Nike, AT&T Make Major Investments Into New Esports Partnerships
BY ADAM GROSSMAN
Two major esports sponsorship deals were announced earlier this week that demonstrate the growing investment that companies are making in the industry. The first was Nike’s announcement that it would “supply clothes and shoes to players on all 16 teams” for the League of Legends Pro League in China via a new partnership with Riot Games. The second was the announcement of AT&T’s first esports team partnership with Cloud9 that includes sponsorship of a new weekly video series and communications hub.
Esports has been one of the fastest growing components of the sports industry over the past few years. One of the potential challenges to its continued expansion, however, is the ability for publishers, leagues, and teams to attract large partners. More specifically, rights holders and properties needed to communicate value to companies like Nike and AT&T for competitions, events, and players they had never really considered before.
These new relationships demonstrate the importance of quality and engagement when it comes to presenting and evaluating novel partnerships. Block Six Analytics (B6A) defines quality in our Corporate Asset Valuation Model (CAV) by how a partnership activation enables a company to better achieve its revenue and brand goals.
One key element of determining quality is the fit of different properties’ or rights holders’ audiences to the demographic companies are looking to target in a sponsorship. B6A’s Social Sentiment Analysis Platform (SAP) enables our clients to leverage machine learning to determine demographic breakouts across multiple dimensions. An example of this analysis is detailed below.
Our SAP demographic analysis shows that both AT&T and Nike are able to target a younger and more diverse audience by partnering with Cloud9 and League of Legends, respectively. Both companies have made targeting younger, diverse demographics an important strategic priority. For example, Senior Executive Vice President of Digital, Retail and Care in AT&T’s Entertainment Group Rasesh Patel recently said, ““AT&T does extremely well with more established customers, but we’re trying to attract a younger demographic.”
Engagement with this audience was also a critical factor for both companies in these partnerships. As AT&T Assistant VP/Sponsorships & Experiential Marketing Shiz Suzuki said “Cloud9 stood out among their options among teams for its large, engaged group of supporters. We wanted the team with the crazy passionate fan base, the real folks that just love their team.”
Our clients can use our SAP tool to examine engagement rates, and that is what we do for this post. That analysis is below and demonstrates why both AT&T and Nike were looking at esports to find this “crazy passionate fan base.”
For this type of analysis, it is important to look at both owned and operated accounts as well as earned media conversation. Both League of Legends and Cloud9 have significantly higher levels of engagement than Nike and AT&T in both owned and earned channels. This is tangible evidence that both companies are likely to receive engagement lifts from the “crazy passionate fan base” they are looking to target.
CAV also examines the quantity of impressions in a partnership. Both Nike and AT&T indicated that audience size was important to them in these partnerships. For example, Cloud9’s 17.4 million followers across social platforms appeared to be a significant factor in AT&T’s decision to work with the team.
However, the audience size of Cloud9 is of similar size or smaller than the follower counts of teams in other major professional sports. It is the audience quantity combined with audience quality and engagement that likely drove both Nike and AT&T to these new partnerships. More specifically, the companies have enhanced ability to have impactful interactions with their target audiences at scale.
Understanding this value equation and communicating the results to potential and current partners will be a critical component in an increasingly competitive sports sponsorship industry. The properties that seek out this approach to valuing sports sponsorship are the most likely to maximize revenue growth because they can clearly communicate how their partners can reach the right audience with the right message in the right channel to drive success.