Twitch recruits broad set of advertisers

Twitch, the live videogame streaming platform now owned by Amazon, has been actively seeking to raise its profile in the advertising industry, luring marketers with the promise of reaching coveted young male consumers.

But the question remains whether the company can convince more conservative mainstream brands to move budgets away from traditional TV into its more unfiltered environment.

Launched in 2011, Twitch lets people stream their videogame sessions live or watch other players. Content on Twitch ranges from amateur gamers streaming their attempts to complete difficult levels of games like “League of Legends” to popular Twitch influencers playing in organized competitions.

Twitch initially focused on selling ads to gaming companies; it was a natural place to showcase the latest version of “Madden Football” or “Grand Theft Auto,” for example.

But following its nearly $1 billion sale to Amazon in 2014, the company has worked to expand beyond its core to appeal to marketers in different categories like soft drinks, fast food, electronics and entertainment—naturals for its young, male-heavy audience.

That effort appears to be resonating, as the list of brands recently advertising on Twitch include Coke, Pepsi, Bud Light, Pizza Hut, Old Spice, Totino’s and Red Bull. And lately, Twitch has become a standard ad vehicle for big movie openings like the most recent “Star Trek” and the “Magnificent Seven” remake.

Anthony Danzi, Twitch’s senior vice president of client strategy, said the Amazon acquisition helped open many marketers eyes to the very idea that people watch other people play videogames. And since then, companies like ESPN and Turner are putting muscle behind e-sports, or competitive video gaming, which has helped elevate the sector.

“We’re having tremendous success with nonendemic brands,” he said. “The most significant shift we’ve seen is that gamers are now becoming an extremely attractive target,” he said. “We’ve disproved or blown away stereotypes. Our conversations are no longer around ‘is this audience safe?’”

Twitch says it now averages close to 10 million daily active users globally, and those users spend a whopping 106 minutes per person per day on the site on average.

But whether Twitch can leverage those viewership numbers and find itself in the same ad buying consideration set as giants like YouTube and Facebook—let alone TV—remains to be seen. Even though the service can boast of a rabid, highly engaged fan base, Twitch is still not that big relative to platforms like Facebook and YouTube.

In the U.S., comScore pegged Twitch’s audience at 12.6 million unique visitors in August, a surge of 23% from a year ago. Facebook reached 203.5 million unique users in the U.S. that month, while YouTube reached 212.8 million, according to comScore.

Ad buyers say the service faces some hurdles when it comes to selling more conservative marketers on the merits of unfiltered, live videogame streaming.

Charles Fiordalis, chief digital officer at Media Storm, said marketers are definitely attracted to Twitch’s young male viewership, but the site still faces “barriers.”

“Advertisers want a clean, well-lit space for their brand,” he said. Mr. Fiordalis suggested Twitch might follow YouTube’s example of building out a network of brand-safe channels for ad buyers.

While Amazon’s ad plans are heavily tilted toward data, targeting and programmatic buying, advertising on Twitch is more of the old-fashioned TV sponsorship variety. Brands can run traditional video ads—pre-rolls and mid-rolls.

Twitch created an 80s basement to promote the Netflix show “Stranger Things” PHOTO: TWITCH

But according to Mr. Danzi, the best campaigns involve custom integrations such as a recent campaign for Netflix’s buzzy summer show “Stranger Things.” That deal saw a group of prominent Twitch creators playing games in an ‘80s-themed basement set and culminated in the first eight minutes of the pilot episode streaming on Twitch.

Michael Law, executive vice president and managing director of video Investments at the media buying agency Dentsu Aegis Network, said that Twitch isn’t yet realistically able to siphon ad budgets from TV. But Twitch is in the mix, “especially when we think about younger consumers,” he said.

Mr. Danzi said he’d love to tap into TV ad spending down the road. In the near term, he said that the company recently completed a long-term deal with a marketer that was looking to lock up ad inventory well in advance. He sees more “upfront-like” ad selling in the future.

This article first appeared in www.venturebeat.com

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