Nielsen launches Esports valuation business

BI Intelligence

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Nielsen announced the launch of a new unit called Nielsen Esports, which will offer sponsorship valuation, industry research, and consulting services to industry stakeholders.

The Esports unit will release global fan insights in select countries, including the US and UK. Nielsen also created an advisory board with members including ESPN, Facebook, and YouTube as a part of the new vertical. The Esports unit builds on Nielsen’s Esport24, which measures brand exposure in tournaments.

The Esports industry is showing promising growth. Goldman Sachs values the market at around $500 million and expects it to grow at a compound annual growth rate (CAGR) of 22% through 2019, to surpass $1.1 billion. Nielsen’s decision to launch an Esports dedicated vertical positions it to capture a piece of the growing Esports market, and has important implications for the industry, brands, and advertisers:

• It helps further solidify Esports as a legitimate, mainstream sport. Nielsen’s decision to launch a standalone business unit — and not just additional Esports services — could signify it views Esports as a legitimate industry and not just a temporary trend. Another indication of Esports creeping into the mainstream is that it’s in consideration to be a medal event for the 2024 Olympics.
• Reliable measurement service can help ensure brands aren’t overspending for event sponsorships. The playoff rounds of major 2017 Esports tournaments generated between $17,000 and $17 million in sponsorship revenue, according to Nielsen. The large range indicates the importance of having reliable metrics for brands — proving sufficient ROI for events. Brands may measure ROI by comparing their sponsorship valuation to the amount invested in the sponsorship.
• Advertisers gain a new channel to reach millennials. Men and women between the ages of 21 and 35 are the primary viewers of Esports, and make up 53% of total viewership, according to LEK cited by Mary Meeker. This represents roughly 157 million millennials, and BI Intelligence estimates the global Esports audience will reach 296 million by the end of this year.
• And all of these factors can help boost Esports ad spend. Nielsen’s bread and butter of providing analytics to more accurately measure reach can help drive the growth of broadcast revenues. Additionally, big advertisers have seen Esports sponsorship success in the past — Audi received over a 10x return on sponsorship exposure during the ELEAGUE Finals and DreamHack Las Vegas earlier this year.

Robert Elder, research analyst for BI Intelligence, Business Insider's premium research service, has compiled an unparalleled report on the Esports ecosystem that illuminates the business of Esports from four angles:

• The gaming nucleus of Esports, including an overview of popular esport genres and games; the influence of game publishers, and the spectrum of strategies they adopt toward their respective esport scenes; the role of Esports event producers and the tournaments they operate.
• The Esports audience profile, its size, global reach, and demographic, psychographic, and behavioral attributes; the underlying factors driving its growth; why they are an attractive target for brands and broadcasters; and the significant audience and commercial crossover with traditional sports.
• Esports media broadcasters, including digital avant-garde like Twitch and YouTube, newer digital entrants like Facebook and traditional media outlets like Turner’s TBS Network, ESPN, and Canal Plus; their strategies and successes in this space; and the virtual reality opportunity.
• Esports market economics, with a market sizing, growth forecasts, and regional analyses; an evaluation of the Esports spectacle and its revenue generators, some of which are idiosyncratic to this industry; strategic planning for brand marketers, with case studies; and an exploration of the infinite dynamism and immense potential of the Esports economy.

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