Analysts predict esports should be a very big business in the future, and it is already amassing huge audiences. Brands and advertisers want to dive into it, but first the business has to be properly measured and understood.
And that’s the job of Nicole Pike, the managing director of Nielsen’s global esports business. I spoke with her about the challenges of properly measuring esports audiences for brands and advertising clients, and understanding the unique nature of esports fans. We talked about the trends and the hype.
Pike is going to be a speaker at the upcoming Esports BAR Miami event on October 1 to October 4. She has been following the game industry for a dozen years and in the past few years she has been consulting with key players in the sports business and measuring the impact of sponsorship campaigns with esports audiences.
Here’s an edited transcript of our interview.
GamesBeat: When did you start getting focused on esports yourself?
Nicole Pike: I’ve been in the gaming research and consulting space for going on 11 or 12 years now. As esports grew in terms of its influence in the gaming space, I started to get more involved through all the gaming clients we’ve worked with. As they were looking at esports and what their strategy around it was, my team helped to provide them with data and research on fans, helping to look at some initial strategy.
Nielsen, in mid-2017, decided to form a dedicated esports vertical that went deeper into the subject matter and really built a team that was 100 percent dedicated to working on esports across research and the sponsorship and measurement side of things. That’s when I started leading our global esports practice here.
GamesBeat: Those 11-12 years, was that all as an analyst at Nielsen, or were you in other roles?
Pike: I started out in more of an analytical role. The crack that I helped to start in Nielsen around gaming—it started out being driven by consumer survey research. We started out with a lot of work with gaming clients around the launch of new games and gaming products like consoles, peripherals, that kind of thing. Both in terms of understanding consumer appeal and helping forecast sales, as well as helping them determine what to communicate about the products they’re offering and how to target fans. It was very specific to fans and new product initiatives, and very deep in the survey side of things.
From there we built a bridge into the same type of data in esports, and then supplemented that with a focus specifically around the sponsorship angle of esports, bringing in a lot of what our Nielsen sports practice does in the traditional sports space.
GamesBeat: How would you describe Nielsen’s main interest? Is it measuring the space in terms of brands and sponsorship and advertising in order to enable advertising commerce to happen? Or would you describe it in a different way?
Pike: That’s a good description of a big part of what we do, or maybe even one step higher in terms of our overall initiative and mission and why we felt like Nielsen had a place in esports. We want to provide trusted data and measurements coming from a trusted third party in the esports space, to help companies, players, and investors across the ecosystem make smart decisions about how and if they should become involved in esports, and be able to measure how effective those decisions are.
With that in mind, a big part of it is, like you said, the brands and advertising element of things, looking at sponsorship and advertising investments. Measuring and providing data and information to inform the right decisions before they happen. But also we do a lot of work and research on the esports fan to help understand who they are and why they’re engaged with esports, which ultimately in a lot of ways ends up tying to that first goal, which is to provide more data and insight into the who, so that people make the right decisions about how to play in the space.
GamesBeat: Was it different in some way in terms of coming up with the right things to measure, compared to other kinds of media? Nielsen pioneered a lot of surveys for television watching. I don’t know if this is drastically different from what used to happen.
Pike: Part of it touches on the fact that there are a number of different parts and groups within Nielsen who measure different parts of the sponsorship and media ecosystem. You’re right on the traditional media and advertising side of things. Esports is a very different model in terms of it being digitally driven, high ad blocker usage rates. When digital ads are served they’re sometimes not received by the viewer. That landscape is very different.
However, on the sponsorship side of things, like I mentioned, our sports business does a lot of work tracking and measuring brand exposure from a sponsorship standpoint within the broadcast environment for live sports events, on social media, that sort of thing. That type of methodology, even if it’s mostly on digital versus linear TV for traditional sports, is actually very similar at the core in terms of what to measure, the dynamics and components that go into it. Obviously there are different broadcast sources we measure, different types of access that are activated in esports, but foundation of what and how to track is very similar and consistent from traditional sports to esports.
It’s one of the ways that we’ve been able to build a competitive advantage in the esports space. We can use and compare the metrics across sports and esports, which is very similar to how brands are thinking about their investments in esports.
GamesBeat: How many different kinds of reports are you doing? Are you doing them quarterly, or once a year? What’s the cadence?
Pike: That depends on the product and what we’re looking at. From a free white paper standpoint, we’ve generally been doing—we launched our Playbook series, our Nielsen Esports Playbook, not too long after we launched our vertical, in late 2017. Then we expanded that into an Asian version in early 2018. We’ve more or less been averaging one really big thought leadership piece a year that tends to be a combination of fan data and our syndicated sponsorship measurement tool, which is called Esports 24. That tracks a number of different events throughout the course of a calendar year and looks at all the brand exposure that’s happening across the different assets and activations within that broadcast environment.
That’s our big thought leadership piece, but obviously, from a data collection standpoint, we’re collecting data ongoing for the sponsorship side of things throughout the year, as well as running survey work in a number of countries. Generally the surveys are annual, but we pace out the countries and who we’re interviewing when across the course of the year. That ends up being an ongoing data collection process with some other thought leadership pieces we put out to the public. Certainly we do a lot of custom projects and reporting for clients in the background as well.
GamesBeat: It sounds like a lot of this is hard to measure. You have to come with new ways to measure some things.
Pike: Again, it’s been an art and a science. We have the general framework for how we do things, either in traditional sports or in traditional media, and some components of that translate well to esports. There’s actually an advantage in using those, so we have that methodology across.
But yeah, there’s also a lot of complications and idiosyncrasies in esports that make it a bit more complicated. One is just the broadcast dynamics in esports, where you’ll often have—esports content is broadcast globally, number one, so you may have something happening where you can measure and look at brand exposure on Twitch, but it’s on a totally different broadcast environment in China.
That becomes two different sources of data, sometimes different times that things are aired, and then you also have in many cases non-exclusive broadcast rights. The same program could be broadcast in eight different places all over the world. Being able to understand whether those broadcasters are all the same or not, and all the viewership op—obviously there’s potential for overlap in viewers from one source to another. That dynamic itself is extremely complicated, and definitely something that’s different from what traditionally has been the case in sports. We’re starting to see sports move that way as well, with more OTT platforms and so on.
GamesBeat: I’m curious about women in esports, that side of things, and whether you’ve seen anything very interesting happen there. Recently, Riot Games settled their sexual harassment lawsuit with their employees. There’s been a lot of different controversies related to sexism in esports. For someone like Nielsen, does that show up on the radar in some way?
Pike: The biggest way that we’ve looked into or collected data on women in esports tends to be centered around the fans. I certainly think that from a fan standpoint, we’re seeing, year over year, when we look at new entrants into the fanbase, more women are represented, relatively speaking. There’s a higher percentage of women in the newer fanbase than the legacy esports fanbase. That’s exciting. It shows that esports is attracting a more diverse audience over time, though it’s still definitely skewed male.
In terms of sexism and that sort of thing, we’ve certainly, from some survey data we’ve collected, we know it’s top of mind for women, and it’s also something that men recognize is happening. Even through conversations I’ve had across the industry in the past six to nine months, I’m bullish and excited about a lot of people in the industry looking at ways to combat that, and really understanding the value of the female audience, which has been largely untapped. They’re making a concentrated effort to do something about that, both in terms of grabbing the opportunity and running with it, as well as just being good citizens in the esports space.
I also think more and more brands are starting to put that pressure on esports. So many brands these days are concerned about—they want to make sure their investments are supporting diversity and equal play. As more and more brands have the money to spend in this space, and they’re asking about these things, the industry is going to realize it’s important. Ultimately they’ll see the benefit from that and that cycle will continue, which I’m pretty excited to see.
GamesBeat: There was also that Kotaku story about the overhyping of esports that ran recently. People threw out numbers that were just too optimistic. Did you see any fallout from that?
Pike: Within that article, obviously, I was quoted and interviewed. Nielsen’s take on things has always been that we’re here to provide trusted, unbiased data. The clients that have already been working with us come to us for that. I certainly don’t think we saw anything from a client engagement standpoint. If anything, I think people realized, from that article and the discussion that has happened in and out of the industry as a result, the value of a company like Nielsen being in the space and what we can do to provide confidence based on data that’s rooted in the broader entertainment ecosystem.
When we look at esports, it’s one of a lot of different areas of entertainment that Nielsen plays in. We certainly can’t be biased toward esports, because that directly impacts all the other clients we have across the company. We have an obligation not only to the industry, but also to our clients, to make sure that we’re being fair and transparent. The value of that really shows through in some of the conversation that happened based on the Kotaku discussion.
GamesBeat: From your point of view, was there too much optimism, too much hype, or people getting ahead of themselves? Is there some kind of cycle that has gone along with that?
Pike: First of all, I think my take is—certainly as Nielsen has looked at being in the esports space, the pattern and the growth trajectory of esports is very clear in terms of the growing fanbase and how esports is aligned with broader trends in media entertainment, which is going more digital. People want more choice. They want to be more interactive with their media content. From that standpoint, I certainly don’t think that the momentum that people are seeing and the growth people are seeing out of esports is inaccurate or misrepresented at all.
In terms of the actual numbers around the industry and things like that, Nielsen hasn’t ourselves put out any specific numbers. I have been, in different venues, outspoken about the viewership side of things, using different metrics that are not how other forms of media are talked about and measured. Being compared to the standards of TV measurement, which obviously Nielsen puts out. One of the big things that I really support and take away is making sure that the numbers that are put out—of course, that they’re accurate, but also that they’re being compared in an accurate context to other forms of entertainment, the things that people are putting them up against.
I do think we’ve seen that not happen as much in esports, and it’s been across the ecosystem, across a number of different players. That’s something I advocate for, and I think more and more people across the industry are pushing for it, which is great. It’s going to make everyone a lot more confident in the numbers that are coming out in the space, which is very healthy for the industry in the longer term.
GamesBeat: Are there some stats that you’re most interested in, or that you think people don’t notice as much, that stand out in some way?
Pike: I think of a few things that get me excited, especially when we talk to brands about esports. A lot of times people are looking at the growth of esports and they focus on the western world, the more developed countries, just because that’s where a lot of the news comes from. When people ask if esports growth is going to continue—you see so many countries, and we as Nielsen have a global footprint through so many of our offices around the world.
There are so many countries where esports is just coming on the radar, both from a media consumption standpoint and brands realizing that there’s an opportunity, or wanting to put some money toward it, or they’re actually starting more local or regional initiatives where it makes sense for them to do that. From that standpoint we certainly see a lot of growth potential on that side. Global in general, there are a number of countries around the world where esports is just starting to get momentum, and we’ll continue to see that in a number of other places.
The other thing—we as Nielsen talk to so many brands, and have long-standing relationships with a number of clients. We’re still having conversations with companies that are extremely established, that have been around a long time, that are just starting to look at esports in a more serious way. Another question I get a lot is, “Is the potential, the opportunities, tapped out?” I think there’s still a ton of opportunities to get brands that have just dabbled involved in a deeper way, or even get brands that have not really looked at esports in a major way in terms of their investment in sponsorship and advertising. That’s an exciting thing to think about as well.
GamesBeat: Are there any particular things you’re going to talk about at Esports Bar in Miami?
Pike: What we’ve talked about today foreshadows a lot of it. You mentioned the Kotaku article. There’s a lot of discussion in the industry around transparency in numbers, and the idea of how important data is in esports, in driving the further potential of esports. That’s something the organizers at Esports Bar have asked us to get into a bit more. That’s going to be one of the big things I talk about: what type of data we’ve developed, how we’ve seen that make a meaningful difference for clients, and how, in the longer term, that can be supportive and help the industry, even if it doesn’t always necessarily mean that we’re putting out the biggest numbers. It doesn’t take really big numbers to show effectiveness. We’re going to walk through some cool examples of what success in esports means and how data can show that.
GamesBeat: As far as the measurement space goes, do you feel alone in what you do, or do you feel there’s a group of competitors here that help reinforce these general impressions related to the measurement that happens? Do you get some external reinforcement of your own measurements?
Pike: There are certainly a number of different companies out there that are measuring esports – sometimes in similar ways, sometimes in different ways. The movement toward that is exciting, because three or four years ago, there was very little measurement happening in esports. Just seeing that, seeing brands ask for it, is exciting, and again really helping the industry propel forward.
We certainly see other companies out there where—there’s a couple places where I think we feel like the angle we’re taking is unique compared to the competition out there. One of those is having that true unbiased—we’re in esports, but we’re in just about every other form of media and entertainment out there. That’s unique and different with Nielsen.
We look at ROI and sponsorship effectiveness in a number of different ways. We’re not compartmentalized just in logo measurement or just in large global research studies. One of the reasons clients work with us is because we can do end to end. We can look at all the ways sponsorship affects things, whether it’s through social media, looking at fan conversation, looking at a really cool story around what fans are talking about around specific esports activations and brand partnerships, to understanding the value of logos, piping that into marketing mix modeling, and then layering survey research on top to look at the purchase funnel and how people go from being aware of a logo to buying a product because of esports.
That combination of things is where the story around esports shines. It’s not always going to be the media type with the highest reach, but it’s going to have cool engagement opportunities between fans and brands. You can’t get that from just coming at one component of it. But there’s a lot more to it, and we’re excited to be able to look at all those different aspects for our clients.
GamesBeat: As far as the comparisons people make to traditional sports, it seems like there’s a certain advantage esports have with things like—anybody can aspire to be an esports star. It’s a wider potential base than just physically fit people. But also, it’s got the disadvantage of—the games come and go. They’re not as established as physical sports are. How do you think about that, and whether esports is overcoming some of this or not?
Pike: First of all, I think the aspirational aspect of things is one of the coolest things about esports. It’s one of the reasons fans are so into it. When we do research with fans and ask why they like esports, the number one reason that they follow is consistently because they want to be better gamers themselves. You don’t get that with the majority of people watching the NFL or MLS or whatever it may be. They may have played at one point, but it’s hard for them to get out and play football now.
Gamers of all skill levels are still doing that and watching esports to interplay with that personal gameplay, which is super cool. It makes it feel like you’re a little closer to where that professional is, because you can be playing the same game as them at the same time as them. That doesn’t happen in the traditional sports space at all. I definitely think that’s a cool aspect.
As far as games coming and going, if you look at it strictly through the traditional sports window, it does feel like a challenge. Certainly we talk to a lot of brands that are concerned about that. On the flip side, you can think of it as an opportunity, a really cool aspect of esports. If you look at someone like Twitch building Twitch Rivals, that’s really taken that aspect of things and made an entire model based on that. Twitch Rivals wouldn’t exist if everyone was consistently into the same games. The publishers would have the lease and that would be it. But Twitch Rivals is attracting a ton of viewers, and it’s using that idea of, “A new game is coming in, people are excited about it, let’s get everyone watching it and do something around it.”
One of the things we tell brands is, you certainly have to be comfortable as a brand with change and evolution, but that evolution doesn’t feel weird to fans and gamers. They’re the ones driving that in some ways, because they’re going from one game to the next. That’s what they want to see. If you can be a brand that accepts that and be willing to evolve, that can be a good thing with fans. They’ll see you as relevant. As long as you’re activating in a way that communicates with them and not just jumping on as each new trend hits, but doing it in a way that’s meaningful, that can be a really cool opportunity for brands that fit that model.
Again, it’s not something that the fans are fighting against or they’re frustrated with. They get it. If you, as a sponsor, really want to connect with fans, you just accept that as a part of the industry and find ways to work with it instead of against it.
Disclosure: The organizers are of Esports Bar Miami are paying my way to Miami. Our coverage remains objective.