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Nicolas Gaede has spent more than a decade in sports and entertainment, specializing in marketing and sponsorships at Lagardère. In August, he and fellow Lagardère colleague Ulrik Ruhnau founded CSIGHT, a sports consultancy firm covering both traditional and electronic sports. He joined The Esports Observer to share his experience, predictions, and advice for brands considering esports sponsorship.
Gaede’s career began around 15 years ago with sports rights company Sportfive, which was acquired by Lagardère Sports in 2006.
“I started my career in traditional football [soccer] marketing and sponsorship for a German Bundesliga club back in 2005 then took over different responsibilities in German marketing and business development,” he said. “My duties expanded to the European level for several single markets in the Nordics and Eastern Europe but it was always linked to business development, innovations, and growth initiatives.”
During his time at Lagardère, Gaede was instrumental in the company’s expansion into esports. He served as SVP of esports for nearly 18 months prior to his departure.
“I always saw a huge demand for strategic advisory,” said Gaede, citing this demand as the inspiration for founding CSIGHT with Lagardère EVP of stadiums & arenas Ruhnau.
Looking back, Gaede observed how much esports strategy has changed in just the last few years.
“In those very early days, a lot of people from traditional sports as well as on non-endemic brand side hadn’t heard about esports at all,” he recalled. “Beside that, there were the ones who had heard of it but didn’t fully understand the specific ecosystem and its impact. Here our role was and still is predominantly about education in the first step. Based on that ‘common understanding’ it’s about the development of an individual strategy first and about an efficient implementation afterwards.”
The fixed nature of traditional sporting associations and competition schedules, compared to the varied and evolving nature of esports, posed a challenge for brands just entering the space, Gaede explained.
“In traditional sports, everything is pretty much fixed,” he said. “You have a fixed association and league system, a fixed match calendar and fixed situation of relevant media and marketing rights for all stakeholders. For international major events, you know six to eight years in advance where and when they will take place.”
Gaede added that brand positioning is also a significant strategic issue. It can be difficult for brands to differentiate between all of the games and teams within the ecosystem, so many brands still look at esports as a single, interchangeable entity.
“For brands who were experienced in sponsorship with traditional sports clubs but just looking into esports, these two issues are relevant. They are looking for a certain level of security, particularly in an industry they are not that familiar with, and they are looking for a brand fit. Which means for a potential partner with similar core values and a clear and strong positioning.”
There are several differences between planning unique strategies for brands entering traditional sports vs. esports, Gaede explained.
One very basic difference, at least when compared to the bigger European team sports is that esports is a company- or privately-owned industry. That means you have a publisher that owns the game—something very different from football, handball, or other team sports in Europe which are dominated by a history of non-profit organizations.
Gaede says that he’s often asked why it’s “a bit easier” to step into esports as a brand. His answer is that as part of the entertainment industry, esports is widely accepted as a commercial business.
In Europe, there’s always discussion about whether sports should be considered entertainment or not. “I think that’s different from U.S. sports,” Gaede said. “Take the franchise systems of most major leagues in the U.S. and the LEC in Europe, for example. This is the kind of business model that everyone expected to be commercial. Everybody knows that a lot of people and companies invest a lot of money into franchise slots so it’s just fair that it’s of commercial interest to an extent.”
Brands still need to add value, Gaede stressed. “You have to be smart, you have to speak the right language, and you have to be relevant to the fans.”
Gaede says that education is a large part of his work, likening his role at CSIGHT to a “translator for both worlds.”
“I’m mid-40s so I’m not what you’d consider a digital native but I did get into esports early,” he said. “A lot of decision-makers are north of 40 or 50 so they might not be familiar with everything going on in the esports industry.
“For that reason, the first part of any kind of meeting with brands is education, which differs with [each client’s] knowledge. But the transfer of know-how isn’t just a one-way street. It’s not just the brand that needs to learn about the esports it’s also the rightsholder who needs to position and communicate his asset in a proper way. So I really find myself often in the role of a “translator” who’s building bridges and creates a certain level of understanding, interest, and trust between the parties, which is the basis for everything that follows later.”
It can be hard for brands to compare rights, for example, and they need someone impartial to ask, added Gaede, which is where CSIGHT comes in.
Gaede warns brands not to jump into esports simply because they think they should.
“These days I see a lot of brands stepping in more or less rashly without being strategically prepared. They do so because they feel that they’ll miss something if they don’t. But in one or two years’ time, we’re going to see the first of these brands getting frustrated because it didn’t work as expected or as told by some ‘experts.’ It’s in everyone’s interest to create an individual strategy, figure out the best fitting partner, define the right package of sponsorship assets, develop a creative activation campaign, and take it from there. That’s just the best likelihood that they’re going to succeed and they’re going to grow their partnership in the future.”
One of the biggest challenges holding back sponsorship penetration is a deeper understanding of esports, said Gaede.
“This is especially true among major non-endemic brands with big budgets. For them, I think they need a certain level of security. The risk of making a mistake is bigger if you don’t fully get what you’re doing.”
Perhaps the most important lesson for brands is to manage their expectations regarding the esports industry, Gaede advised.
“Talking to people from the esports industry or reading articles about it feels like everybody is overbidding each other regarding higher figures, faster growth rate… it feels like everything is going to happen tomorrow and it’s going to double every day. I fully believe in the positive prediction of the industry and we use a lot of data in our strategic consultancy.
But I don’t know if that’s really so helpful in the end to raise expectations that high. If you talk to experts who have built this business from scratch, they’ll tell you it’s not going to happen as fast as many people are saying. Yes, it is going to be bigger, but it will take its time and we’ll see a consolidating at a certain point.”
Gaede says that managing expectations will allow non-endemic brands to enter the space and grow over time. Otherwise, these brands risk becoming unsatisfied with results and backing out.
While expectations should remain realistic, Gaede adds that there is a lot to look forward to.
“This is still a young industry and it doesn’t grow evolutionary but revolutionary in both ways – organically and inorganically. Esports already accomplished in 3-5 years what traditional sports did in 30 years. And the starting point is still just incredible.”
This interview was conducted by Trent Murray.
