By Christina Settimi (Forbes)
BMW is making a monumental shift in its global marketing budget with a move into esports that it hopes will lead to mind share among the next generation of consumers.
The luxury German carmaker unveiled a partnership it formed with five gaming organizations—Cloud9 in the United States, Fnatic in the United Kingdom, FunPlus Phoenix in China, G2 Esports in Germany and T1 in South Korea—with the goal of capturing eyeballs glued to video game competitions in titles like League of Legends, DOTA 2, Fortnite and FIFA.
“In the long-term esports will be our biggest footprint,” says Stefan Ponikva, head of BMW Brand Experience Shows & Events, adding that esports will eventually eclipse spending on sports such as motorsports and golf. “The younger generation, being born digital first, doesn’t really care about TV or traditional advertising. Esports is our tool to reach them.”
Video game competitions reach a global audience of 454 million, with at least 190 million more expected to be watching in three years, per industry analysts Newzoo. The vast majority of them are millennial-aged and younger and favor streaming platforms like Twitch, YouTube and Mixer over traditional television, an attractive target the 104-year-old automaker aims to use to buttress its $29.8 billion brand.
BMW first dipped its toe into video game competitions in 2017 when it sponsored the European Championship Series Summer Finals for Riot Games’ League of Legends. LOL is one of the world’s most popular esports titles, with eight million simultaneous players daily; its 2019 World Championship Final between FunPlus and G2 in November attracted an audience of more than 100 million.
The five esports organizations that BMW partnered with also have massive engagement and reach on social media, with a combined 8.1 million followers across Twitter, YouTube and Instagram—11 times as many as BMW across the same channels. As part of the partnerships, the teams will challenge one another prior to tournaments, using a campaign motto “United in Rivalry” as a hashtag on social media and streaming platforms.
“We will not be holding hands,” says Carlos “Ocelote” Rodriguez, CEO and co-owner of G2 Esports. “We’ll be butting heads.”
The BMW marketing push was announced as the coronavirus lockdowns have turned the spotlight on esports, which has supplanted more traditional sports on networks like ESPN that have found themselves with a dearth of programming as leagues shut down.
That’s been a plus for esports organizations, with G2 alone seeing a 30% increase in engagement and reach among fans across its various content platforms and social media. In December, billionaire Joseph Tsai, an Alibaba cofounder and the owner of the Brooklyn Nets, made a $10 million investment in G2 to become a minority owner. G2 is worth $165 million, according to Forbes’ most recent valuation, up 57% from the prior year based on $22 million in annual revenue.
BMW began discussions with the teams last year, eventually signing each of them to individual deals. G2’s Rodriguez said that his team has a three-year deal and that he was unaware of the specifics of any other organization’s deal.
The carmaker didn’t disclose the terms, but a year ago it took team sponsorship for a test drive, signing an initial deal with Cloud9, the most valuable company in esports, worth $400 million on revenue of $29 million in 2019. Based on information collected to compile that valuation last fall, Forbes estimates BMW will pay each team a low-seven-digits figure annually, making it a top spending partner in esports.
BMW’s Ponivka explained that funding for this partnership would not be at the expense of any one marketing-budget line item. Instead, the company was looking to decrease its footprint in certain experiential marketing areas, like trade shows and live events, and reallocating that money toward esports.
On top of social media and content collaborations, BMW will be given real estate on each team’s jerseys and will provide each organization with a fleet of customized team-branded vehicles to ferry players to events. Additionally, the company will lend its German engineering to the esports organizations to help design hardware and software products for gamers’ future needs.
With car ownership still far away from the minds of the automaker’s consumer target, Ponikva admits the payoff to all this may be a long time coming.
“When it is time, we know we will have given them a reason to love BMW,” he says. “And we will be the first brand to pop to their mind.”