Lagardère Sports to get creative to shake up esports partnerships
By Susan Lingeswaran
Esports is enjoying increased interest from brands due to the absence of traditional live sport across the world amid the coronavirus pandemic, but promoters should not “copy and paste” the strategies they use on traditional sports, Moritz Altmann and Thomas Ottl, executive director and senior director of esports, respectively, at international sports marketing agency Lagardère Sports, have told Sportcal.
With mainstream sports around the world on hold, audiences have increasingly turned to watching the world’s best gamers to fill the empty hours of lockdown and isolation. Twitch, one of the world’s biggest streaming platforms for gamers, is estimated to have grown its audience by up to a third in March alone.
Speaking to Sportcal from Germany, Ottl said where conventional sports have been ground to a halt by containment measures, gaming has largely found a way, which has not only saved it from the financial crisis facing traditional sports but accelerated its commercial growth.
He explained: “The corona-crisis, if you can put it that way, has had a mostly positive impact on esports and we’ve seen a tremendous growth of viewership in this time and brands looking at entering the market on the back of this.
“The flexibility of this sport with its digital nature and virtual accessibility is not that much influenced by the physical barriers compared to many other stakeholders in the sports industry at the moment. As one of the last live sport and entertainment contents during the crisis, a lot of people are wanting to deal with esports for the first time.”
Lagardère Sports first entered the esports market in 2017 by signing on to be the exclusive marketing partner of League of Legends team Unicorns of Love. Since then, it has expanded its presence in the market with a number of teams, including Germany's SK Gaming and South Korea's T1.
It is also the exclusive marketing agency for Riot Games’ popular League of Legends European Championship (LEC).
Even while traditional sports were shutting their operations down earlier this year, Lagardère Sports was bucking the trend and brokering new commercial deals for their partners.
Altmann said with esports getting more sophisticated commercially, brands were taking the time to look deeper into the industry.
He said: “Companies are looking to shift more of their budgets into esports now they see how popular it is getting. There used to be a lack of data about audience and engagement numbers to figure out budgets, not like traditional sports where there are years and years of data you can show, but we have been working with data companies like [media analytics company] Nielsen to bring to partners.
“Convincing brands’ upper management to enter into esports is more difficult than traditional sports because many of them don’t know a lot about it. For them, I say the summer tournaments are a great entry point because they have big audiences, you can be creative and you will definitely hit your KPI’s with engagement.”
Esports has not been completely immune to the effects of coronavirus, however. Although essentially digital events, the big gaming competitions are held in stadiums and attended just like conventional sports. The $30 million 2019 Fortnite World Cup drew 2.3 million views across YouTube and Twitch but was also watched live by 19,000 people at New York’s Arthur Ashe Stadium.
Such events have been hit hard by Covid-19: Activision-Blizzard’s Overwatch League, held in arenas like Madison Square Garden to sell-out crowds, announced it would be playing out its entire 2020 season online, while the LEC finals, set to be held in Budapest, was moved to the LEC Studio in Berlin to be played online.
Ottl noted that while the cancellation of the events hurt ticket and merchandise revenue, sponsors were still able to fulfil their activations successfully to a big online audience.
He said: “Our colleagues at Lagardère Plus [the brand consulting arm of Lagardère] recently did a video campaign on behalf of [global chocolate giant] Kit Kat for the LEC that was meant to be broadcast between matches at the Spring Split Finals but with the event cancelled, we had to switch the activation, which was stressful but ended up being very successful.
“We were also able to get the popular German DJ Robin Schulz to live-stream a 45-minute set before the finals for the fans at the last minute, so it just shows how flexible and versatile the industry can be commercially.”
The demographic of esports audience has expanded from the traditional 16- to 25-year-old males to a more diversified group creating a bigger target group for brands, although Altmann says this is due to the generation that grew up with gaming getting older.
Commenting on brands entering esports that had recently surprised him, Altmann cited last year’s partnership between Riot Games and luxury fashion brand Louis Vuitton.
The French fashion house launched the LVxLoL collection, which included shirts, parkas, trousers, shoes and accessories based on the publisher’s League of Legends game. In less than an hour, everything had sold out in their European online store, showing Altmann how varied the demographic the esports audience had become.
Louis Vuitton is not the only luxury brand to have entered into esports. Last year, German luxury fashion house Joop! partnered with SK Gaming in a deal brokered by Lagardere Sports releasing a Valentine’s Day photoshoot of the team’s players posing with the company’s Joop! Homme cologne on SK Gaming’s social media channels and the player’s profiles.
However, Altmann cautioned that promoters need to help brands find a way to become part of the esports “ecosystem”, which is different to sponsoring traditional sports.
He said: “It depends on your goals and your story. It’s the most important to explore and set up the right strategy, respect the community and find an authentic way to become part of the ecosystem and add value to the fans and gamers.
“A lot of marketers are not that familiar with gaming compared with traditional sport such as football. It’s not a copy and paste approach and understanding the market, communicating with audiences, learning from the teams and being relatable is absolutely key for esports.
“In the end it’s a process – we are always starting with a short analysis of the goals and existing campaigns of the brands, determine the best fitting partnership and create tailor-made storytelling. We’ve developed an in-house department out of creative esports specialists at Lagardere Plus and set up a partner network with endemic agencies around the world to offer support to the brands.”
Earlier this year, H.I.G Europe, an arm of the international private equity and asset management firm, signed a definitive agreement to acquire a majority stake in Lagardère Sports.
Lagardère announced the plans late last year to sell 75 per cent of the agency to H.I.G in a deal the sports arm at €110 million ($119 million).
Addressing the future strategy for Lagardère in esports, Ottl said while soccer and other traditional sports, including handball, motorsports and basketball, are still Lagardère’s major business, esports has become another cornerstone in the company.
He said: “Esports is an already important and integrated part of our business but it is also completely different from our classic sports and media business.
“We are in a lucky situation that we have started our esports engagements a couple of years ago, so we have had time to learn, do mistakes, improve ourselves and learn again. During this time, we formed strong partnerships with important players.
“These partnerships, learning and experiences have made us successful so far and we are really thankful for that. It’s obvious to continue this road but it is also crucial to have an eye on the development of the market when it comes to new games, technical innovations and the engagement of the audience.
“We have to be creative, open minded, quick and willing to take risks and learn from mistakes to be successful but we are also self-confident to handle this challenge.
“So we really can’t say how our esports and gaming business will look like in the future, all we can say is it will be bigger.”