Roundtable debate: The rise of gaming as a major new media channel

Roundtable debate: The rise of gaming as a major new media channel

To set the scene for Mediatel’s Future of Gaming event, Steven Scaffardi speaks to five experts to assess the opportunities and risks for advertisers eyeing up a rapidly evolving market

Steven Scaffardi (Chair):
Hello everyone and welcome to the fourth round table special on Mediatel News as part of our exciting new series of fortnightly digital experiences.

This week we are discussing gaming and esports and joining the debate today is Meredith Worrilow (Global Business Marketing, Measurement, and Insights Director at Activision Blizzard), Hendrik Menz (Brand & Agency Sales Director at Anzu.io), Lewis Sherlock (CRO at Bidstack), Will McMahon (Senior Video Strategy Director at Spark Foundry UK) and Fran Cowan (Director of Advertiser Marketing at Twitch).

Gaming and esports has grown at an incredible rate in the last few years to the point where gaming is now bigger in the UK than the music and film industries combined. What is the reason for this rapid growth?

Hendrik Menz: Games have played an essential part in human culture since before there was speech. Playing is one of the oldest forms of communication and video games, which essentially are just another form of play, have had a tremendous impact on our modern world.

Back in the eighties and nineties, technical skill was required just to install and set up video games for playing. Today, mobile games are intuitive enough for toddlers.

On top of that, older generations are embracing gaming more and more, especially casual puzzle and logic games. The younger generations, who were born into a world where videogames are a central part of entertainment, consider gaming a fact of life. So the potential is literally endless.

Meredith Worrilow: In today’s world people are using entertainment as a social anchor, providing both connection and respite. It’s this duality that makes gaming so appealing. People can choose an independent experience or connect through cooperation or competition.

Moreover, gaming isn’t just fun, it provides a sense of purpose and achievement. This is one of the reasons gaming attracts such a wide and diverse audience.

Fran Cowan: Gaming has always been more mainstream than most people know. In the UK there are over 16 million people who identify as a gamer. So, it’s not surprising that gaming is such a huge global industry, fueled and sustained by various factors from the genuine passion for gaming as a hobby to the retro gaming nostalgia trend, increases in smartphone usage to bandwidth improvements and cloud gaming solutions to name but a few.

One huge factor is the massive growth in online multiplayer games which bring the opportunity to connect and build virtual friendships as well as playing with real life friends.

Steven Scaffardi (Chair): So how much bigger can gaming really get?

Will McMahon: Gaming will continue to grow, with current forecasts at $196 billion in global revenue annually – a 63% growth in revenue from $120 billion in 2018. This is no great surprise as Apple and Google both launched gaming services last year, alongside Facebook and YouTube, who have been active in this space for a while, and are also ramping up activity with the likes of the recently launched Facebook Gaming.

Amazon (owners of gaming streaming giant Twitch) just released their first video game too. Just like we’re seeing with the video streaming wars, there’s a race to compete in this space due to its potential for growth.

Lewis Sherlock: Quantifying how much bigger the industry is difficult because there are so many factors at play. If we look at the current situation, no one could have anticipated the effect of the coronavirus but the situation has taken gaming to a new level and attracted entirely new audiences to the phenomena.

The future growth of the industry will depend upon the creativity of game developers, how the technology will evolve, the competition between some of the world’s biggest tech companies and how the industry reacts to change.

Steven Scaffardi (Chair): There is generally a misconception about the gaming audience. Who are gamers, what do we know about them, and do outsiders have preconceived ideas?

Fran Cowan: Pretty much everyone’s a gamer – whether it’s playing Candy Crush or Words with Friends on the commute or playing Fortnite with thousands of viewers on Twitch. There’s definitely a preconception that gamers are all teenage boys who don’t do anything but gaming, but almost a third of the Twitch audience is female. Our audience is predominantly aged 13-35, globally minded, very tech savvy and social.

Lewis Sherlock: A gamer can’t be bucketed into one single profile and that was demonstrated really well when Newzoo released an insights report in February 2020 that segments gamers into 3 profiles: The Ultimate Gamer, The Popcorn Gamer and The Time Filler.

The Ultimate Gamer lives and breathes all aspects of gaming from playing to owning to viewing gaming content online, the Popcorn Gamer plays games on a more casual basis and tends to be a spectator of gaming content, and Time Fillers are casual gamers that play games to pass the time.

Read the full breakdown of gamers in this report.

Meredith Worrilow: The gaming audience is much more diverse than many people realize. There is a common misconception, and outdated stereotype, that gamers are teenage boys playing games in their parents basements.

The reality is that games are loved by everyone – from your siblings to your moms to your grandparents. The gaming audience is just as diverse as any other entertainment medium. We recently conducted research into gamer mums across the US, UK, France and Germany, and found that over two thirds of mums engage with video games. And of those, 90% are playing mobile games at least weekly, and about 75% are playing mobile games daily.

This research confirmed for us something that we had long known to be true about our audience but which many within the wider industry were not fully aware of.

Will McMahon: Roughly one in three people is a gamer of some form or another, so it’s not as simple as saying that it’s just 15-34 men anymore. Even if every single 15-34 male in the UK were a gamer, we’d still need to find another 14 million gamers to make those figures work. The demographic that’s really grown in recent years is 25-54 year old women who were fairly under-represented in the gaming world previously.

What’s pushed this inclusion of new demographics is in-app gaming which is driving a significant amount of growth within the sector. What this does mean, however, is that different types of games are generally more appealing to different demographics. I wouldn’t base an entire campaign around this as, even though 65% of console gamers are men, that means that the remaining 35% aren’t men and a campaign solely targeted at men may not appeal. So depending on your brand there is likely a relevant category of gaming for your audience.

Hendrick Menz: For many years, the stigma of the young male introvert playing alone in their basement stood strong. Those days are long gone. Gaming is now mainstream across gender, age, and culture. The medium has actually become one of the very few areas in life with next to no predominant prejudice and exclusion, thanks to its universal accessibility.

Despite coming from such different backgrounds, today’s gamers share the same passions and ideas. If we include casual gamers that play at least once a month into the equation, every third person on the planet plays. So who is the outsider here?

Steven Scaffardi (Chair): Gaming is not passive – like some TV, or radio, or OOH etc. It’s mentally very involved. Does this mean it offers something for brands that other channels can’t?

Will McMahon: Part of what makes Facebook so compelling is the attention their platform brings to ads. Sure, a post is only viewed for 1.7 seconds on average, but that’s still 1.7 seconds of pure, focused, attention in an ecosystem where attention is scarce. Gaming offers a similar potential to tap into a truly engaged audience and that could be immensely powerful for brands.

The problem is with how these opportunities are weaved into games. TV, print and radio are all massive as they insert spots between content. If gaming wants to drive the same attention levels as Facebook then there needs to be a mechanism that allows brands to advertise while players are playing without interrupting the game.

If this sounds a bit like product placement then I guess that’s what I’m heading towards. Unfortunately, this requires creative builds and chunky investment meaning that it won’t be likely to scale in the same way as is possible with TV.

Lewis Sherlock: Gaming is a form of interactive entertainment. It requires the players to interact with the content within the game and that means we see far higher levels of engagement and far lower levels of split screening than other media channels. We recently did a brand uplift study on a leading automotive brand and one of the key findings was that native in-game advertising generated 3.2 times more attention than some of the more established digital channels – desktop display, mobile display and social media to name a few.

Gaming is also a great way to socialize and gamers connect with their friends online and play against each other or complete missions together. Because of this social dimension, games deliver a level of immersion that isn’t common with other media channels. From a brand point of view, this creates an opportunity that is brand safe, relevant, unintrusive and offers much higher exposure times and better brand uplift than other channels.

Meredith Worrilow: Opt-in-rewarded video is one ad format that fits naturally into the gaming experience, giving players choice and rewarding them for their time via in-game boosters. This enhances the gameplay experience for the user and creates a powerful connection between brands and consumers while delivering high engagement and strong results for advertisers.

Fran Cowan: Gaming is a very lean in experience, whether playing or watching, so if done right, advertisers have an opportunity to really engage the gaming community. The opportunities for integrated programs with streamers is a really exciting space.

Hendrick Menz: The unique immersive nature of gaming means that gamers are always paying close attention to every detail on the screen. If you look away, you lose. Compared to any other audiovisual medium, which can easily be viewed in a multi-tasking environment, gaming is the only one where there will never be a “second screen.” So advertisers can be confident they have the gamers’ attention.

I believe that with this fact also comes an important responsibility. Ads must not intrude violently into this highly involved space and ruin the user experience. This would cause negative sentiment in the recipient and therefore be counterproductive to what brands are looking to achieve. That is why Anzu exclusively offers non-disruptive formats that enhance the user experience by adding realism to the game.

After all, we are used to seeing ads in certain places like billboards in the street or around a football pitch. When the ads are relevant to the user, thanks to programmatic targeting, we can create a mutually beneficial relationship between the audience and brands.

Steven Scaffardi (Chair): This has been a really insightful deep-dive into gaming. My last question is this – for any brand wanting to get involved in gaming or esports, what is the single most important piece of advice you would give to them to make sure they do it right?

Fran Cowan: Respect the community – they are smart and they know why you’re there. They are more than happy to lean in and interact with brands so long as you are upfront, engage and entertain.

Meredith Worrilow: Authenticity is key. We ensure that any advertising experience in our products, from mobile games such as Candy Crush to our esports properties such as Overwatch League, is integrated carefully and with respect to both the game and the audience experience. Gamers are passionate and highly engaged, and this should be top of mind for brands when thinking about how best to interact with the gaming audience.

The key for brands is to choose the right partner and the right context to share their message. Advertising should be integrated into gameplay in a way that is additive to the audience experience, which delivers both a positive experience for fans and more effective results for brands.

Hendrik Menz: As in all marketing disciplines, there is never an easy answer. So my advice would have to be to find the right creative approach for your brand that benefits your target audience. You can do this by providing your audiences with relevant product information or at least some fun and entertainment.

This combination will allow you to win the recognition and respect of the consumer. Gaming audiences are smarter and therefore more sensitive to non-authentic advertising. In gaming, you need to engage in a long-term relationship with the gamers, not a one-night stand. But when you manage to win their affection, gamers are the most loyal and generous customers a brand can get.

Lewis Sherlock: Respect the gaming community and respect the games you are serving ads into. Many gamers use gaming as a vessel for escapism, so any object, structure or disruptive mechanism that doesn’t look right within a game can disrupt the experience and intrude upon it.

It is well documented that inauthentic advertising in the gaming and esports space is not well received and gamers can turn off completely from clumsy or aggressive advertising tactics. Because of this, game developers are rightly protective of their titles. They spend countless hours crafting their artwork and our aim is to deliver ads into their gaming environments that enhance the realism of the gameplay and don’t encroach upon a gamer’s experience.

An authentic and well-executed in-game activation goes a long way to appeasing gamers concerned by advertising. Wendy’s are a well-publicised example thanks to the value they added for gamers in Fortnite. Their innovative campaign was also recognised within the advertising and they won the 2019 Cannes Lion Grand Prix. During the COVID-19 outbreak, organisations such as the UK government turned to companies like Bidstack and Codemasters to deliver important public safety messages such as ‘Stay Home, Save Lives to the gaming audience. This activation received widespread coverage and acclaim from gamers and the media alike.

Will McMahon: If you don’t think you understand gamers, that’s ok. Whichever gaming platform you want to work with certainly will, so lean on their understanding of the audience which they’ve painstakingly built over the years. In time, gamers may even accept advertising commonly and expect to see video or display ads as part of the gaming experience – does anyone remember the first ads on Instagram? People hated them and look at where we are now.

In the meantime, any brand that’s looking to explore new platforms should take the time to do it properly and think through what they’re trying to say and how they’re trying to say it. That’s pretty obvious but sometimes in the rush to do something new, the basics can be forgotten.

Join Mediatel on 28 May for The Future of Gaming, a free lockdown event where we speak to the brands, tech platforms and agencies investing in gaming and eSports to discover the potential of this new media channel.

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