State of the agencies in esports 2020

I spend more than 10 years in different communication agencies from independent digital to the network PR service providers. Most of our times we were supporting clients like Coca-Cola or Microsoft with communication strategy, creative activations & management. Pioneering social media advertising, mobile development & viral videos. Esports agencies are quite different.

Esports clients weren't created equal.

There's a big trend within corporations - marketing automation. With the help of MarTech from Nestle to Mazda leaders trying to cut costs on agencies & workforce management. 2 years ago a senior executive from Google told me that they believe: agencies will be dead in current form & clients will manage the majority of the work by themselves. Esports is already doing this:

• Lots of esports organizations manage strategy, creativity & content production for their partners
• League operators manage the majority of marketing activations of their sponsors.

Why it's happening?

1. The market is still under development. The majority of organizations aren't profitable, so they are trying to provide full services (even if they aren't really strong in marketing). Every day hundreds of branded content pop-up within esports players and it's quality is highly questionable.
2. Former pro-players or managers become marketing geniuses. It's great to think carefully about how to engage ex-players into esports operations, but hard skills are crucial with esports marketing. The experienced classical strategist should be responsible for the strategy & copywriters with solid advertising background.
3. Network agencies lack esports competences. It's really questionable if an agency has to have an esports background to make an effective advertising campaign in esports. There was enough time for esports professionals to prove the opposite, but our The Esports Ads research shown that industry can't produce breakthrough creativity.

One of the most interesting esports case studies made by full-service agency Ehrenstr?hle for Lenovo: click.

Many people think that esports organizations & advertisers (both endemic & non-endemic) are equals as "the clients". But it's not true. Examples:

• Natus Vincere organization collaborates with Winstrike Holding that acts as their sales house & and an agency, but Na'Vi is responsible for all created in-house.
• Level99 agency works with the NY Excelsior team & both non-endemic brands.
• Hurrah agency prefers to concentrate their efforts on FMCG brands, endemic brands like HP or Logitech, automotive (like Renault) & publishers
• Mediapro (Spanish LVP league operator) deals with sponsors by themselves covering everything from strategy to influencer relations internally.

Consultants disease

Paul "Redeye" Chaloner recently mentioned "absurd claim" on Twitter of Joshua Swedrlow stating in a clickbait article "How I invented eSports and why should be making money from it". It's one of the thousands of communication messages that spread within the globe from so-called esports experts that act as a one-man army. Consultants claim that they could help businesses build solid esports presence & benefit from the hype. The result: lots of unsuccessful cases done by non-esports people around the globe, disappointed advertisers & failed investments.

Why it's happening?

1. The market is betting on money. Everyone from Newzoo to The Esports Observer highlights enormous money in esports from The International prize pool to investment deals. Suddenly, esports is in the spotlight of corporations like Deloitte or Goldman Sachs. Investors, corporations, governments & executives are discovering potential new revenue streams.
2. Easy entry point. Esports is still at the beginning of industrial maturity. Think over esports executive search online - it's painful to search & compare professionals. Even industry insiders couldn't tell who's the best esports marketing professional/agency, how clients should select candidates, what case studies are the best in the world (from efficiency & creativity perspective). So new people get into the market easily: from copywriters to business executives.
3. There's no KPI matrix. Ask agencies or esports orgs how they measure the impact on their clients' sales? You will be really surprised. That's why Twitch or Nielsen doesn't want to cheer for transparent marketing metrics & prove that esports could deliver significant sales to the companies beyond betting or endemic performance campaigns.

The market is now divided into 2 camps: old school cheering for its genuine esports brotherhood & new school trying to disrupt the existing community. And it's not a question who's the best & who's the worst. Esports professionals should ask themselves: how to create healthy competition when clients & agencies/consultants measure efficiency within the same business metrics? That's when:

• Business cases culture will be established
• More unique agencies or consultants will pop-up at the market (niche, specific, tech-driven)
• Hate speech towards consultants & old-school community will decrease
• Different companies/consultants will help each other in order to build a mature market

And finally, everyone will stop pretending that they are good at everything from strategy to key visual production. The market will be divided into full-service & niche agencies. There will be a synergy between different players executing campings together.

What awaits us in the future.

Great competition between esports orgs, network, esports & independent agencies for the marketing budgets. We all know that big corporations dedicate a hilariously small part of their budget to esports. That's why competition is so intense & it highly risks to make an esports agency right now.

But there are several interesting strategies that agencies could take:

• Become a Gen Z agency. That's what Jung von Matt is doing - made a new unit dedicated to a new consumer lifestyle from Tik Tok to esports. Helping corporations understand Gen Z mentality & the changing landscape of digital creativity.
• Become a Network agency unit. Network agencies like BBDO will buy esports dedicated agencies & integrate them into the network client's pipeline. It's cheaper & faster than build own esports unit from scratch. It already happened with the digital agencies' absorption.
• Become an Innovation agency. That's our The Moon Esports way. To go beyond advertisers & esports organizations. Dedicate our efforts to create new business models & new products (like IDEO, but for esports) - help industry to build infrastructure for scale (like The Esports Ads). Where strategy & creativity could blossom.

Nobody knows how esports will look in the future. Digitalized like InStreamly that automates advertising on multiple streams or DIY like OG cinderella story?! But what we could tell for sure: it will be an integral part of the entertainment industry & pop-culture. Esports will be on Netflix. Streamers will make Billboard chart hits. But still leaving under the Video games shadow.

Now esports is a really challenging industry. It's time to move to another level. And it's not possible to achieve its full potential without collaboration, support & transparency from different market players.

And what's your opinion about the future of esports agencies?