Month: May 2022

In past years, brands have invested heavily in partnerships with esports organizations to reach gamers. These collaborations have been mutually beneficial, generating promising engagement for the brands and multi-million-dollar bonanzas for the organizations. But as brands bring their gaming departments in-house and become more sophisticated in operating in the space, they’ve upped their demands for general gaming content, and organizations have adapted in kind.

What is the difference between gaming and esports?

In the plainest possible language, esports is just another way to refer to competitive gaming with prize money on the line. Experienced industry operators largely associate the term with the franchised esports leagues run by game developers such as Activision Blizzard and Riot Games, but smaller or growing esports such as fighting games are a notable element of the ecosystem as well.

“When we talk about esports and gaming, we try to delineate between esports being competitive titles run by one of the large game developers, with a set schedule, system and potentially franchising mode,” said Jordan Sherman, CEO of the esports organization Immortals. “But you don’t necessarily need the franchising; for example, Valorant doesn’t have franchising, but we consider that an esports, because it’s made by Riot, it’s highly competitive, it has a full circuit. Same with Wild Rift.”

A significant difference between esports and traditional sports is that the term “esports” has historically referred only to the professional side of competitive gaming, not the recreational side. Sports is sports; the word equally describes both NFL players in stadiums and 10-year-olds playing backyard baseball. Esports is a subset of the broader gaming community, but it is very much its own thing. 

In spite of this key distinction, many brands will use the word “esports” to describe more casual gaming content. Instead of trying to educate their brand partners about the difference, prominent esports organizations are instead responding by broadening their offerings to include more casual, non-competitive content. “When we talk to brands, they’re not really differentiating — they would consider a streamer to be esports,” Sherman said. “And is it really our position to tell them? No, it’s not like we get into theoretical debates about it. What we do is embrace it, and say whether you’re focused on competitive or on streamers, we will try to build you a mixture of both, so you can get exposure to the full market.”

Note: You’ll see the word “esports” formatted in all kinds of different ways: e-sports and eSports are the most common alternatives. But plain old “esports” is the correct one — even the Associated Press agrees. It’s become a bit of a shibboleth for industry veterans, with uses of “e-sports” or “eSports” immediately outing those who don’t fully understand the space.

If esports is a niche, why is it valuable to brands and marketers?

Only a sliver of the gaming community actively participates in esports competitions. Roughly 30 million people watch esports in the United States every month, according to a March report by Insider Intelligence; there are over 226 million gamers in the United States, per research by the Entertainment Software Association last year.

Still, esports is a driver of gaming activity. Casual Overwatch players will tune into Overwatch League matches to learn about the latest advanced techniques or changes in the metagame. If a high-level Super Smash Bros. player wins a major tournament with a character that is available as downloadable in-game content, casual players are more likely to purchase the character so they can try it out themselves.

As casual gaming becomes more widespread, esports organizations are increasingly pivoting to creator-first strategies, dedicating more resources to the non-competitive gamers on their rosters. But esports is what gives the organizations their legitimacy and reach in the first place, and competitive gaming is likely to be a facet of their esports organizations’ strategies for many years to come. “Having that competitive backbone in esports will always be important to establish credibility, and also to participate in the high-value upside opportunities,” Sherman said. “But you don’t want to limit yourself to saying ‘we’re only esports.’ I think the key in all of this is to remain flexible and malleable to general trends in the industry, and have credibility in each one.”

Are esports fans and casual players the only types of gamers?

As much as brand marketers like to pair the terms, gaming and esports are not a binary. Esports is a subset of the gaming community, and gamers tend to fall somewhere on a continuum between the competitive and the casual. As both gaming and esports grow in popularity, the pool is getting increasingly diluted.

“What we’re finding in the Great Lakes is that there’s a lot of gaming communities, particularly in colleges and high school, that participate across a multitude of games, and are also interested in gaming themselves,” Sherman said. “So that’s kind of a third subset. There’s actually more of a grassroots play, which is a hybrid of both — essentially gamers who play competitively, but are mostly looking to get together through shared experiences in gaming.”

Where do professional esports players fit into the mix?

Just as esports is a subset of the broader gaming community, most esports players are themselves casual gamers who have embraced the cultural shift from hardcore competition to more recreational gaming. Indeed, esports organizations are encouraging their players to expand their content offerings to reach the broader gaming community, particularly as players retire young due to issues of stress and burnout. All of today’s most popular esports competitors also double as streamers and influencers, sprinkling casual Among Us and Minecraft streams among more dedicated grind sessions. 

“I know a lot of people when it comes to content creation, they’re like, ‘this is the chore of it,’” said Zain Naghmi, a Super Smash Bros. player for the Golden Guardians, an esports org affiliated with the NBA’s Golden State Warriors. “But when I do those sketches and stuff, I feel like I’m just hanging out with friends, and it’s rejuvenating to do something like that. And it’s also completely different from the intensity of competition, so I think they complement each other pretty well.”

Do brands need to get better at understanding the difference between gaming and esports?

Yes and no. Gaming is an immensely nuanced space, and so it never hurts for brands to bring gaming knowledge in-house and develop a better understanding of the industry. But the truth is that most of today’s gamers themselves do not care about the distinction. As the lines between gaming and esports become more blurred, both through casual gamers embracing competition and competitive gamers embracing more casual content, esports organizations will continue to be an effective vehicle for brands to reach gamers. The machine isn’t exactly broken, so it doesn’t need fixing — just some healthy upgrades.

“To a lot of younger people, there’s no such thing as esports; it’s all just video games. Here are our top professional players playing video games, and here’s my favorite content creator playing video games,” said Rob Moore, CEO of esports organization Sentinels Gaming. “And then, occasionally, you have the combination where the player is also the top entertainer. But I think, for the fans, the word ‘esport’ is probably less relevant to them than the way we’ve kind of shorthand talked about these organizations.”

From digital tip jars to creator programs, social media platforms are trying to create pathways for creators that woo them over and keep them on their channels as the need for platform-native creators, and their influence continues to grow as a marketing channel amid the pandemic.

Since the pandemic lockdown forced a shift in how people used social media, interest in influencer marketing accelerated so much that it’s now seen as a staple in most brands’ media mix. That trend was further pushed due to constraints for in-person production, and influencer marketing was up year-over-year, according to a 2021 report from eMarketer. More than 70% of marketers are expected to use an influencer marketing strategy this year, up from just over 60% last year, according to the report.

It’s created more cash opportunities for creators, said Joe Saw, director of operations at Fanbytes, a U.K.-based social media and influencer marketing agency, who predicted the trend will continue as brands see influencers as a must in their strategies.

As more money is poured into this space, more creators and influencers will want in. And the platforms are trying to compete for their participation. While platforms like YouTube and Instagram have paid creators since the early 2000s and early 2020, respectively, other platforms like Twitter, Pinterest and LinkedIn have spent the last year trying to position themselves as challengers.

Platform creator funds and programs can offer an additional revenue stream for creators and give them the experience they need to work directly with brands. The latter of which is largely seen as the most financially beneficial for creators, experts told Digiday.

Digiday spoke with 23 influencers to get a sense of what each platform is offering and how creators are — or aren’t — using them.

Facebook and Instagram (owned by parent company Meta): The O.G.

Instagram has long since been known as the go-to platform for influencers. However, most deals were inked between the brands and influencers themselves. Over the last year, and as the creator economy continues to grow, Instagram has started its own bid for creator attention, rolling out more opportunities for creators to make money off their content and stay active on the app. Some of those initiatives include Instagram Live Badges, where users can send monetary tips during a livestream, shops for creators to sell directly to fans, in-stream video ads, branded content, affiliate programs and bonuses.

Instagram Reels Play Bonus Program is seemingly a fan favorite at the moment, where creators earn money based on the performance of their Reel. Payout is calculated by the number of views a creator gets on their reels over the course of a 30-day period in the program. It’s unclear how much Meta pays per view.

Every 30 days, Chicago-based influencer Ashley Gross, who goes by @ewdatsgross on social media with more than Instagram 36,000 followers, says she can make up to $800 in the program. Meanwhile, Chicago-based influencer ​​Nicholas Bailey, who goes by @nicksaysgo on social media and has just over 8,000 followers on Instagram, said a recent Reel racked up 4,000 views and earned him an estimated $43. Both use Instagram as their main platform and say they appreciate the transparency around Instagram’s bonus program payment, knowing how many views they’ll need for a consistent payout. 

The tricky part is keeping up with the platform’s changing algorithm, which is seemingly prioritizing Reels content right now, a direct competitor to TikTok.

Bailey noted Instagram’s priority of video content over photos. “It’s possible to introduce new features, and have a shift of mindset without completely trashing the stuff that was already there,” he said. The platform’s changes keep creators beholden to a constantly changing algorithm, Bailey added.

Meanwhile, big blue Facebook has rolled out similar monetization opportunities in addition to previous enrichment programs like its first Black creator program, We The Culture. There are also subscriptions and paid online event options. Last year, CEO Mark Zuckerberg announced that by the end of 2022, Facebook and Instagram plan to invest more than $1 billion in creator monetization programs. 

TikTok: The Golden Child

Since 2020, TikTok has become the golden child of social media, passing a billion active users and becoming a staple in advertising budgets and influencer marketing plans. Because of TikTok’s unique algorithm, everyday users have the chance to go viral, a trend that has redefined who can be a creator, per Saw at Fanbytes.

TikTok’s monetization features under its so-called Creator Next program include tipping and gifting, a creator marketplace to connect brands to creators, and its $200 million creator fund, which launched in the U.S. in 2020 with a growth trajectory of reaching $1 billion by 2023, according to TikTok.

TikTok’s creator fund, per influencers, is accessible as it is open to creators who have a comparatively smaller follower size (at least 10,000 followers and 100,000 video views within a 30-day period). Creators also applauded TikTok’s clear eligibility standard, compared to a platform like Instagram, for which influencers say there’s little information available on how to access the creator fund or how participants are selected to join. However, those creators say TikTok is less clear when it comes to how much Tiktok pays per video view.

TikTok was Chicago-based influencer Gross’ first experience with a creator fund, but there wasn’t initially much clarity on how videos could make money, she said. Some videos would garner hundreds of thousands of views and 30 cents from TikTok, she said. Meanwhile, other videos with fewer views would solicit significantly more money from the creator fund. Altogether, even with a million views a month, she was only making about $100. It’s unclear how much TikTok pays per view. According to TikTok’s website, funds are calculated based on region, video engagement and more.

“It was nothing significant but it was enough to keep me encouraged,” she said. Gross has since prioritized Meta’s Reels after her engagement on TikTok started to slip once she joined its creator fund.

Alana Marie, a Dallas-based influencer who goes by @iam_alanamarie on TikTok and has more than 32,000 followers on the platform, had a similar experience. One TikTok reached more than 1 million views and another with an estimated 750,000, she said. The value of both videos turned out to be $50 from the creator fund.

Pinterest: The Underdog

Pinterest has recently started to reposition itself as a home to creators rather than a site for shopping and inspiration. In September, Zenash “Zeny” Shifferaw was tapped as Pinterest’s creator inclusion lead to help build up the platform’s budding creator ecosystem.

Last April, Pinterest launched its first-ever creator fund in the U.S., granting $500,000 for participants. Pinterest selected participants it considered rising star creators from underrepresented communities. Late last month, Pinterest announced plans to beef up that creator fund, promising to invest $1.2 million in underrepresented creators through cash grants, ad credits and equipment, per a Pinterest news release. Pinterest will announce a new fund cycle every quarter. The fund includes five weeks of training and resources, potential brand partnership opportunities and $25,000 in the form of a cash grant, ad credits and an equipment stipend. It’s expected to expand to Brazil and the U.K. later this year.

There’s also Pinterest’s Creator Reward Program, also U.S.-based, which launched in beta last October with plans to fully roll out later this year. Unlike creator funds offered by other platforms, Pinterest’s reward program is based on creativity as opposed to virality, said Alexandra Nikolajev, senior lead of creator content and partnerships at Pinterest. Meaning, Pinterest is vying for engagement as opposed to views or likes. To be eligible, users only need 1,000 followers.

Per Nikolajev, Pinterest has also rolled out a six-month residency program, which offers a monthly retainer of $1,000 per month. It’s geared toward nano and micro creators.

Jazmyn Creer, who goes by @dailydoseofluxury on Pinterest and has more than 23,000 followers, is a Los Angeles-based influencer who is part of the residency program and received “four figures per month for five pieces of content.” According to Creer, joining the program was a no-brainer because of the platform’s transparency and creator experience. She has a presence on Instagram and TikTok, but said Pinterest is her priority when it comes to social media. 

“They are adding details that are common on other platforms, but adding them in a way that actually benefits the platform, not just doing things because they are trendy or they want to keep up,” Creer said in an email.

Twitter: The Late Bloomer

Twitter has been trolled for years for not having a way to edit tweets once they’re live. While that is still not an option, Twitter is making its own attempts to appease creators.

Back in 2013, Twitter launched Twitter Amplify, in which publishers and creators could earn revenue by way of monthly payouts through pre-roll ads.

Twitter acquired the newsletter platform Revue last January, adding a way for creators to charge for their tweets. The platform charges 5% of creator earnings for the service. Users can also earn monthly revenue with its other subscription feature, Super Follows. Subscription prices range from  $2.99, $4.99, or $9.99.

The word-based social media platform also launched its tipping feature late last year, making it easy for users to tip their favorite Tweeters. Twitter itself doesn’t impose limits on the amount a user can tip. However, the platform employs third-party payment platforms that may charge service fees. Finally, creators can charge for audio-based events with ticketed Spaces

Twitter too has creator funds and programs, including its three-month accelerator initiative, the Twitter Spaces Spark Program. Other program perks include a monthly stipend of $2,500, ad credits to promote Spaces audio events, early access to new products and features, community support and opportunities for increased in-app visibility. To apply for the Twitter Spaces Spark Program, users must be U.S.-based, have at least 5,000 active followers and commit to hosting a minimum of two Spaces per week.

Brooklyn-based influencer G. L. DiVittorio, known as @gldivittorio (more than 97,000 Twitter followers) as well as the @ThePocketReport (more than 66,0000 followers on Twitter), has experimented with Super Follows before, but the experiment was short-lived due to the poor payout. Between last November and this March, DiVittorio had at least 40 super followers paying $2.99 each per month. She made $171 from the feature, which was paid in two installments.

“Relying on a free platform’s users to pay creators doesn’t work for the same reasons most people wouldn’t pay to use the app,” DiVittorio said in an email. “Twitter and other platforms should pay creators a share of what they make in advertising on our pages due to us being the reason people are seeing that ad.”

DiVittorio has been able to monetize content, but mostly indirectly, she said. Most of her income as a content creator stems from Patreon and TikTok ads. However, Twitter is the creator’s go-to platform because of its flexibility around publishing content. Meaning posts can range from a static image to video or standalone copy.

Honorable mentions:

YouTube: For years, YouTube was well-known to be the best place for creators to make money, most notably via ad revenue from video advertisements. Creators made revenue from ad content rather than relying on creator fund, pushing many creators to launch a YouTube presence in addition to profiles across competing social media platforms. The Google-owned platform offers the YouTube Partner Program, Super Chat and Super Stickers, which fans can purchase and gift to creators, channel memberships, partnership opportunities and more. Last May, YouTube introduced the YouTube Shorts Fund, dedicating $100 million to creators over the course of 2021 and 2022.

LinkedIn: It’s only been a year since LinkedIn started looking into what a creator meant to the platform. At that time, the professional networking site lauded its creator mode profile setting allowing users to mark themselves as creators and grow their audience. Late last month, LinkedIn announced plans to expand those efforts, including enhanced analytics, new content alerts, new profile video tools, and featured newsletters.

In September 2021, LinkedIn announced its 10-week creator accelerator program, a $25 million investment in up to 100 U.S.-based creators. The program offers coaching, access to product resources, opportunities to be featured on LinkedIn channels and a $15,000 grant. 

Triller: Last fall, Triller launched its inaugural Assembly for Black Creators, an invite-only virtual conference providing creators with educational content and a chance to work with global brands. In November, the social media platform announced plans to award one-year contracts worth $14 million to 300 Black creators who attended the Assembly for Black Creators. Participants could earn $2000 in fees and $2,000 in Triller company equity per month, according to a news release.

Snapchat: In late 2020, Snap launched its response to TikTok and Instagram Reels, and foray into the creator economy, with Spotlight. To allow for monetization, Snap users can gift what the platform calls crystals to their favorite creators, who can then later cash them out for money. Snapchatters can also monetize their content by submitting top-performing Spotlight submissions or connect with brands through the creator marketplace.

Clubhouse: Audio-first social platform Clubhouse had a massive wave of popularity during the onset of the pandemic. In an attempt to get ahead of the creator economy curb, Clubhouse launched creator monetization opportunities not long after its launch. Last April, the social audio platform introduced its first monetization feature with Clubhouse payments. With the feature, users were able to send money to their favorite creators while Clubhouse payment processing partner, Stripe, charged a card processing fee and creators collected remaining funds. Then in May, Clubhouse rolled out its inaugural “Creator First” Accelerator program, offering creators a monthly stipend, brand partnership opportunities, equipment and creative support.

“As buyers get accustomed to the risk profile associated with businesses that only have digital assets, the market has just exploded. COVID really exacerbated the M&A market in the agency space,” said Amanda Dixon, co-founder of M&A firm Barney, which has over $500 million in active listings and is on pace to do between 70-100 transactions in the agency space this year. “The mindset that agencies are going to be here in a in a different way than in the past as they participate in helping brands digitally transform has just totally been exacerbated with the global pandemic.”

To wit, only two weeks ago, The Carlyle Group through the Amsterdam-based marketing services firm Dept it controls, acquired 3Q Digital. And only months before, 3Q had purchased SEO firm Inseev. Meanwhile, New Mountain Capital (which bought healthcare agency Real Chemistry), CVC Capital Partners (which bought Asian-based Blue Focus) and Next 15 (which just bought U.K.-based Engine Group) are among the other acquisitive PE firms in the last year. 

What’s behind this trend? For one, there’s the appeal of performance marketing, which can generate more instant results for investors and just happens to be very hot at the moment as consumer habits drift toward e-commerce.

“There’s a lot of high growth in the digital performance marketing sector that’s driven by a lot of more data-driven, customer-acquisition and growth strategies. And through the pandemic, the acceleration of digital and acceleration of e-commerce activity has further enabled that,” said Michael Seidler, CEO of M&A firm Madison Alley. “The other thing that’s driving it [are] new video platforms like YouTube, CTV and OTT, and then even like Tik Tok and Instagram. They’re all growing — so those new platforms are presenting new opportunities” for marketers.

Even the Great Resignation has had an effect on buying agencies, added Dixon.

“People have this notion that a PE buyer coming in is going to completely decimate culture, and that it will be a miserable experience. And the reality is, we have seen way more success stories with financial buyers than not,” she explained. “The financial buyers that have decided to come in and get comfortable in this space, recognize that it’s a very human capital centric business, and the assets that they’re purchasing are really contingent upon people being happy in their work environment.”

There is, however, a different way for independents to grow their roster without having PE money back them. Dan Khabie, co-founder of independent Court Avenue, who sold his old agency Digitaria to WPP in 2010, uses that perspective and experience (including what to avoid) to drive the acquisitions Court Avenue has made — without PE or venture capital help. 

“We’ve created a new playbook on how we plan to scale our business,” said Khabie. “Part of it is [co-founder] Kenny [Tomlin, who sold his agency Rockfish to WPP in 2010] and I investing a significant amount of money into the business, and part of it is bringing in strategic investors rather than a private equity firm. And then we are kind of growing off of our balance sheet because we don’t need to pull money out of our companies.”

Still, with all these PE investments and acquisitions, one can expect another round of selling off agencies, since most PE firms aren’t in it for the long haul, but rather making their multiples nut and then selling within three to five years. 

Color by numbers

Traditional television has held onto live sports as a last bastion of significant ratings, but even that may be starting to slip. According to research from Integral Ad Science, consumers are warming to digital streaming platforms’ carriage of live sports. Likewise, leagues have been spreading their rights to places like Apple TV (Major League Baseball) and Amazon Prime (National Football League) not just traditional broadcast and cable networks. Here are some highlights from IAS’ study, Game Day Digital Strategy, which surveyed 1,100 U.S. online consumers who watch sports:  

• 46% of online U.S. consumers usually watch live major sporting events on digital streaming platforms, the most popular of which include Hulu, YouTube TV, and ESPN+
• 90% of consumers who use streaming services agree that their ad experience is better on digital streaming platforms than traditional TV when watching sports
• 45% of consumers are likely to remember a brand or product with contextually relevant advertising during a major sporting event
• 43% of consumers find ads helpful when planning for activities leading up to a sporting event

Takeoff & landing

• Burger King named Omnicom’s PHD its media agency following a review; PHD also handles media for corporate siblings Popeyes and Tim Hortons. Horizon Media was the incumbent and will continue to handle media for BK and TH in Canada.  
• GroupM media agency Wavemaker named Ryan Webber CEO of Wavemaker Canada, bringing him over from iLobby where he was chief revenue officer.
• Goodyear named Stagwell-owned Colle McVoy its media and creative agency of record for its company-owned properties.

Direct quote

“Offering some free advice to Netflix … consider well the options you offer to viewers. You obviously want to keep the flagship, and have a free ad-supported service, but what about additional options in between? There’s room for ad-lite services in the middle, perhaps an array of them, so that as people consider the slate, they upgrade themselves up from free in order to get some of the holdback premium programming. There’s a lot of room for creativity in the packaging.”

— Research veteran and columnist Bill Harvey on Netflix’s announced plans to introduce advertising.

Speed reading

• I covered GroupM’s consolidation of agencies by blending Essence and Mediacom into one, and formalizing the merger of Mindshare with Neo. 
• Digiday senior marketing reporter Kimeko McCoy took a deep dive into how Apple’s iOS14 changes a year ago dramatically altered digital advertising. 
• And Digiday’s gaming and esports reporter Alexander Lee breaks down advances in measuring and evaluating gaming advertising — which is not to be confused with its subset in-game advertising. 

“This year, we’ve shifted a lot of our activity to experiential,” said Aleco Azqueta, vp of Grey Goose for North America. “What we really wanted to do is get people to try and experience the brand firsthand.” 

It’s unclear how much the brand will spend on its increased experiential effort for 2022 as Azqueta declined to share specifics or percentages of the media budget. That being said, Azqueta did share that the brand is beefing up its efforts when it comes to experiential marketing, working with performers like Tinashe and designers like Peter Dundas for the Grammys, for example, to make the spirit more memorable as consumer expectations for brand experiences and activations are on the upswing as the coronavirus seemingly recedes. 

“With people having been at home for so long, now that they’re going out and experiencing things they really want an experience that is something that they can’t replicate at their home,” said Azqueta. “People have upskilled their own mixology and bartending skills while they’ve been at home and [our] cocktail kits allow them to do that. When they come to a Grey Goose event or Grey Goose experience it has to be a next level kind of experience.” 

Grey Goose isn’t alone in increasing its investment in experiential marketing now. Brands like Absolut and Call of Duty, among others, are increasing their investments in in-person activations and experiential marketing. 

Over the last two-and-a-half years, marketers have tried to navigate the starts and stops, the ebbs and flows of the return of in-person experiences as some experiential marketing was activated when numbers were low in the summer of 2020 and post-vaccine. Now it seems that in-person experiences are continuing despite rising case numbers in some parts of the country. 

“People are learning how to live with Covid, so it’s no surprise experiential experiences are making a comeback,” said Rob Schwartz, chairman at TBWA/Chait/Day in New York. “One of the things brands need to understand is that an activation is not a panacea. It’s not an event and that’s it. For an activation to get true ROI it needs to be part of a marketing mix.”

While Grey Goose is aiming to beef up its in-person experiences by working with performers and designers, the company is also using those partnerships to create content for its digital and social channels.

At the same time it is also using those partnerships for new marketing efforts like the brand’s first NFT. As part of the brand’s partnership with Peter Dundas, an NFT of Paris Hilton walking the Grammys red carpet with Dundas’ creation for the brand — a bespoke martini bag — as well as original sketches of the bag were sold and will give access to Dundas’ New York Fashion Week show later this year. 

Finding a way to elevate experiential efforts now makes sense to Allen Adamson, brand consultant and co-founder of Metaforce. “Just drinking a Grey Goose mixed drink isn’t enough [to get people excited about an experience],” said Adamson. “Marketers need to add some drama, theater to get people to share their experiences on social media.” 

That being said as marketers look to make their experiences more memorable they need to keep their brand identity in mind. “In terms of ‘elevating’ the experience, it’s critical that no matter what the activation is, it must be authentic to the brand,” said Schwartz.