Esports Live Broadcast: an Appealing Media for Business-To-Consumer Communication

Internationale Betriebswirtschaft B.A. Hochschule Furtwangen University, Business School Supervised by Prof. Dr. Christoph Mergard eSports live broadcast: An appealing media for business-to-consumer communication

A thesis submitted in fulfillment of the requirements for the degree of Bachelor’s of Arts in the faculty of economy by

Daniel Fritz Matriculation number 248343 IBW 7 Pestalozzistr. 21 78176 Blumberg [email protected]

June 2018

Table of contents

Sworn Statement...... II List of Figures ...... III Abstract ...... IV Introduction ...... 1 Scope of study ...... 2 Literature review ...... 4 Methodology ...... 7 1. Examination of the eSports industry and eSport live broadcasts ...... 8 1.1. What is eSports? ...... 8 1.2. Examination of eSport live broadcasts ...... 10 2. Approaches to marketing communications ...... 13 2.1. AIDA model...... 13 2.2. Branding ...... 15 3. Instruments of marketing communications ...... 17 3.1. Advertising during eSport broadcasts ...... 17 3.2. Product placements ...... 20 3.3. Sponsorships and their value to eSports ...... 23 3.4. Media coverage, narratives and celebrity endorsements ...... 27 4. Research ...... 29 4.1. Findings ...... 30 5. Conclusion ...... 42 References ...... 44 Appendix ...... 49 Online survey and questionnaire ...... 49

Sworn Statement

I hereby solemnly declare on my oath that the work presented has been carried out by me alone without any form of illicit assistance. All sources have been fully quoted.

______Place, Date Signature

List of Figures

Figure 1: AIDA model according to Lewis in form of a funnel ……………………… 11 Figure 2: Strategies and corresponding modalities of product placement based on Russel and Tiwsakul, Hackley and Szmigin ……………………………….. 21 Figure 3: Global revenue of the eSports market split by income stream …………….. 24 Figure 4: Age distribution among eSports viewership spread into age classes ………. 31 Figure 5: Weekly live eSports consumption per age class …………………………… 32 Figure 6: Brand and product remembrance of repetitive commercials among gamers.. 33 Figure 7: Repetitive commercials versus one-time only commercials ……………….. 34 Figure 8: Brand remembrance among viewers open to audible placements …………. 36 Figure 9: Screen-placed brand logo remembrance based on placement awareness…... 37 Figure 10: Brand associations towards brands sponsoring teams ……………………. 38 Figure 11: Likeliness of viewers doing research about highlighted players …………. 39 Figure 12: Absolute frequencies of favourable brand associations using celebrity endorsements ……………………………………………………. 40 Figure 13: Influence of professional players on buying decisions of 16 to 24-year olds ……………………………………………………………………….. 41

Table 1: Interpretation of high and low durations of the respective categories………. 32 Table 2: Absolute frequencies of perceptions regarding gaming-related commercials. 35

III

Abstract

Organized, competitive computer gaming, also referred to as eSports, are emerging sports within the sports entertainment industry. The industry generated almost 700 million U.S. Dollar in revenue and leading eSport titles attract millions of viewers to their events. This study aims to explore eSport live broadcasts of four leading titles and their appeal to be used as a communication media for marketers. It adopted secondary data from academic and scientific studies, journals and books from the fields of eSports, business and sports management to examine commercials, product placements, sponsorships and celebrity endorsements in regards of their applicability and effectiveness within eSports. Quantitative research in form of a survey among eSports viewership was carried out to gather data on viewership consumption patterns and perceptions towards said communication instruments and their effectiveness. Findings suggest that the effectiveness of commercials rely on the timing shown during broadcasts. Product placements can be applied in many ways and show high effectiveness in terms of brand recognition in any form. Celebrity endorsements are highly ambiguous in terms of their applicability and effectiveness.

Introduction

Organized, competitive computer gaming, also referred to as eSports (Wagner, 2006), has captured the attention of millions of fans globally over the last few years. Computer games such as the currently most played game League of Legends with over 60 million active monthly players worldwide are watched daily by millions of people on live streaming platforms. Recently, these streaming platforms such as Twitch.tv (in the following only referred to as Twitch) and Youtube Gaming enjoyed increasing popularity due to the coverage of eSport events. Researchers who gathered data on viewership patterns using Twitch’s API found that 95% of the viewers on Twitch tune in on primarily the top 10 titles to watch, which only represent 0.04% of all available games on Twitch (Deng, Cuadrado, Tyson & Uhlig, 2015). According to their research a major key pattern was identified which corresponds to sharp rises of viewership numbers for major events in the scene such as the League of Legends World Championship or the Counter Strike: Global Offensive Major Championships. These major and unique events can be compared to traditional sport events such as the Super Bowl or the FIFA World Cup which draw a lot of attention even from people who do not consider themselves fans of that sport. Beside those unique events, there are also weekly highlights for European and north American viewers to watch which are the European League of Legends Championship Series and the North American League of Legends Championship Series respectively. Professional teams from Europe and Northern America are competing, similar to traditional sports, in a national League system where matches are held on a weekly basis to determine the best team and their opportunity to represent their region at the World Championships. These Leagues also take place in South Korea and China which both are leading Leagues in terms of popularity and viewership even from viewers from abroad and comparatively smaller regions such as Japan, Brazil, Turkey, and Russia. Media companies such as the German company Turtle Entertainment, the Korean TV channel Ongamenet (also known as OGN) or the American media company Turner Broadcasting Systems (in the following referred to as TBS) are broadcasting eSport events in co-operation with streaming platforms to the viewers. Riot Games which started out as the game developer of League of Legends expanded its portfolio and set-up its own in-house

1 production and broadcasting teams and facilities in order to satisfy demand of broadcasting eSport events of its own title. Given the huge amount of monthly active players, Riot Games reported that the finals of the 2017 League of Legends World Championship were viewed by 57,6 million unique viewers (Riot Games, 2018). Total viewing hours of this four-week event exceeded 1.2 billion hours. Endemic companies within the gaming industry such as hardware producers Intel, AMD and Razer or peripheral producers such as Logitech have for long been partners of eSport events in the past. Due to the rise in popularity over the last decade non-endemic companies and brands to the industry are entering the market. Traditional sport teams such as the Golden State Warriors, a club from the NBA or Schalke 04, a German soccer club have both invested into eSports by acquiring and running an eSport organization. Other global brands such as T-Mobile, HTC, Vodafone and Acer started to sponsor eSport organizations or eSport events. Behavioural futurist Will Higham rated eSports among sports with its global audience as a great opportunity to influence consumers in 2018 (Higham, 2018). Hence, this study focuses on answering the question whether eSport broadcasts are an appealing media for marketers to communicate with the public and their target groups or not and tries to provide empirical data on different marketing communication instruments in terms of their applicability and effectiveness within eSports.

Scope of study

In the following, this explorative study is going to examine the live broadcasts of eSport events of their appeal as a media for marketers to communicate with the public and their target group. This paper is going to cover the extent to which best practices of business- to-consumer communication in the entertainment industry, namely commercials, product placements, sponsorships and celebrity endorsements can be applied to eSport live broadcasts and is going to validate those using a quantitative survey focusing on the consumption behaviors of the eSports viewership. The study is going to focus exclusively on English broadcasts for eSport titles which are considered to fulfill the requirements of structure, organization, competition and institutionalization indicated

2 by Funk (Funk, Pizzo & Baker, 2018). In order to be considered as an eSport the title needs to deliver a clear ruleset to which all competing players and organizations are bound to. Additionally, there needs to be an existing instrument to guarantee rule adherence. The title also needs to have a clear win condition which declares winners and losers of a match. Above all these, there has to be an institutional power providing an ‘official governing body’ (Jenny, Manning, Keiper & Olrich, 2017). Often these institutional powers are represented by the game developers. In rare circumstances these institutional powers are extended from not only game developers but to include organizations competing in a league as long-term partners which is also referred to as a franchise system similar to the NFL or the German ice hockey league DEL. Private broadcasters as well as video games broadcasted which do not fulfill these requirements such as FIFA, where a game can end in a draw and thereby not stating a winner will not be considered in the following.

Given these limitations the study will focus on broadcasts of four titles which are League of Legends, Counter Strike: Global Offensive (in the following also referred to as CS:GO), Dota 2 and Overwatch as all four of them provide a relative high degree of institutionalization. For League of Legends, game developer Riot Games and its league partners for the western leagues and the Korean e-Sports Association (also known as KeSPA) for the South Korean League operate as institutions establishing and maintaining rule adherence and functioning as governing agencies in the interest of the respective leagues, organizations and players. ELEAGUE, which is the most-known competitive league for CS:GO is operated and owned by TBS and held at the TBS studios in Atlanta. It is the only eSport league that is currently broadcasted weekly to American audience on TV on their own channel. Blizzard Entertainment launched the Overwatch League as the owner, operator and biggest stakeholder of the league. The league operates with pre-set city-based teams and has regulations employed including minimum player salaries for example. Dota 2 follows a more decentralized approach of multiple third-party organized tournaments, sponsored by game developer Valve Corporation throughout the year leading up to The International, a tournament organized by Valve Corporation. The seventh edition of that tournament is up to date the tournament with the highest prize pool in the history of eSports with over $23 million (Khan, 2017).

Literature review

As eSports generated revenues accounting for approximately $696 million Dollars in 2017 (Newzoo, 2017) according to Newzoo, a market intelligence company on the field of eSports and mobile markets, it has earned the attention of many academics and researchers as a subject worth studying. Business academics as well as academics from the field of sports management have provided insights into the characteristics of eSports in recent years. Research in the field of eSports is yet in its infancy state, hence, comprehensive and in-depth research is scarce. Existing studies have focused on a wide range of different aspects concerning eSports. Some have undertaken research to identify motivational factors of consumers to spectate eSports and compared them to traditional sports, others were interested into the aspects of whether eSports can be accepted as a sport and therefore identifying the need for sports management in the industry. Douglas (2018) was the first to provide insights into League of Legends eSport to favor the argument of it being a sport. He analyzed the balance between luck and skill in terms of their impact for the outcome of a League of Legends match using persistence analysis and Bayesian analysis. He further differentiated between the format of the match being a best-of-one or a best-of-three format. According to his findings the outcome of a League of Legends match on the highest level depends significantly more on the player’s skill rather than on pure luck. In comparison to traditional sports, the share of skill being the determining factor for the outcome of a League of Legends match is larger than for ice hockey and baseball. His studies also addressed the need for game designers to be aware of the balance between luck and skill as it has implications on the viewing experience of such sports. Pitkänen (2015) contributed an extensive study about the mechanics of sponsorships within eSports and their creation of value for eSport entities. The study focused on a business-to-business point-of-view and evaluated the value creation using the ARA- model and found that the relationship between the partners especially their mutual perception about long-term goals is key to a sustainable growth. Impacts of sponsorships in the field of eSports on the buying behavior of potential customers were later studied by Saarnisto (2017). He concluded that while consumers of eSports

4 recognize sponsorships they do not get affected and persuaded by them to making a purchase. Instead they rather rely on own research about branded products. As pointed out by Pitkänen (2015), sponsorships in eSports as an emerging sport seek to fulfill long-term goals which where not addressed by the study of Saarnisto (2017) and therefore have yet to be conducted. Lee, An and Lee (2014) found that team attachment and the human side to it, namely professional players as well as commentators play a significant role as to why people watch eSport events. This finding can also be characterized as a classic form of fandom where followers are interested in the people they follow and their work and opinions. Moreover, attachment to a person can be extended to the person’s charisma and their brand. The findings that player attachment is a significant driver for viewers to watch eSport events has been validated by Hamari and Sjöblom (2017). According to their research they found that player aggressiveness caters for entertainment and therefore also for an incentive to watch. Both studies focused exclusively to identify those motivational factors in the sports entertainment industry of eSports. Given the results from Hamari and Sjöblom (2017), scholars have undertaken research to compare 15 motivational factors which are persistent in traditional sports and compared them to eSports. Their findings suggested that 11 out 15 of these motivational factors, including player attachment, enjoyment of aggression and the entertainment value are similarly persistent (Pizzo, Baker, Na, Lee, Kim & Funk, 2018).

A valuable insight into viewing patterns of eSports was given through an extensive study of the streaming platform Twitch. Researchers who collected data over a timeframe of 11 months found that especially channels of event broadcasters enjoy high viewership numbers (Deng et al. 2015). These high numbers indicate the demand of viewers to watch their favorite games being played on the highest professional level and the broadcasted show which is hosted alongside gameplay. Interestingly, this study unveiled that whenever there is an eSport event broadcasted it captures the attention of a mass audience taking viewership numbers off of independent private broadcasters from various titles.

The highlighted work provided insights into eSports and its characteristics. They highlighted which people tend to follow up on eSports related topics and what motivational factors drive people to do so. They also provided data on viewing patterns on the most common platforms and illustrated the reach that eSports as a sports entertainment industry has. Few have tried to answer the question on how to utilize this reach. In which ways can companies and their marketers use the reach of eSports events to communicate with the audience?

Methodology

The following section describes the methods used to obtain data and information related to the research interest and its objectives.

Primary data in form of quantitative data was obtained using an online survey. Data was later evaluated making use of absolute and relative frequencies and arithmetic averages to propose generalizations. Correlation analysis was used to explain coherences between perceptions of respondents and their interests.

Secondary data was obtained through both paper-based as well as electronic scientific and academic publications from researchers in the field of eSports, sports management and business. The publications were retrieved from reliable sources and databases such as Business Source Premier via EBSCO host and other professional journals using institutional access via Hochschule Furtwangen University libraries.

Prominent publications about industry insights were retrieved from industry-related sources and institutions such as ESPN news and Riot Games press releases.

1. Examination of the eSports industry and eSport live broadcasts

1.1. What is eSports?

Organized, competitive computer gaming (Wagner, 2006) builds the foundation of what eSports is. Generally speaking, eSport is about organized competition using video games. Most researches in the field of eSports point out that the very first eSport event was hold in 1980 by Atari which organized a three-month long tournament for their developed arcade game Space Invaders (Olsen, 2015) with about 10,000 participants. The foundation of this tournament was created through the development of highscore charts which enabled tracking the performance of individuals playing the game and identifying which individual achieved the largest score, namely the highscore and therefore identifying a clear winner. In 2000, Samsung organized the first edition of the World Cyber Games held in Seoul, South Korea featuring multiple games being played during that event. The World Cyber Games soon became the most acknowledged, yearly tournament for a variety of games and persisted until 2013. With the establishment of a yearly competition and being able to win money in form of prize pools by competing in such tournaments, eSport organizations/teams started to be found as for instance FNATIC in 2004 (FNATIC, 2018). Ever since the establishment of eSport organizations/teams which seek to find and hire the best players for a range of games, the industry has become more and more professional and developed. With the establishment of those organizations the eSports industry has changed from organized tournaments for individuals towards organized tournaments for competing teams. Nowadays, these organizations are developing themselves into global organizations operating in many different countries and in a range of different game titles while providing training facilities, accommodation and salaries to their players. Moreover, eSport organizations are expanding their brands into new markets such as content creation and apparel. G2 Esports for instance operates in eight different video game titles and maintains player rosters for each of those with a total of 35 professional players split across those eight titles (G2 Esports, 2018).

Apart from the organizations being established, the video game landscape has changed drastically. Originating in arcade games which were played stationary and did not provide a multiplayer, video games have developed to a point in which not only playing with others via the Internet but also coordinating actions with others has become a crucial property of the outcome of video games. As described by Douglas (2018) video games nowadays require a lot of skill whether it be sole physical skills such as eye-hand coordination or soft skills such as communication skills and strategical planning skills. The genre of Multiplayer Online Battle Arena (MOBA) in which the player is put into a team consisting of five players with equal skills has emerged as one of the most popular game genres. Individual actions impact the outcome of a game and therefore require coordination with teammates often done through voice chats. This interactive experience between players has also contributed to eSports global appeal for players and viewers.

Lastly, with the emergence of streaming platforms such as Twitch and Youtube Gaming eSports has developed to a spectator’s sport. While the organized competition is still the foundation of eSports it has expanded to bring the action to a live audience. It extended the variety of organizations operating in eSports from not only game developers and teams but to also media companies, governments and laws, journalists, make-up artists for live events and so forth. Overall the industry became more mature and more widely accepted among societies and governments.

1.2. Examination of eSport live broadcasts

The following chapter will provide an overview about common eSport broadcasts, their structure and content and is trying to identify opportunities for external companies to use these broadcasts as a media to communicate to the audience.

As illustrated in the literature review one of the most important motivational drivers to tune in on eSport broadcasts is to see one’s favorite players competing on the highest level of gameplay. Hence, the main content that is shown to the audience is gameplay. Gameplay takes a large portion of the broadcast time. Even though most eSport events take place in front of a live audience, similar to traditional sports and thereby filling up studios or even large stadiums with a crowd, the physical environment in which the event takes place is not shown on broadcasts during gameplay. Gameplay takes place in a pure virtual environment which is directly shown to spectators thereby limiting the options for communication purposes. A common practice that is used during the gameplay stage is to provide event-sponsoring companies a small exclusive part of the broadcasted screen area on top of the shown gameplay in which a permanent brand logo is shown which guarantees brand exposure to the audience. A deeper analysis of sponsorships and product placements and their opportunities will be discussed later.

Other than gameplay, broadcasts include a pre-game show and a post-game show. During the pre-game show analysts, commentators and star guests such as professional players or coaches from competing teams discuss the upcoming matches. They evaluate past performances of the competing teams, highlight key players to watch out for and state predictions about the outcome of the matches. In contrast to gameplay, the pre- game show takes place in a physical environment which is broadcasted to the audience. On-air commentators, analysts, guests and physical surroundings are visible to the spectating audience and offer great opportunities for communication purposes. Physical surroundings provide space for product placements and the placement of brand logos. The content which is presented during the pre-game show such as analytics underlined by statistics, previously-recorded interviews of the competing players about the upcoming matches and highlight videos of past matches all contribute to a pre-set

10 narrative which is told. These kind of teasers and narratives offer great opportunity for celebrity endorsements and brand exposure through narratives.

Most of the points addressed for the pre-game show also apply for the post-game show in which the on-air crew is recalling on the past match. The only addition to the post- game show are interviews performed with the professional players who just played the match. During the interviews physical surroundings are broadcasted which again provide the opportunity for product placements.

Generally speaking, when examining the English broadcasts of League of Legends leagues and tournaments, the CS:GO ELEAGUE, the Overwatch League and the Dota 2 majors the operators of these leagues are also the broadcasters which are also responsible for arranging the pre-game and post-game shows and thereby qualify for the lone holder of rights of the broadcast. Other than that, broadcasts for other languages are often carried out by third parties such as the South Korean media company OGN or the German media company Turtle Entertainment which broadcast gameplay to their respective natives in their local language. For this to happen, these third-party companies acquire the rights from the operators to broadcast their gameplay and produce their own distinctive pre-game and post-game show. Companies seeking to use eSport broadcasts as a media for their marketing communications need to be aware to approach the correct holder of broadcasting rights in order to negotiate deals regarding advertising and product placements for instance. While broadcasts for local country- specific areas will not be considered in this specific study, the dispersion from not only a global English broadcast but to also many different domestic broadcasts will broaden the opportunities not only limited to global brands and multibillion companies to use the reach of eSports to communicate with the audience but also for domestic and comparatively smaller companies to use it in the future.

As eSport events usually cover more than one match per matchday or a series of the same match for tournaments respectively, it is common during broadcasts to have a break in between the matches ranging from three to ten minutes. These breaks can be considered as the biggest opportunity to bring commercials to the audience.

In general, broadcasts no matter what content is broadcasted and no matter which platform is used to broadcast content to an audience can be classified as a mass communication media (Jobber & Ellis-Chadwick, 2013). In that sense, a broadcast carries valuable properties which marketers are looking for. Broadcasts delivering eSports content focus on satisfying demand of the target group of predominantly gamers and other people enjoying the competitive thrill and excitement. It is argued that gamers are predominantly young male between the age of 16-25. Even though this argument holds true there are shifts in demographics of gamers as can be observed in the UK for example where the percentage of young women playing video games on smartphones has exceeded the 50% mark (Stuart, 2014) as well as the percentage of people in the mid 40’s playing video games more often. This indicates that also these demographics are likely to follow-up on eSport events.

Additionally, broadcasts offer marketers to present their brand and products in a lively manner in form of videos including audio and visuals. It is a major advantage compared to print media where audio and visuals cannot be used to stimulate prospective buyers. A key disadvantage that can be found when using broadcasts as one’s desired media channel is that commercials are non-relatable for prospective buyers once shown as they are not archived. Often this is a reason why commercials are shown more often within a short time frame to enforce recognition. (Jobber & Ellis-Chadwick, 2013). Avoidance of that disadvantage can nowadays partly be achieved by recording and saving past broadcasts and providing those in form of video-on-demand content. This though, will be neglected for further analysis in this paper as the focus shall be put on live broadcasted content only.

2. Approaches to marketing communications

2.1. AIDA model

Marketing communications has been a changing field in business and marketing for years. The ways in which marketers get into contact to their audiences varied significantly over the last decades. Starting from newspaper ads to radio spots to TV commercials and lastly social media campaigns. Over the course of time many different tools have emerged which marketers can use to get their core message out to their audience. Each of these tools fulfills different objectives. A widely accepted model to characterize these objectives is the AIDA model originally developed by Elias St. Elmo Lewis in 1898 (often also referred to as the strong theory of advertising). AIDA stands for awareness, interest, desire and action and describes the four primary objectives of an advertisement. As the model was initially created to explain an effective advertisement, it focuses on the short-term effect of convincing prospective buyers to make a purchase in a direct manner. In today’s literature the AIDA model is often illustrated as a funnel, often called marketing funnel, sales funnel or purchase funnel, depending on the point- of-view. Figure 1 illustrates the AIDA model as a funnel.

Figure 1: AIDA model according to Lewis in form of a funnel

The funnel illustrates the buying process of prospective buyers and that the number of prospective buyers decreases the further down one gets. Given that mass medias such as television and other streamed broadcasts enjoy high viewership the initial audience is often large and diverse. The objective for marketers is to communicate a clear message which fulfills to create awareness, interest and desire among this audience leading prospective buyers to take action and to make a purchase. One can create awareness by placing advertisements on mass medias, newspapers, social medias, blogs and outdoors. The challenge for an effective advertisement is to create interest and desire. Interest can be created by wising up prospective buyers about the advantages of buying a brand or by showcasing the usage of a product which can be referred to as an information-based message (Jobber et al. 2013). Another approach is to connect values such as status, wealth, success or superiority to the brand or product and create interest through that, also called an emotional message (Jobber et al. 2013). No matter which approach is used the message of any form of advertisement needs to be well thought out.

Once the objective of a message is identified, marketers need to decide on which media channel to use to spread their message to their target audience. Common media channels are print media such as newspapers, radio, which allows for audio transmitted advertisement, digital media such as TV and broadcasts on electronic devices and social media each of them carrying advantageous and disadvantageous properties over one another. It is important to understand that the media choice needs to be one that the desired target audience uses. This can be exemplified by pharmaceutical companies seeking to reach elderly people suffering from arthrosis with their advertisement for their new products against arthrosis. Understanding one’s target audience becomes a crucial task before deciding on the media channel to use. Given the assumption that elderly people refrain from using modern digital media such as the Internet, in this example the media choice of using a domestic renowned newspaper might be more appropriate and more successful.

2.2. Branding

Branding describes a process which companies use to distinguish their products from those of their competitors (Jobber & Ellis-Chadwick, 2013). Other than the AIDA model, branding focuses on establishing trusted values to the brand name or logo on a long-term basis which simplifies a prospective, future buying decision. In contrast to the AIDA approach, which is characterized by a direct and rather aggressive approach to incentivize prospective buyers to make a purchase now, branding aims to create associations of solidified values to a brand name or logo as for instance prestige, comfort or joy. The recognition as well as the association of those values aim to be the determinating factor for prospective buyers choosing between different products to make a purchase of that brand instead. This indirect approach of selling is proved to be successful especially for purchases which require low involvement of the buyer such as groceries and homewares (Huang & Sarigöllü, 2012).

The value of a brand is often referred to as brand equity. The concept of brand equity values a brand from two different perspectives which are the financial perspective a brand contributes to the market value of a company and the customer-based perspective focusing on how a brand is recognized and perceived among customers. For further analysis in this paper the financial perspective of brand equity will be neglected as the study aims to examine business-to-consumer communications.

According to Lassar, Mittal and Sharma (1995) customer-based brand equity is the deciding factor for financial gains through branding activities. It was further specified as consumer’s awareness, knowledge and image of a brand (Keller, 1993). Speaking in other words, successful branding aims to raise awareness of the brand and establishing a consistent image of that brand. A brand obtaining high levels of brand equity are said to provide strategic opportunities for companies in a way as they can act as a barrier for market entry of competitors as well as being more resistant against competing brands (Farquhar, 1989). This resistance is often based on customer loyalty towards a brand which showcases that customers in certain circumstances are willing to pay a premium for a trusted brand. In fact, revenue premiums charged on brands with high customer- based brand equity predict brand awareness of such more accurately than vice versa

15 when considering low-involvement decisions of buyers (Huang & Sarigöllü, 2012). Moreover, positive brand associations strengthen brand loyalty among customers (Buil, de Chernatony & Martínez, 2013).

Broadcasts and other mass media channels offer brand exposure to large audiences. While on the one hand this might be perceived as a good thing as it will guarantee awareness among the audience and provide great tools to advertise a brand it can flip to becoming extremely dangerous for a brand. It takes substantial effort to create and promote a brand into a desired direction but it does not take much to destroy the image of a brand once trust is broken by either not delivering promises or promoting the brand at controversial occasions. Concluding, branding communicates long-term values to prospective and present buyers of the brand. As such it can create strategic opportunities and long-term stable sales given strong brand equity. In order to build and maintain a brand, the ways in which the brand is promoted needs to be carefully selected.

3. Instruments of marketing communications

3.1. Advertising during eSport broadcasts

The following section is going to examine advertising in relation to eSport broadcasts. It tries to provide examples of how a successful advertisement can be employed during eSport live broadcasts. Hereby, TV commercials are used as a reference point as both TV as well as online streamed broadcasts share similar properties and must nowadays not necessarily be separated with the introduction of smart TV’s having access to the World Wide Web.

Advertising is the most commonly used tool for business-to-consumer communication among practitioners. It is an extremely direct form of communication introducing prospective buyers to, but not limited to, a new product for instance and at the same time providing incentives for them to buy the product. Nowadays, companies spend millions of dollars for their advertising strategies which shall achieve its objective in boosting sales and often to a minor extent also contribute to branding activities. As illustrated previously when examining the AIDA model, producing effective advertisements requires a deep understanding of one’s core message and a well- structured communication process through identifying the ideal media channel. Having this background in mind and adding the high production cost of commercials especially for TV and broadcasted commercials justifies these large investments into advertising strategies.

Companies which invest huge amounts into their advertising strategies are believed to know what they are doing which was stated as one of the reasons why TV commercials have a high impact on viewers (Rice & Atkin, 2001, cited by Jolodar & Ansari, 2011). Furthermore, they suggest that another reason why TV commercials achieve great effectiveness is that people spend a large share of their waking hours in front of a TV. While this reasoning might have been valid back when the research was undertaken it is observed that nowadays there seems to be a shift from the TV setting towards a mobile setting with especially young people preferably using their smartphones and tablets. Nonetheless, the underlying statement proposed by Rice and Atkin (2001, cited by

Jolodar & Ansari, 2011) that advertising effectiveness can be achieved through medias which are used regularly by one’s target audience is a crucial argument in favor for eSport broadcasts and their appeal as a marketing media.

Marketing research suggests that massive placements of repetitive advertisements among a generic audience are rather inefficient when used to persuade the target audience to make a purchase (Jolodar & Ansari, 2011). Hence, creating a need for innovative advertising that leads prospective buyers to making a purchase soon after. As of now, eSports can be characterized as emerging sports and yet mainly attracting a non-generic audience in the form of predominantly gamers. Given its fast evolution in recent years it can be expected to become mainstream soon and thereby attracting this generic audience.

When HP Inc. introduced its new Omen upper-class gaming line of desktop computers and laptops in 2016 (Kastrenakes, 2016) they achieved to create such a needed innovative advertisement with their commercial ‘Don’t Rage Quit’ which can still be found on the official Omen by HP Youtube channel. The target audience to reach out for were passionate gamers. HP used a phenomenon commonly known among gamers which is a so called ‘rage-quit’ in which the gamer is fueled by rage due to slowly- working hardware and bad internet connections resulting in an aggressive, loud and physical outrage which leads to damaging peripherals and quitting the game immediately. The success of the commercial is its relatability toward the target audience. It facilitates the message of a deep, empathic understanding of the target audience’s issues when playing and offers the solution. Furthermore, the initial rage- quit shown during the commercial acts as an eyecatcher to raise awareness and making the commercial exciting to watch. It makes successful use of audio straight from the start adding background noises of a fast-clicked mouse, gun-shot sounds and repetitive Microsoft Windows error pop-up sounds adding drama and velocity to the commercial. Interest and desire are created through said relatability using a simple phrase such as ‘gaming doesn’t have to be like this’. In this moment the target viewer gets involved and in a best-case scenario starts thinking about taking action by buying a product.

As outlined in section 1.2, it is assumed that the time given to show commercials during eSport broadcasts is extremely limited. Hence, it puts further pressure on the advertisers

18 to create short and interactive commercials in order to make use of eSport broadcasts as a media for effective advertising.

This far advertising was only examined for its effects on prospective buyers and how to convince them to make a purchase immediately after viewing an advertisement. Advertising cannot only be used to persuade prospective buyers to making a purchase but to increase brand equity in the form of brand awareness and brand associations.

As mentioned in section 2.2. this paper focuses on the customer-based perspective of brand equity. As such a deeper look needs to be taken into brand awareness and brand associations. As mentioned earlier, companies tend to spend huge amounts for their advertising strategies. Buil et al. (2013) carried out an empirical study to analyze correlations between perceived spending on advertising and brand awareness, brand associations and quality. Their findings suggest that while high perceived spending on advertising are likely to correlate into high brand awareness it does not correlate into positive brand associations or quality. This finding can be supported by practical examples of the commercials shown during the Super Bowl 52 in early 2018 on NBC. Commercials produced for the Super Bowl are perceived as the most expensive commercials in public (Zarett, 2018). Many people can refer to the brands advertising during this time, hence they are aware of them even after months but little associate brand values to those commercials as the focus often lies on which actor is to be seen in those or how creative the commercial was done. However, the Super Bowl commercials are an extremely special case due to their high anticipation among viewers which leads to a more important factor described by Buil et al. (2013) which is the viewers attitude towards the advertisement. Their findings suggest that a positive attitude towards an advertisement leads to brand awareness, positive brand associations and quality. In a special case such as the Super Bowl where there are expectations towards the upcoming commercials those can be extremely effective for branding activities if expectations are met. For other advertisements where there are less to none expectations it will still be important to create a carefully-thought out advertisement to differentiate it from one’s competitors such as the Omen by HP example illustrated previously as most commercials are considered annoying among viewership. A commercial that can capture the attention of

19 a viewer and change its attitude from being annoying to watch to an interesting advertisement fulfills the objective of raising brand awareness and positive brand associations. For eSport broadcasts this might be an indicator as to how advertising should be treated. The timing of when commercials shall be shown should not interrupt gameplay and the most interesting shows surrounding it as this would be perceived as annoying for viewers. Moreover, in order to make advertising during eSports broadcasts successful marketers need to create innovative commercials that appeal to the target audience given that those can only be shown during a downtime of the actual broadcast and therefore becoming less visible.

3.2. Product placements

The following section explains and analyzes three strategies of product placements and tries to explain which strategies can be applied to different stages of eSport broadcasts.

Extending the argument of attitudes toward advertising and favoring the point that commercials are often perceived as annoying to watch for viewers eventually leads to discussions about substitutes for it. One of such substitutes for instance can be product placement. Most studies conducted about product placements within mass media refer to product placements as a form of a monetary-compensated, visual or audible placement of branded products or brand labels (Karrh, 1998). The company wishing to expose its products to an audience pays an agreed amount of money to the party which is responsible for the broadcasted content and thereby able to include the products during production. For product placements within movies the paid party would be the movie production studio and for TV shows and other broadcasted shows such as eSport leagues and events the paid party is going to be the operator of the show or event which is responsible for the broadcasted content assuming an English-speaking broadcast as described in section 1.2. In the following, different strategies and modalities of product placements will be discussed. Figure 2 illustrates common approaches to product placement and their modality.

Figure 2: Strategies and corresponding modalities of product placement based on Russel (1998) and Tiwsakul, Hackley and Szmigin (2005)

Tiwsakul, Hackley and Szmigin (2005) describe three approaches to product placement. Implicit product placement, which describes placing a branded product or brand logo somewhere visible into a scene without it being used or mentioned. Integrated explicit product placement, which describes placing a product into a scene and actors making use of that product and addressing it and non-integrated explicit product placement, which describes addressing a branded product or brand without it being used in the context by the actors. These strategies of product placement by Tiwsakul et al. are based on and include the conceptualized modalities formulated by Russel (1998), in which she describes a screen placement as a visual placement of a branded product or brand logo into a scene. Within the context of a plot placement the branded product becomes part of the storyline told in both visual and audible forms which was the foundation of an integrated placement. Lastly, she describes a script placement as a solely audible placement of a brand mentioned in dialogues of actors.

In the following, the implementation of above mentioned strategies for eSport live broadcasts will be analyzed. As illustrated in section 1.2, broadcasted gameplay, which is also the major plot of any eSport broadcast, takes place in a virtual environment. That virtual environment is broadcasted to the audience limiting the options for product placements during the plot to only screen placements as well as audible script placements by commentators, eliminating an active implementation of branded products and their uses during gameplay. Also screen placements are limited to a small area of the screen during this time as otherwise it would cover actual gameplay. A common use in practice currently is to reserve a small rectangle in one of the screen corners for said screen placements of

21 brand logos and product advertisements. Often three to five different brands are shown in a rotating screen pattern in five to ten second intervals. It is worth mentioning that these kinds of placements are implicit as described by Tiwsakul et. al (2005) and are not mentioned in any audible way and have often no relevance to the plot. In comparison to screen placements audible script placements during gameplay by commentators can be used more effectively. For instance, in 2017 when Acer signed an official partnership for League of Legends eSport events with Riot Games (Acer, 2017), Acer was directly expressed as the sponsor for all relevant replays shown live on-air during gameplay by commentators as well as the partner providing new content in form of the Big Plays segment. The script placement was incorporated into the actual plot of gameplay as the replays were announced by commentators as ‘brought to you by Acer’. According to Russel (2002) the connection of a used modality to a plot plays a significant role in terms of brand recognition. While visual placements rely heavily on the connection to a plot to become highly recognized, audible placements are less dependent to plot connections and achieve higher brand recognition compared to visual placements regardless of their plot connection.

Examining pre-game shows and post-game shows, non-integrated explicit product placements can be used in various forms during these parts of the broadcast. Considering that both shows provide narratives either pre-defined by the hosts of the pre-game show or more spontaneous ones resulting from past gameplay during the post- game show the key plot of these shows are discussions and arguments for or against the narrative. Especially the pre-game show offers variety to formally address brands in form of auditive and highlighted statistics about upcoming matchups, fan engagements on social media or recaps of past matchdays which the named brands enabled. Implicit product placements can be used as the pre-game and post-game shows both take place in a physical environment. Possibilities during this time can range from placements of brand logos in the used studio to selected apparel for hosts and guests and simple placements of drinks on the desks.

As gameplay takes place in a virtual environment and given the main plot of pre-game and post-game shows are narratives and involve discussions and arguments rather than the usage of products, implementing integrated explicit product placements appear to be

22 difficult. The only visible products actively used by actors during this time are pencils, microphones and other utilities needed for setting up a broadcast such as screens for instance. While these products are visible to the viewership it is unlikely that actors will actively promote the used utilities assuming a paid placement of such.

3.3. Sponsorships and their value to eSports

The following section examines sponsorships and their objectives in a sports environment and tries to identify the effectiveness of these while exposed to broadcasts. This will include a brief examination about the incentives to sponsor an organization or event as well as a brief analysis on strategies of sponsorships.

Compared to advertisements which directly aim to convince prospective buyers to make a purchase, sponsorships are a more indirect form of communication, trying to establish a certain brand image and awareness in people’s mind which will result in a future purchase (Pitkänen, 2015). In recent history of eSports, sponsorships have been one of the most important revenue streams for competing organizations. According to Newzoo (2017), as shown in figure 3, sponsorships accounted for 38% of revenues earned within the global eSports market in 2017. This percentage used to be even higher two to three years ago, when revenue sharing in major leagues were not yet established and prize pools used to be smaller compared to now and organizations still had to cover their operational costs. Sponsorships used to be the only reliable source of income for organizations as fandom and in conjunction with it merchandise revenues used to be comparatively small.

Figure 3: Global revenue of the eSports market split by income stream (Newzoo, 2017)

In order to understand the workings of sponsorships the latest definition of a sponsorship is given by The International Chamber of Commerce which defines sponsorships as:

‘any commercial agreement by which a sponsor, for the mutual benefit of the sponsor and sponsored party, contractually provides financing or other support in order to establish an association between the sponsor's image, brands or products and a sponsorship property in return for rights to promote this association and/or for the granting of certain agreed direct or indirect benefits.’ (International Chamber of Commerce, 2003) Given this definition the sponsor and the sponsored party have a commercial agreement, which should benefit both parties. A sponsor can either provide financial support in form of paying an agreed value of money to the sponsored party or by providing the sponsored party with physical goods. In return for this support the sponsored party agrees to actively promote the sponsor’s products and brand and usually agrees that the sponsor, without further agreement is allowed to use the sponsored party’s brand and image to market this co-operation within advertisements and other marketing communication instruments.

A prominent example of such sponsorship deals is the co-operation between Rocket Mortgage by Quicken Loans, which is the second largest retail home lender in the United States and 100 Thieves, an eSports organization which had their entry into the

24 market in the beginning of 2018. Rocket Mortgage, which acts as the sponsoring party provided a property which is used as a living facility as well as a training facility for the athletes and staff of 100 Thieves, in this case the sponsored party (100 Thieves, 2018). In return 100 Thieves set-up a marketing campaign which included social media presence as well as the production of high quality Youtube content. CEO and founder of 100 Thieves and former professional player of CS:GO Matthew ‘Nadeshot’ Haag actively promotes this co-operation in many of his interviews and the promotion of the brand Rocket Mortgage has been highly involved in many of 100 Thieves’ Youtube videos. The brand logo of Rocket Mortgage can also be found on the players’ jerseys who carry the brand during matchdays. For such a co-operation to be successful both parties need to have the same understanding of which intangible values they want to deliver. The co-operation of these two companies which is still in its infancy can be claimed successful among the eSports environment as the intangible value of an upper class, high status and superior brand image was the objective to be achieved by 100 Thieves since their entry into the market. Recent competitive success of 100 Thieves in the North American League of Legends Championship Series further enhances the development of the desired brand image.

The strategy which is used in the above-mentioned example classifies as a serendipity as described by Amis, Pant and Slack (1997) in which a sponsoring party seeks out to establish a long-term co-operation with a lower profile athlete or organization. Given this long-term relationship the emphasis is put on the development of both the organization’s as well as the sponsoring party’s brand image. For both parties it is important to identify the image they want to represent and that the alignment of both is sustainable (Pitkänen, 2015). These kind of sponsorship strategies are needed for emerging sports as well as emerging sports talent to develop. The objective of such a strategy for the sponsoring party is to have long-term access to market knowledge in which the sponsored party operates as well as the development of such. The aim is to develop an emerging sport to become mainstream and to attract a large audience to it which can then be exploited in the future. These long-term sponsorships require a lot of trust and collaboration of both parties as pointed out by Chalmet (2015).

A different approach also described by Amis et al. (1997) is the so called ‘shotgun’ approach, in which a sponsor seeks out to establish partnerships with already high- profile personalities or organizations. This kind of approach involves a much higher amount of money to be spent and yields to achieve a highly successful partnership with high returns on investments. In these kinds of scenario the objective is to build up new business models using both the sponsoring party’s brand as well as the sponsored party’s high profile brand in the specific market segment which cannot be matched by other companies in that market segment.

As mentioned previously, sponsorships tend to be a more indirect form of communication to prospective buyers and interest groups as illustrated by the given examples. Nonetheless, exposure of both the sponsoring party’s and the sponsored party’s brand to the target audience of gamers through broadcasts provides a long-term opportunity to develop sales of both parties. Live broadcasts and ultimately on-air time need to be used by the sponsored party to actively reinforce the partnership and raise awareness. This can either be done through successful team performance or post-game interviews where the target audience is not distracted and can be targeted directly. Even though team performance might boost awareness of such partnerships it needs to be handled with caution and should not be taken as a basis of such sponsorship agreements (Pitkänen, 2015). A common pattern that can be observed during interviews with athletes and personalities in that market is a short shout-out to sponsors either at the beginning or at the end of an interview. If this kind of reinforcement is not done properly it is likely that the effectiveness of delivering the objectives of sponsorships through broadcasts will be limited.

In order to overcome some of these limitations sponsors should also take into consideration to sponsor an event such as tournaments or entire leagues instead of organizations. These kind of sponsorship agreements aim to increase brand exposure during broadcasts and involve much less collaboration between the sponsoring party and the sponsored party. While this approach will boost awareness among the target audience it is assumed to be more likely to fail to create interest into the brand due to the missing consistent value message.

3.4. Media coverage, narratives and celebrity endorsements

The following section is going to examine potential influences of media coverage and narratives told during broadcasts on perceptions about professional players as celebrities and the usage of celebrity endorsements of sport athletes.

Companies paying sport celebrities money for advertising their brand and products and thereby aiming to establish favorable associations about the product or brand are referred to as celebrity endorsement deals (Miciak and Shanklin, 1994). Celebrities are often chosen because of their charisma and their success in their respective sport making them outstanding personalities which are accepted and recognized among public. It is aimed that these perceptions of success and charisma are transferred onto the brand or product. Especially for younger people, these high-profile personalities were found to have large influence over them as they are perceived as role models (Stevens, Lathrop & Bradish, 2003). Atkin and Block (1983) addressed this influence earlier stating that younger people are more likely to be impressed by celebrities and therefore easier to be persuaded by what a celebrity has to say. While the field of celebrity endorsements and its effectiveness both on young people as well as on a generic public have been studied in detail only few have addressed the process of becoming a sports celebrity especially in the context of emerging sports. What does it take of a professional athlete in order to be considered a celebrity?

At first, athletes need to raise awareness about them as professionals. The public needs to know who they are and what they do. Exposure through broadcasted matches and the inherent media coverage of such events in newspapers are often pre-requirements that need to be existent to gain visibility. Once visibility to an audience is present a professional athlete seeking to achieve celebrity-like status needs to take action in order to stand out of the masses. This is where either athletic success, controversial statements and opinions about ongoing developments in the industry or public banter between the athlete and its opponents can transfer visibility into recognition. Either way, recognition is the first milestone to be achieved in order to build a player’s brand. In the field of eSports, being a regular contributor of content either on Youtube or Twitch while also establishing a consistent online presence on social media have significantly increased

27 popularities of certain professional players in the past. After gaining recognition through their performances some started to establish their nicknames as brands. A prominent example is Zachary ‘Sneaky’ Scuderi, a professional League of Legends player for Cloud 9. Starting his professional career five years ago and winning the North American League of Legends Championship Series in 2013 and 2014 he used the visibility and recognition of his performance to also start as a streamer on Twitch alongside his professional career and thereby consistently providing content for League of Legends fans. Over the course of the years he established a followership on his Twitch channel of more than 1.2 million people and a Twitter followership of just over 600 thousand people. A role that is to be highlighted in his success was the initial broadcasting of his matches and content created around him such as interviews and the likes which enabled him to be recognized among gaming enthusiasts. It is further assumed, that as of now, where eSport broadcasts attract a larger audience than they used to back in 2014, the impact on perceptions on status towards professional players is enhanced. Moreover, as the professionalism of eSport broadcasts has increased during this time and analysts as well as commentators delivering a broader show than only gameplay and thereby often making use of narratives to highlight players it is assumed that these audible ways of referring to players further enhances the impact that broadcasts can have on the status of professional players.

In case that professional players can soon be characterized as celebrities at least among the non-generic audience of gamers studies and practices which involve celebrity endorsements of sports athletes can be transferred to eSports.

4. Research

Quantitative data collection was carried out through an online survey using ‘Google Formulars’. The questionnaire can be found in the appendix. The aim of the survey was to appeal to as many viewers of the four major eSport titles discussed in this study and to verify most of the assumptions made in section 3 about the usage and applicability of the chosen marketing communication instruments. The survey focused on the consumption behaviors of eSports live viewership and their attitudes and perception towards the examined instruments of advertisements in form of commercials, product placements, sponsorships and celebrity endorsements. The online survey was distributed among the official subreddit for League of Legends, Counter Strike: Global Offensive, Dota 2 and Overwatch on www.reddit.com/r/leagueoflegends, /r/global-offensive, /r/dota2 and /r/overwatch as those are expected to be the hotspots for the respective eSport titles followership and viewership. A pre-test of the questionnaire was carried out before distribution of the survey. Over the course of the pre-test two misleading formulations were identified and specified before the survey went live. The survey was accessible on March 23, 2018 from 1.30 p.m. to 6.30 p.m. Central European Time. The survey adopted a five-point Likert-type scale over a seven-point Likert-type scale to enforce respondents to decide upon a more definite agreement or denial towards each statement only providing one neutral choice. In total 1940 people with valid responses participated in the survey providing a large sample size and thereby minimizing the impact of so called ‘internet trolls’ who intentionally try to sabotage the obtained data by providing extreme and unreasonable data. As a result of a timely-limited access to the survey as well as the survey receiving only great attention on the League of Legends subreddit the research failed to obtain comprehensive data for Dota 2, CS:GO and Overwatch viewership. Out of the 1940 respondents, 1813 (93.4%) respondents chose League of Legends as the most interesting eSport title for them to watch whereas only 68 (3.5%) respondents chose CS:GO, 15 (0.8%) respondents chose Dota 2 and 44 (2.3%) respondents chose Overwatch as the most interesting eSport title to watch, meaning the vast majority of responses are provided given the background of viewing predominantly League of

Legends. Nonetheless, data obtained regarding consumption behaviors, perceptions about commentators and professional players as well as attitudes towards commercials and product placements are uniformly-applicable irrespective of the eSport title and thereby increasing the reliability of the obtained data.

4.1. Findings

In the following the findings of the research will be presented and discussed. Emphasis is put on the relative frequency of the obtained data and their implications for the applicability and usability of the examined communication instruments. Arithmetic averages were computed to generalize sample groups to propose generalizations about the entire viewership. Correlation analysis was used to identify interactions between two variables.

In general, the assumption about eSport viewership being predominantly males was verified by the data provided in this survey. Out of the 1940 respondents 1864 (96.1%) classified as male and only 76 (3.9%) as female. The obtained data shows an enormous difference between males and females watching live eSport. Comparing this data to other findings reported in public press that the difference between genders playing videogames is fading it is highly questionable whether the obtained sample reflects actual gender distribution among viewership. As the survey was distributed among forums of which there is no data available about the users gender it is likely that the predominant presence of males in these forums skewed the dataset. Additionally, taking into consideration that other external factors such as the existence of cosplaying, which is often closely connected to eSports and gaming and it being done by a large share of female people indicates that the share of female people in the industry and viewership should most likely be larger than found by this study.

Data obtained regarding the age of viewers has been less volatile to the used form of distribution of the survey. As illustrated eSports viewership is assumed to be a young demographic compared to other sports entertainment industries. The absolute frequencies of the age classes conducted in this research can be found in figure 4.

Figure 4: Age distribution among eSports viewership spread into age classes

Relative frequency shows that 94.9% of the viewership is between the age of 16 to 30 years old with the largest percentage of 57.3% being between the age of 19 to 24. This finding is to some extend important to marketers as it limits and favors certain product groups. Assuming people under the age of 18 are mostly pupils in western societies, income among this target group is limited. Examining the age class of 19 to 24-year- olds, these are either people taking courses in higher education systems such as academics at universities or people starting in their full-time jobs. Assuming that income among this target segment is still developing and is not easily available the findings suggest that branding as well as sales activities for low involvement consumer goods are more likely to impact this target segment. Taking a closer look at the segment of 16 to 30-year-olds and their duration of consumption of live broadcasts reveals that the largest segment of 19 to 24-year-olds watches on an arithmetic average at least two hours and thirteen minutes of live broadcast up to an estimated arithmetic average of three and a half hours a week. Arithmetic average calculations were performed using the quantity of responses for each category and assigning either a high or a low interpretation of the duration to the categories resulting in a low level of consumption and a high level of consumption.. Interpretations can be found in table 1.

Table 1: Interpretation of high and low durations of the respective categories

Performing the same calculation for the segment of 16 to 18-year-olds yields a minimum average consumption time of one hour and fifty-two minutes and a maximum average consumption time of three hours and three minutes a week. The segment of 25 to 30-year-olds watch a minimum average of two hours and twenty minutes and a maximum average of three hours and thirty-five minutes a week. Performing the calculation for all three segments provides a minimum average viewing length of two hours and ten minutes and a maximum average viewing length of three hours and twenty-four minutes a week for 94.9% of eSports viewership. Figure 5 illustrates the distribution of live consumption among the three major age classes.

Figure 5: Weekly live eSports consumption per age class

The findings regarding viewing lengths among eSports viewership support the argument that eSport broadcasts are regularly and extensively used by the potential target audience of 16 to 30-year-old gamers.

Findings regarding advertising in eSports

It was assumed in section 3.1 that the viewership of eSport broadcasts still classifies as a non-generic audience, hence, the findings of Jolodar and Ansari (2011) regarding repetitive placements of the same advertisement being rather inefficient were not yet transferrable into eSports. Data shows that out of the 1940 respondents 1807 (93%) consider themselves as gamers or gaming enthusiasts underlining the presence of a non- generic audience with only 31 (1.6%) respondents denying that statement while the remaining part being undecisive about it. Taking a closer look into this non-generic audience of gamers data revealed that even though eSports live viewership can be considered a non-generic audience the effectiveness on brand and product remembrance among viewership while placing repetitive commercials seems to work in the by Jolodar and Ansari (2011) described direction of being rather inefficient as illustrated in figure 6.

Figure 6: Brand and product remembrance of repetitive commercials among gamers

633 respondents do not find it easier to memorize brands or products when exposed to the same commercial several times within a short timeframe while also 574 respondents not stating a clear opinion about that. With 600 respondents finding it easier to memorize the brand or product the perceptions regarding the effectiveness are evenly split among the three stages making it hard to propose a definite finding regarding the

33 effectiveness of such. Going into more depth regarding the effectiveness of repetitive advertisements respondents were asked to submit their attitude towards them. As examined in section 3.1 attitudes towards advertisements can play a significant role on brand awareness and brand associations according to Buil et al. (2013). Figure 7 shows that 62% of the respondents do not enjoy watching the same advertisements multiple times, hence, the attitude towards these advertisements will rather be perceived negative implying making them less effective in terms of brand recognition and creating brand associations.

Figure 7: Repetitive commercials versus one-time only commercials

Another harm to the efficiency of commercials is the general attitude towards the avoidance of commercials as much as possible. 1505 (77.5%) of respondents agreed that they would try to avoid commercial whenever they can while only 176 (9%) are willing to watch commercials. It was assumed in section 1.2 that the breaks taking place in between the matches were considered the only reliable time to show commercials as one would try to avoid showing them during gameplay which is considered the most interesting part of the broadcast as 82% of respondents agreed upon. In contrary to that believe 74.7% of the respondents tend to stop watching the broadcast during these breaks and spend their time doing other things. Out of the remaining 25.3% who can still be targeted 61% try to avoid watching commercials, hence, when showing commercials during this time one would at best capture the attention of about 15.5% of

34 the entire viewership. Data suggests that only half of the people interested in watching commercials is present during this time of the broadcast further limiting the effectiveness. Better efficiencies could therefore be achieved when showing commercials before actual gameplay takes place. According to the obtained data at least 42% of respondents would not mind watching commercials before actual gameplay while only 32% would dislike it. In the end a larger audience could be reached by showing commercials before actual gameplay.

Lastly, it was identified that even though a non-generic viewership is existent during eSport broadcasts it does not limit the content to be advertised to gaming related goods or brands. Table 2 shows the absolute frequencies of answers regarding the interest into gaming-related commercials given whether the respondent identifies as a gamer or not. It was assumed that considering oneself as a gamer also leads to a higher interest into gaming-related commercials.

Table 2: Absolute frequencies of perceptions regarding gaming-related commercials

Using correlation analysis yields a correlation of 0.19985 of being a gamer also impacting interest into gaming-related content. A positive correlation between the two was to be expected as interest lies in gaming among viewership, yet the correlation is not as strong as one would expect. Given this rather weak correlation between the two, data suggests that commercials related to other content is expected to be effective among eSports viewership. Combining both the weak correlation with the findings of the predominant part of viewers being young opens opportunities for external companies not operating in the gaming industry to use eSport broadcasts as an effective media for commercials. Commercials related to low involvement, fast-moving consumer goods are likely to be effective among eSports viewership. For this assumption to be verified, further research in this field is required.

Findings regarding product placements in eSports

Data shows that product placements are perceived less intrusive compared to commercials among eSports viewership. 17% of respondents find them equally intrusive as commercials while the remaining 83% consider them less intrusive. 60% of the viewership also enjoys watching the pre-game show which is considered the major opportunity for product placements to be visible. As examined audible placements are more effective in terms of brand recognition than visual ones when not connected to any plot (Russel, 2002). Data shows that 57.8% of respondents consider commentators as opinion leaders and therefore are interested in listening to their views, establishing a foundation for audible product placements through attention. Moreover, only 23.6% of respondents feel disturbed by commentators promoting branded content implying that product placements other than commercials act as a substitute which is not perceived as annoying to the viewers and therefore is more accepted. Correlation analysis of this segment of viewers feeling disturbed by commentators promoting branded content and their attitude towards brand recognition of such shows with a correlation of -0.19517 that these people have a weak negative response in general towards those audible placements and tend not to be affected by it whereas the larger portion of viewership (76.4%) which do not mind the promotion of branded content is more likely to remember the promoted brands as figure 8 shows.

Figure 8: Brand remembrance among viewers open to audible placements

Opportunities for audible placements but also for visual placements are provided through presented highlight videos of key players and statistics. Among the respondents who enjoy watching the pre-game show 90.5% enjoy watching those highlight videos and 84.5% consider statistics about upcoming matches indispensable for the show and the ongoing discussion. The attitude towards both is highly anticipated among viewership and therefore offer great potential to connect those with visual placements providing a plot to increase their effectiveness in terms of brand recognition and also to connect them to audible placements.

Lastly, visual placements were examined in regards of their visibility and their impact on brand logo remembrance of the viewers. Figure 9 illustrates the distribution of absolute frequencies of brand logo remembrance of viewers when they appear on screen underlying the awareness of the viewer that physical objects are used to carry those.

Figure 9: Screen-placed brand logo remembrance based on placement awareness

Figure 9 illustrates a positive correlation between viewers which are aware that physical objects are used to carry brand logos and the brand logo remembrance of such. This implies that visual placements are visible to the audience and as such also fulfill their aims. Contrary to the believe, that visual placements are less effective in terms of brand recognition when not connected to a plot data shows that when placed extremely visible they will also fulfill their objective of brand recognition.

Findings regarding sponsorships in eSports

The findings regarding product placements have severe implications for how effective event sponsorships can be for the sponsoring party. Considering that event sponsorships are often communicated using product placements the effectiveness of such provide the foundation of the effectiveness of event sponsorships considering the objective is brand awareness. The research did not aim to provide additional insights into event sponsorships regarding other possible objectives such as development of the industry and so forth. Given the findings of product placements, event sponsorships are a effective communication form to be used especially considering that potential external factors such as the shown interest into the target group for instance can further enhance positive brand associations. One of such factors can be described using team sponsorships. Figure 10 shows absolute frequencies of respondents having rather positive associations about brands sponsoring their favorite team.

Figure 10: Brand associations towards brands sponsoring teams

Around 50% of respondents hold positive associations towards brands sponsoring their favorite team indicating that team sponsorship does yield positive effects onto a brand. Whether or not eSport broadcasts are an effective media to promote team sponsorships and thereby creating visibility of such could not be examined. It is worth mentioning

38 though, that consistent team exposure and team performance are external factors that influence followership and fandom which extends the reach of team sponsorships.

The promotion of sponsors done by professional players at the end of interviews is highly ambiguous. About 41% of respondents do not mind it if players promote their sponsors while 35.5% dislike it. 23.5% are indifferent and did not state a clear opinion about it indicating that the promotion of sponsors is perceived differently among eSports viewership.

Findings regarding celebrity endorsements in eSports

As eSports is yet to be considered an emerging sport, this research aimed on obtaining data about whether athletes are considered celebrities among their viewership and in which ways they can achieve that status. 1393 (71.7%) respondents consider professional players as celebrities. The most notable way in which a professional player can achieve that status is through consistently high performance. 98.4% of the respondents recognize players through their performances in the first place. Moreover, narratives and the impact of commentators highlighting key players were examined. Figure 11 illustrates the likeliness among viewership to gather information about the highlighted player and to do some research about them.

Figure 11: Likeliness of viewers doing research about highlighted players

While the obtained data is highly ambiguous on whether viewers tend to do their own research or not about 41.4% of them are likely to do so, indicating that the practice of highlighting players does have positive effects on the player’s status. Considering only those respondents that also enjoy watching highlight videos of players increases that percentage slightly to about 46%. Additionally, as pointed out by Hamari and Sjöblom (2017) and later also by Pizzo et al. (2018) player aggressiveness is a key driver as to why people enjoy watching eSports. Data in this research verifies their findings as about 88.8% of the respondents enjoy friendly banter between the players. As examined in section 3.4, it is important for players to take action in order to increase their recognition and enforce their status as celebrities. Considering that public banter is either carried out on social media, during the pre-game show of the matches through pre-recorded interviews of the players or by having the players as guest at the analyst desk during the pre-game show puts a lot of emphasis onto the pre-game show and the impact the pre-game show can have on a player’s status. A well structured and consciously-planned pre-game show including narratives by the commentators as well as providing professional players space to promote themselves are found to have an enormous impact on a player’s status.

Taking those into consideration who consider professional players celebrities the effects of celebrity endorsements were analyzed. Figure 12 illustrates the proportions as to how likely they trust brands using professional players in endorsement deals.

Figure 12: Absolute frequencies of favorable brand associations using celebrity endorsements

The dispersion of responses leaves the effects of celebrity endorsements ambiguous. While about 35.1% of respondents are very unlikely to trust brands advertised by professional players around 40.1% seem to have positive associations about the brand or product. A high level of ambiguity regarding the effectiveness of celebrity endorsements indicates that success of such lies in the way the products and brands are promoted and on how well the synergy between the professional player’s perceived status and the promoted brand is. A further analysis about the younger demographic of 16 to 24-year-olds which consider themselves gamers and which also consider professional players celebrities indicates a rather weak brand of those ‘celebrity players’ as figure 13 illustrates.

Figure 13: Influence of professional players on buying decisions of 16 to 24-year-olds

In comparison to traditional sports in which, for instance, star players like Michael Jordan or Cristiano Ronaldo wear selected shoes have significant influence on young people’s buying decision on these kind of shoes professional eSport athletes do not exhibit the same level of influence in terms of the buying decision of gaming equipment. This might either be due to eSport athletes not yet having strong brands available to them or the used demographic of 16 to 24-year-olds not classifying as the described young demographic by Atkin and Block (1983) and Stevens et al. (2003) and therefore not exhibiting the same extent of professional players being role models.

5. Conclusion

Concluding and answering the research question of whether eSports live broadcast is an appealing media for business-to-consumer communications or not, the findings of the research suggest that it is to a given extent and also provides data about which ways are more applicable than others. Even though the findings are constrained through the timely-limited accessibility of the survey and thereby failing to obtain data for certain age classes the findings still project a meaningful overview about the viewership and their perceptions. Moreover, statistical data evaluation was only superficially performed using basic statistical evaluation tools and therefore lacking explanatory power and depth. Nonetheless, the study provides a comprehensive first overview about the subject and builds a foundation for future studies in this field. All findings in this research are based on the perceptions and consumption patterns of the viewership and conclusions have been drawn based on the effectiveness of the examined communication instruments from the viewers perspective. The study does not provide insights on the efficiency for companies seeking to use eSport broadcasts as a communication media as it neglected the impact of cost of advertising which needs to be addressed for further research in this field in order to achieve a better understanding of the market.

Findings suggest that as of now, eSports viewership is yet a very specific audience of young males with an unconfirmed potential larger share of female viewers than examined in this study. When investigating the effectiveness of commercials, the study unveiled that commercials are highly reliant on the timing at which they appear during the broadcast. They fail to capture the attention of the broad viewership when shown during the breaks of the broadcast. More viewers can be captured when shown right before actual gameplay is about to start. Moreover, placing repetitive commercials in short succession is a successful strategy to enhance brand recognition while the impact on brand associations of such are ambiguous given the strong negative attitude of viewership towards repetitive commercials. Lastly, the study indicated that external companies, especially ones which operate with low-involvement and fast-moving consumer goods are likely to make great use of eSport broadcasts as an effective

42 communication media. This assumption requires further research in the field and is therefore proposed for further studies.

Product placements are found to be on a par in terms of brand recognition with commercials and therefore a great substitute. Broadcasts offer extensive opportunities for both visual and audible placements which both indicate high effectiveness in this specific market. The effectiveness of visual and audible placements provide another specific area for future research in eSports. Product placements are also a great way to fulfill the objectives of event sponsorships. Other than that, eSport broadcasts are not best suited to communicate the objectives of sponsorships done between external companies and competing teams.

The impact of narratives and media coverage on the status of professional players are found to be highly impactful. Even though eSports are yet considered emerging sports, professional players start to obtain the status of celebrities among their followership. The usage of their status in form of endorsement deals are found to be ambiguous as of now while still indicating that in the future these might become a feasible option given a continuous growth of their own brands and the entire industry.

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Appendix

Online survey and questionnaire

Introduction:

Survey: Esport live broadcast and viewership analysis

Dear participant, thanks for taking time completing this survey. My name is Daniel and I'm a bachelor's undergraduate in International Business Management at Hochschule Furtwangen University in Southern Germany. This survey is for the purpose of my bachelor thesis. Answers provided will be registered anonymously and confidentially and will only be used for data evaluation in the context of my study.

In the following, you will be asked to submit answers about your person and your consumption behaviors and opinions about elected eSport live broadcasts

Note: Esports = professionally-organized, competitive computer gaming (i.e. LCS, ELEAGUE, The International and other majors or Overwatch League)

When answering, please consider live broadcasts only (excluding watching VODs)

Personal data:

Please provide some data about your person below. You can only select one answer per question

What is your gender?

О Male О Female

How old are you?

О <16 years О 16-18 years О 19-24 years О 25-30 years О 31-40 years О >40 years

Which of the following eSport title are you most interested in?

О League of Legends О Counter Strike: Global Offensive О Overwatch О Dota 2

How many hours per week do you spend watching live broadcasts of your favorite eSport title?

О <1 hour О 1-3 hours О 3-5 hours О >5 hours

Part I:

Please provide your opinion about the following statements.

1. I strongly disagree 2. I disagree 3. I neither disagree nor agree 4. I agree 5. I strongly agree

I consider myself as a gamer or gaming enthusiast.