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As sports enter the metaverse, could brands win big?

By Hannah Thompson | Group Media Director

Tug Agency

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The Drum Network article

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July 20, 2022 | 8 min read

The metaverse is the marketing industry’s current favorite repository of dreams, as brands and their agencies alike continue to hope that it will bring transformative possibilities in every sector. For The Drum’s Sports Marketing Deep Dive, Hannah Thompson, group media director at agency Tug, tells us that sport is no different: hopes of major transformation are real, and supported by genuinely exciting developments. But smart brands will proceed gradually.

Settling down in your living room to watch football on a virtual TV screen is the very definition of ‘meta.’ It’s also increasingly looking like the future of sports viewing. Metaverse buzz is going beyond hype, with sports activations driving predictions of lucrative possibilities ahead for broadcasters, streaming platforms and brands.

Digitized events such as the Roblox Lil Nas X concert have sparked enthusiasm that’s blazing across sports teams and clubs globally. This year alone, we’ve seen the Atlanta Braves recruit Epic Games to virtually recreate the Truist Park stadium; Manchester City unveil similar plans for the Etihad football grounds; and AC Milan test out immersive broadcasting. Combined with the already-escalating popularity of esports, the potential for greater engagement across online fan bases is rising fast. But how should brands be tapping into it?

A man with a videogame controller lying down on a sports court

Sports x metaverse: what’s the brand opportunity? / Martin Sanchez via Unsplash

As sports makes its big metaverse entrance, securing major wins off the bat will require smart plays. Brands must understand the likely evolutions from existing sponsorship, in-game advertising and collaborative approaches, and be ready to strike strategically.

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Sponsorship and Red Bull: it’s all about value

When we think of sports sponsorships, one brand springs to mind: Red Bull. Since its first player partnership in 1989, the energy drinks giant has become a big name in Formula One (including the Red Bull Racing team) in a range of sports from motocross to tennis. It has also taken the lead on esports, sponsoring Halo player David ‘Walshy’ Walsh in the mid-2000s and now working with outfits such as Dota 2’s OG.

Red Bull’s mega-sponsor status isn’t just down to being prolifically present. In addition to kitting out teams with logo-emblazoned items, Red Bull brings something different by making itself part of each scene. With esports, that entails running tournaments, training and livestreams from the Red Bull Gaming Sphere, and hosting events such as Red Bull Kumite.

This is the lesson for brands hoping to drive fan engagement in the virtual realm: to capture hearts and minds, offer genuinely valuable experiences.

As a starting point, putting on virtual matches gives brands the chance to be the facilitators of shared sporting moments, creating strong associations between their brand and much-loved teams. With recent technological advances, there’s also growing scope to provide added-value extras, such as multi-view cameras that enable fans to roam sports fields and courts, and personal sports hubs. See, for example, ‘fan caves’ in SportsIcon’s Sports Metaverse, where users can watch games with friends and enjoy virtual player interactions.

But don’t overlook the value of tailored promotional messages. Among the best examples of a smooth virtual transition is programmatic perimeter advertising. Powered by augmented reality (AR), this approach is already used in live sports to instantly switch ad overlays for in-stadium hoardings or billboards according to viewer location, weather conditions and real-time action. As sports streams shift to new virtual homes, such targeting has the capacity to help brands ensure greater relevance and deeper fan resonance.

Shrewd brand placement

Sponsored deals aren’t the only way for brands to gain wider exposure among sports audiences. As mainstream adoption of gaming and esports has grown, more opportunities have emerged for integrated ads and branded collaborations across virtual environments.

The prime native in-game ad example is Fifa’s move to launch its own programmatic bidding platform, which allows access to in-game ad space for an array of buyers. Meanwhile, soaring commercial interest hasn’t gone unnoticed by esports platforms. The likes of Fortnite and Roblox have seized demand for reach across their sizeable and passionate user bases. Fortnite has introduced a slew of limited collections, branded items and product experiences from Nike, Ferrari, Balenciaga and, most recently, Timberland.

Often described as mini metaverses or islands, esports platforms are setting the blueprint for interactive and immersive branded spaces inside their walls. In the future, we can expect further development to break down these barriers and enhance accessibility. Once users can travel across virtual worlds seamlessly, there will be more room for small and medium-sized brands to invest in campaigns and virtual products that give them wider traction.

For now, though, efforts typically center on driving upper-funnel awareness for a limited time; and come from companies with already substantial footprints and budgets. Brands will need shrewd strategies, using activations to complement multi-channel promotions, instead of stand-alone efforts. For instance, brands may primarily direct spend at linear TV and live sports streams where they can capture the most eyeballs, with one-off virtual experiences used to amplify messages and bring products to virtual life.

As some metaverse dreams become reality, there are high hopes for benefits to sports leaders, platforms and brands. Considered implementation is vital. Maintaining a close eye on initial opportunities and maximizing user value will be key, as will smart applications at the right time to enhance impact. Brands need to keep their heads and focus on carefully-calculated short-term steps before diving in.

Check out The Drum’s latest Deep Dive, The New Sports Marketing Playbook, and learn the tactics employed by the world’s biggest sports organizations and their star athletes to stay at the top of their game.

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