Social Direct Response

Reflections on Gaming Industry’s Post-Boom Era from TwitchCon and EBS

AJ Damiano
AJ Damiano

During my recent trip to TwitchCon and EBS this year, one message rang louder than ever - the good days of fat blank checks and raining VC dollars in the gaming industry are over, and as an industry, it’s time to get serious.

TwitchCon, in its sixth year, drew in the biggest streamers like Ninja, Pokimane, DrLupo, and Shroud.

It was a total who's who of the gaming world. Yet, across the convention was a tempered feeling - layoffs which have rocked the gaming industry for the past six months now have hit home, and esports teams, brands, and advertisers are all looking at the bottom of their funnels to find them, unfortunately, dry as a bone.

Esports Business Summit (EBS) was a three-day gathering that featured brands like LG, Comcast, TikTok, Nintendo, Twitter, and a bunch more - with all of them eyeing Gen Z as their biggest market and using gaming and esports as their secret weapon.

In all my chats with folks from brands, creators, ad agencies, talent agencies, and even charities, one thing was clear: whether it’s influencer sponsorships, esports talent, apparel sales, or raising money for charity, the awareness dollars are drying up, and everyone wants to see results.

Here’s how I found some of the companies adapting their strategies to the changing landscape.

Adopting gaming as a marketing strategy

Gaming industry is now a multi-billion-dollar behemoth.

Companies are actively using it not only to advertise their products but also to create their own in-game content and experiences.

Gaming allows for immersive and interactive marketing, making it more appealing to Gen Z.

The notable presence of industry giants like LG, Nintendo, and TikTok at EBS 2023 showcased that gaming is no longer a fringe interest but a critical marketing channel to reach Gen Z.

Gaming also offers brands a way to create memorable and immersive experiences for Gen Z, who seek a sense of belonging.

Gen Z gamers are finding ways to socialize through a shared interest, and to express themselves in games. They’re also more likely to spend money in the gaming space, as they consider the metaverse an extension of their physical lives.

  • Product placement in video games: Brands like Nike, Coca-Cola, and Audi have all appeared in popular video games, such as Fortnite, FIFA, and Grand Theft Auto. Such exposure allows brands to reach a large and engaged audience in a way that is both organic and immersive. Well known franchises like FIFA are selling in-game advertising on their side-lines and scoreboards.
  • Sponsored in-game content: Brands can also sponsor specific content within video games, such as tournaments, events, or even in-game items. For example, Red Bull sponsored a series of Fortnite tournaments, while Samsung partnered up with Roblox for a music-focused experience that featured virtual guidance from Charli XCX as users dance and create their own pop star personas.
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Image source: Samsung Newsroom

Interacting with the community through influencers

TwitchCon 2023 underlined the importance of real-time community interaction.

Brands that connect directly with the community tend to strike a chord more with Gen Z. It's not just about promoting products but building relationships and trust.

And who can help with community interaction better than influencers?

The Influencer Report” from Morning Consult found that over half of Gen Z consumers considered influencers to be trustworthy. Nearly three-fourths of this generation follow several influencer accounts on social media and 56% have purchased something as a direct result of an influencer’s recommendation.

Brands that partner with influencers to connect with their communities tend to see more positive results.

  • Gymshark: Gymshark, a fitness apparel and accessories brand, has effectively used influencers to build a strong community. The brand enlisted fitness influencers to wear and promote their products, and often reposts customer content on their social media platforms, encouraging an engaged community of fitness enthusiasts.
  • Daniel Wellington: Daniel Wellington, the Swedish watch brand, used Instagram influencers as a central part of their marketing strategy. By gifting watches to influencers and having them share photos with a specific hashtag, they created a sense of community around their brand and exponentially increased their following.
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  • Audible: The Amazon-owned audiobook company, partnered with influencers to promote their service and create a community of book lovers. They encourage influencers to share their personal reading lists and offer promotional codes for their followers, fostering a sense of community through shared literature experiences.

Doubling down on live streaming

With an average of 2.1 million concurrent viewers, TwitchCon 2023 highlighted the dominance of live streaming platforms in capturing attention.

A staggering one in five (20%) Gen Zs spend five hours or more a day on video social media platforms alone.

Live streaming is a natural extension of their online behavior, as it allows them to interact with their favorite influencers, brands, and people with similar interests in real time.

They prefer to buy from brands that they trust and relate to and brands that offer them unique and customized experiences. Live streaming allows them to see the brands, creators, and influencers in a more authentic environment, watch the products in action, ask questions, get recommendations, and receive exclusive deals.

Live streaming isn't just about engagement; it's a profitable marketing avenue.

Brands can sponsor gaming tournaments while influencers who live stream can make money through ads, donations, and subscriptions.

  • Travis Scott's concert on Fortnite: In a revolutionary move that changed the face of live music experiences, rapper Travis Scott held a virtual concert on Fortnite in April 2020. This event attracted over 12.3 million concurrent players, making it the biggest live event in Fortnite's history. The concert resulted in a significant spike in Travis Scott's music streams and Fortnite's popularity.
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Image source: Rolling Stone
  • Twitch Stream Aid 2020: In March 2020, Twitch held a 12-hour charity live stream, Twitch Stream Aid, to raise funds for the World Health Organization’s COVID-19 Solidarity Response Fund. The event featured a host of influencers, celebrities, and musicians, and successfully raised over $2.8 million.
  • Louis Vuitton's Spring/Summer 2021 fashion show: High-end fashion brand Louis Vuitton successfully ventured into live streaming by broadcasting their Spring/Summer 2021 fashion show on YouTube. The live stream attracted millions of viewers around the world and generated significant social media buzz, resulting in increased brand awareness and positive PR for Louis Vuitton.

Prioritizing social over email

According to Hootsuite’s report, 85% of Gen Z consumers use social media to discover new brands and products.

They’re also 59% more likely to follow a brand account than any other age group. Social is more immediate, interactive, and personal.

Brands are adapting to this preference and shifting their communication strategies to be social-first.

  • Take Glossier, a beauty brand that took its first steps on Instagram and now uses the platform to connect with its customers, gather feedback, and even crowdsource innovative product concepts.
  • Fashion Nova is another brand that has mastered the art of social media marketing, particularly on Instagram, by teaming up with influencers and celebrities to showcase their trendy, affordable clothing.
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Graphic source: HBS Digital Initiative
  • Casper, a direct-to-consumer mattress company, has used social media to shake up the traditional mattress industry with super relatable and captivating content across multiple platforms.

20.2% of Gen Z-ers prefer engaging with a brand on social media, more than any other channel.

At TwitchCon and EBS, brands, creators, influencers didn’t want to do more email, but they were keen on getting email-like features on social media platforms.

Consistently, I heard that charities want the ability to opt-in donors to social media DMs.

As they raise substantial funds through influencers on Twitch, they’re always looking for more insights on who is donating, such as social media user handles, as well as the ability to reach these donators again to solicit further donations in the future.

Driving conversions with social direct response

The growing importance of the need for more bottom of the funnel solutions, particularly for influencers, was a key takeaway from both of these events.

Gen Z are more likely to take action after seeing a social media ad than any other generation - 68% of Gen Z said they visited a brand’s website or app after seeing an ad on Instagram, compared to 59% of millennials and 41% of Gen X.

Social media platforms have also made it easier for brands and influencers to monetize their content through features like shoppable posts and in-app purchases.

  • Instagram's checkout feature allows users to purchase products directly from the app, streamlining the shopping experience for customers and reducing steps for brands.
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  • TikTok's in-app purchases have grown big, with its users spending more time and money on the app during and after the pandemic. This creates new opportunities for brands and influencers to promote products through creative and authentic content.
  • YouTube's Super Chat feature, where viewers can pay to have their comments highlighted during a live stream or premier, provides a direct way for viewers to support their favorite creators and also allows for more meaningful interactions between the creator and audience.

Beyond these advertising options, there are a few other, organic direct response tactics that can really appeal to Gen Z users.

  • For one, encouraging them to create and share branded content can boost engagement. Gen Z values authenticity and loves expressing their creativity.
  • Interactive content is another winner. Polls, quizzes, and AR filters can drive engagement and conversions. Gen Z has short attention spans, so these immersive experiences really grab their attention.
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  • Offering discounts, rewards, product recommendations, or free trials when the audience engages with your social media content by liking, commenting, sharing, retweeting helps in  building a loyal and engaged fan base.

Using AI for social automation and responding to DMs or comments

Almost everyone I talked to - brands, creators, and influencers - is trying to use AI to handle the overwhelming number of messages and questions they receive.

Creators and brand social media managers spend a ton of time today reading and responding to comments manually.

Automation can save time, allowing brands and creators to focus on creating better content.

AI-powered responses also guarantee real-time engagement, which is crucial for Gen Z, a generation that craves instant gratification.

Responding quickly is important in general. A study by McKinsey found that 40% of consumers expect brands to respond to questions or complaints within the first hour, and 79% expect a response in the first 24 hours.

There are a few ways brands, creators, and influencers could set up such automations:

  • Sending a text message, product recommendation, reward, or coupon in DM when someone likes, comments, shares, retweets a specific post. The text message can be chosen beforehand by them while setting up the automation or they could let AI, trained on their knowledge base and FAQs, take care of the message’s content.
  • Sending a specific text message in DM when someone comments with a chosen keyword or keyphrase on their posts.
  • Posting a reply to a comment made on their posts. Again, they could choose beforehand what this reply should be or have AI brew up something relevant and post on their behalf.

Platforms like Scrollmark can help you do exactly this.

You can welcome your new followers, reply to mentions with pre-set replies, and even send out special offers when people interact with your posts. It makes social media marketing easier and more fun.

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A popular fitness influencer on Instagram could set up an automation where if someone comments "workout" under their post, the system would automatically send a DM with a link to their latest workout program or a personalized fitness tip.

This provides a timely and relevant response, creating stronger relationships with followers and saving the influencer’s valuable time.

Or a brand can set up actions to respond with a coupon code in a DM whenever someone shares their post, encouraging further engagement and rewarding brand loyalty.

As AI gets smarter, AI-powered responses will also ensure consistency and a human-like feel in engagement in the very near future.

With a pre-defined knowledge base and AI algorithms handling responses, your followers on social will get a similar and consistent engagement regardless of the time or day.

Integrating social with CRM

Lots of brands, creators, influencers, AND charities are struggling to gather and make sense of the engagement data from their social media.

Integrating social media with CRM or having a social-first CRM can provide a quicker and more personalized engagement and customer service on social media, which is where Gen Z spends most of their time online.

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  • Activision rocked their Call of Duty: Modern Warfare 3 launch by syncing their social media with their CRM to monitor all relevant tweets, posts, comments, and DMs. The data helped them increase player engagement, respond to questions and issues, and provide a great experience to the gamers.
  • CPG brands can take inspiration from Coca-Cola which has been using the power of social CRM to drive their marketing campaigns for many years now. By looking closely at social media interactions in this way, Coca-Cola can understand their audience's behaviors and preferences, allowing them to create more targeted and effective marketing campaigns.
  • Hudl, a brand helping sports teams and athletes improve performance, uses a social-first CRM to help answer questions and address tech issues. They use the data collected to offer relevant deals and product recommendations on social media when their audience is most likely to buy.

But what about charities, why do they want to integrate their CRMs with social?

Well, charities raise billions on Twitch every year through content creators and data plays an extremely important role for them.

Charity streams with influencers have become the modern-day telethon. Collecting donor data from social media into a CRM can help them solicit donations during key fundraising periods like the holiday season.

Creating platform-exclusive content

Gen Z values unique experiences and content, and they're willing to pay for it.

Brands and creators are already creating exclusive content and products for their specific platforms to attract Gen Z users.

  • Fashion brands drop limited edition collections on Instagram, creating that sense of urgency and exclusivity for Gen Z consumers.
  • Gaming companies release exclusive in-game items on platforms like Discord, Twitch, TikTok, and Twitter, not only appealing to Gen Z gamers but also building a community of players on that platform.
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  • Creators and influencers host live Q&A sessions on platforms like TikTok, Instagram, and YouTube to provide exclusive insights, behind-the-scenes content, or just fun-filled entertainment that is not available elsewhere.

48% of social media users have said they’re likely to pay for premium subscriptions. And when brands and creators offer platform-exclusive content, it helps them build a loyal following.

By offering unique experiences or products only available on a specific platform, they create a sense of belonging within the community.

This exclusivity can lead to increased engagement and brand loyalty from Gen Z users.

Final thoughts

My journey through TwitchCon 2023 and EBS 2023 has been a fun-filled eye opener.

There’s still a long road ahead of us as an industry and 2023 has been a wake up call for many.

The days of easy, brand awareness dollars and upper funnel endorsements are over. It’s time for us to innovate and find new solutions to prove that this is still a space that can drive a meaningful ROI.

Let me know your thoughts on Twitter, and as always, all my best.

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