eSports: What's the affiliate play?
Published 29th January 2020
There has been a lot of talk lately about esports and betting, from the recent Fortnite match fixing scandal to the unbelievable growth and popularity that this channel is currently displaying as an investment opportunity for traditional sports betting brands and affiliates.
The numbers don’t lie. According to the esports analysts NewZoo, global esports revenues were estimated to top $1.1bn in 2019 amid increasing revenues from mainstream brand advertisers, sponsorship deals and growing media rights to competitive tournament streaming.
There is no doubt that esports is a fastmoving and growing ecosystem, but the question is: how does affiliate marketing fit into this burgeoning sector?
I think most of us who are interested in this new vertical are currently waiting with bated breath to see what transpires. I’ve certainly been questioning the customer activation piece within the complex structure. While there appear to be a number of big-brand sportsbooks investing heavily as early adopters to build and win consumer favour, it’s unclear if any of this is actually paying dividends outside of brand building.
For now, one thing is clear: there is a very big difference between traditional sportsbooks such as Bet365 and Betway, which offer esports betting products as an add-on to their standard traditional sports betting products, and the more ‘purist’ esports brands, including Unikrn, GG.bet and Luckbox, which are steadily building brand value and pioneering learnings around engaging with millennials and the more hardened esports fans.
SO WHO’S WINNING – AND HOW DO AFFILIATES FIT IN HERE?
These are the questions I’ve been asking a variety of experts over the past few months as I’ve taken a closer look at the esports market. I’ve spoken with people in all areas of the esports ecosystem: operators, media owners/affiliates, players, team managers, sponsors, regulators, legal advisers, games developers, tournament organisers, specialist consultants, agency suppliers and venture capitalist investors.
Why did I speak to them? To get a better understanding of the sector and to find out where these (more experienced) participants think it might be headed.
WHAT DOES THE FUTURE HOLD?
The short answer is everyone believes there’s a big opportunity but nobody can predict how it will develop.
Affiliate marketing, as we understand it in the traditional gambling sense, does not exist here – yet. Many of the hightraffic- volume esports betting sites are catering to hardened esports fans. These sites are either producing amazing, upto- the-minute content, streaming live, or providing huge volumes of stats and data.
They are monetising their sites using advertising rate cards on CPM and CPC or fixed-fee sponsorships predominantly. The cost per player or revenue share models aren’t high on their radar.
Traditional sports betting affiliates who have taken the view to start investing in content and websites that target this audience are still figuring out how to attract, engage and convert the right type of niche customer and then upselling traditional sports to generate revenue long term. These affiliates are primarily investing as early adopters, to get some experience in this space and to understand how to make money from these players longer term. They are learning as the market matures.
However, this market is still fragmented. Right now, esports betting is still in its infancy. While the data exists to offer bets on matches, the marketing interest or player hook and conversion pieces are still being defined.
Big brands are pioneering early adoption of brand marketing in this area to secure consumer favour and brand awareness, and new purist brands are pioneering products and experiences around the games that previously didn’t really exist. The games publishers own the content, the esports teams own the players, the players are moving towards being better managed and regulations are being suggested and frameworks built to protect the ecosystem that is growing around all of this.
The customer and revenue activation piece is complex.
The structure of esports and sports is essentially the same, but that doesn’t mean it operates in the same order. Here’s what I mean:
● You have a game (the sport). Each attracts a different type of fan audience.
● You have fans or an audience (those watching the game).
● You have a team (those playing the game or tournament).
● You have players (being traded to teams, and becoming influencer brands in their own right).
● You have a bookmaker (creating odds on each of the teams that play the game).
● You have product suppliers providing the platform, data and front-end to enable the customer to watch and bet on the game.
● You have advertisers wanting sponsorship and brand exposure.
While in both esports and sports betting, the fan or viewer is still the target, these fans are engaged across a variety of different interest groups. They hang out on a lot of different channels and are interested in a multitude of different things. You aren’t looking at football fans at a football game – in esports you’ll get a horseracing fan, cricket fan, tennis fan and football fan all watching or playing CSGO, World of Tanks or Fortnite.
TAILORING YOUR APPROACH
The marketing strategies and tactics you use to engage and convert the group need to be quite different. A one-size-fitsall approach just isn’t going to work. Take these two esports enthusiast groups as an example:
Group 1: younger millennial Internet savvy; plays the game; watches the game; driven by reviews, social media, sophisticated online interactions and experiences with friends; uses their mobile frequently to seek and share information; could gamble on traditional sports but needs to be taught about it.
Group 2: older Generation X Internet savvy; grew up on simpler gameplay consoles; is too old to play esports competitively but still likes to try; is driven by offers but also likes rewards; still responds to email marketing; will go to a library or bookstore to gather knowledge; probably already bets on traditional sports like football or racing.
As an affiliate you’d need to understand exactly what these groups are interested in, what they aren’t getting anywhere else and then use a mix of media and affiliate commercial models to monetise the traffic you do get. It’s going to be a lot more complex than writing content to appear on top trigger keywords that usually convert traditional sports betting punters.
These guys want more than content – they want experiences, they want offers and they want entertainment. So how can affiliates provide this? The trick will be to find an activation piece.
What do I mean by activation? I mean how do you attract, engage, convert and build a funnel that keeps the customers you target coming back to be monetised over and over again. You need to offer a product or service that speaks to your niche.
Websites that rank are not going to be enough to build a successful affiliate model in this space due to customer preferences, segmentations and content fragmentation – not to mention the already established media brands that esports fans already know.
Any affiliate serious about entering this market and wanting to take a punt on the longer-term opportunity is going to have to think outside the box and consider which segment they will target first.
Next they need to look at what will drive their community to engage with them and build trust. The aim is to have a sticky, repeat following that you can monetise over and over. If you can work out what this could be, I think you’d be onto something. For the next few years it’s going to be about taking a long-term view to get in and invest for the long haul. It’s going to be about testing to discover what makes these different customers tick, and what triggers resonate to convert them.
I don’t think traditional affiliate modelling as we know it in the igaming sense, is going to work as a ‘plug and play’ model here.
Perhaps we’ll see the dawn of a new era of affiliation, designed by the demands that technology, consumers and the growing esports ecosystem demand. One thing’s for sure: it will be exciting to see how it develops and I’ll be waiting to see what happens next!