru partnered with sim racing platform iRacing to sponsor a racing championship. Nissan has doubled up on sponsored content with esports partner FaZe Clan, which is part esports company, part media agency and part influencer agency. Ford, meanwhile, has called on gamers to design a new virtual car.
The fact that big-spending auto brands are still moving forward with esports campaigns is notable. While the category has been early to advertise and sponsor in the esports space, during this time, auto brands have still seen their sales tank and their marketing plans disrupted from canceled sporting events. The pandemic ended an estimated 120,000 sports and entertainment sponsorship agreements totaling $10 billion, according to consulting firm IEG.
Brands across categories are also continuing with their esports plans. This week, Zenni Optical announced it would renew its sponsorship of Golden Guardians—the League of Legends esports affiliate of the Golden State Warriors NBA team—and took on additional partnerships with Pittsburgh Knights and Houston Outlaws. And rather than cancel its second annual Challenger Series gaming tournament, Chipotle will stream the event on Twitch and YouTube on April 25, with half of the $50,000 prize money going to COVID-19 relief efforts.
Some marketers have decided that, with live sports off the agenda indefinitely, now is the time to break into esports. Maisie Antoniello, VP of marketing at Jones Soda, says the beverage brand had to pivot from a skateboarding marketing push ahead of the postponed Olympics and chose to instead to sponsor Torque Esports’ five-week All-Star Esports Battle on YouTube and Twitch, which aired via ESPN and CNBC International. The event was put together in 48 hours after the coronavirus forced the cancellation of the FIA Formula 1 World Championship in Australia. “It became clear we would have to pivot,” says Antoniello, who notes that the videos are seeing millions of views.
Esports companies say that since the pandemic began, demand for their advertising services and livestreams has only increased.
Jeff Pabst, chief revenue officer at FaZe Clan, says the company hasn’t lost a single client since the pandemic began, but has gained five new ones, which it plans to announce in the coming weeks.
“Ad spend always follows consumption. In the case of gaming, ad spend is three to five years behind. COVID changed that really quickly,” says Pabst. “With the void of live sports and popularity of Twitch right now, brands are trying to figure out how to get involved in this groundswell that’s taking place and this audience migration. I hate to say that anyone is benefiting, but on our end, we’ve seen Fortune 100, Fortune 50 brands come to us.”
FaZe Clan, which operates the “Faze House” for its influencer gamers, already works with Nissan, G-Fuel and SteelSeries, and Pabst says those brands have approached the agency to do more social content and livestreaming events during this time. Since the quarantine began, Pabst says FaZe Clan has released 10 original videos for Nissan, the company’s exclusive automotive partner, featuring its gamers. The company is also working with Verizon to program weekly gaming livestreams for its #payitforwardLIVE initiative that supports small businesses.
To raise money for COVID-19 relief funds in April, FaZe Clan created a weekly online tournament around the new game “Call of Duty: Warzone.” The #Fight2Fund livestreams paired FaZe Clan gamers with musicians like Marshmello, Diplo and pro-athletes like Paul George and Ben Simmons. It raised $125,000 for charities affected by COVID-19, and featured brand partners Trojan, Activision, Softgiving, SteelSeries and UMG Gaming. Each livestream pulled in up to 60,000 concurrents and around 3 million views.
He says brands have been mostly coming to the agency to pull together livestream programs. “We have a sponsorship where you own a category and that’s usually the traditional sports marketers: The Nissan’s, the G-Fuels and Steel Series of the world,” says Pabst. Typically, those are seven-figure deals.
FaZe Clan’s now has over 215 million followers across its social and gaming platforms, and on Thursday, it closed a $40 million series A funding round to support expansion, player acquisitions and operations. Investors include rapper Pitbull, professional skateboarder Nyjah Huston and Epic Records Chair and CEO Sylvia Rhone.
G2 Sports, an esport partner to BMW, Red Bull, Logitech, Philips and Mastercard, is also seeing more brand interest since the onset of the pandemic.
“Our sponsorship pipeline of brands has doubled in size in the last few weeks,” says Carlos Rodriguez, CEO and founder of G2 Sports. “Everything we see across the board is marketing budgets shifting to digital.”
Of course, the coronavirus pandemic has also affected the business models of esports companies, and they’ve had to make their own compensations in dealing with the pandemic. Many esports companies run live, in-person tournaments and have had to take those events solely online. Still, unlike live sporting organizations, the esports category is well-equipped to make the migration. Even with the loss of live ticket sales for tournaments, esports companies say they are on track to reach their revenue marks.
Lester Chen, head of gaming content and partnerships at YouTube America, says COVID-19 has impacted esports leagues less than traditional sports. “We have seen esports leagues on YouTube rebound and continue streaming and uploading content in short order,” he says. Although he wouldn’t reveal specific numbers of viewers or new advertisers, Chen says gaming viewership is up, with more than 200 million users watching it daily.
Faze Clan’s YouTube channel, for instance, with 7.6 million subscribers, has seen a 300 percent increase in viewership since the beginning of March, says Pabst.
Chen also points to the fact that many traditional sports have turned to esports to try to replicate their events on the platform. The NBA launched a Players Tournament vbia the game NBA2K, featuring players like Kevin Durant; Formula1 moved their races to racing simulator machines within the Formula1 Game; and FIFA organized digital events with professional soccer players playing EA’s FIFA 20 game.