Electronic Arts CEO Riccitiello: Gaming Is the New Mass Media

Mobile Put Booster Rockets on an Already Ascending Business, EA Chief Says at Ad Age Digital Conference


To kick off Ad Age Digital Conference in New York, Electronic Arts CEO John Riccitiello introduced the new mass media: gaming.
 

EA, the creator of game favorites such as "Madden," "FIFA" and "Battlefield," projects there will be 3 billion gamers globally by next year, up from 1.5 billion now and 200 million in 2000. EA itself has 230 million consumers on its web and game properties.


"As a marketer for many years, I've asked myself the question: Where has my target audience gone?" said Mr. Riccitiello. "They've migrated to gaming."

But gaming is a different sort of medium. While consumers often use the web or mobile devices while watching TV, gaming seems to keep more of consumers' attention. From self-reported media habits, EA found consumers don't text message, surf the web and watch TV while they're gaming. "People don't really do anything else when they're playing games, they're focused on it," Mr. Riccitiello said. "Multitasking is almost nonexistent while gaming."

By hours spent, gaming also trumps most major web properties. U.S. consumers spend 15 million hours per week gaming vs. 9.5 million hours on AOL.

The gaming industry started to go mainstream 10 years ago and, as a marketer, that's when EA began to run mass TV campaigns, Mr. Riccitiello said. "That's when it turned from a niche into something short of a mass market," he said. "It felt like a real industry, something that really mattered."

But that growth is skyrocketing now, largely thanks to exploding smartphone sales, which put a gaming platform in millions more consumers' pockets. "Anyone with a phone can play a game," he said. Gaming is the No. 1 category in the iPhone, iPad and Android app stores. It's also the top app category on Facebook. Even the first game offered on the grey-screened Kindle outsold the top book.

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"Where we were once an industry that talked about having attention and lacking reach, we now have that attention and staggering reach," he added.


EA is now trying to figure out how to be both a major entertainment marketer -- keep an eye out for $100 million-plus campaign for the "Call of Duty" competitor "Battlefield 3.0" this holiday season -- and a major media company.

"We're at the very early stage as gaming as a media," Mr. Riccitiello said. "The numbers support that it should be, but frankly we've been more focused on selling our apps than our audience."

Barack Obama, when he was a distant third in the primaries during the last presidential election, took out ads in EA games such as the "Madden" and "NHL" franchises to reach youth. "That obviously worked out for him," said Mr. Riccitiello. EA is also using its own properties to promote its own brands, which will see 25 new products introduced in the next year.

But EA is still working on how best to work with advertisers, Mr. Riccitiello admitted, which means advertisers can enjoy bargains on new programs.

"It's not easy -- it's not selling a commercial on TV or fashion ads in a magazine," he said. "At this point in time, you can do really unique things. But those opportunities are going to be bloody expensive in three years. We don't know how to price them now. If you want to make a name for yourself to doing something bigger and better, you can make an impact here."

IF ENGLISH SOCCER CAN TAKE IN $155M FROM SPONSORED JERSEYS, WHAT ABOUT NBA, NFL?

Mark Cuban: Ads on Uniforms a Matter of 'How Much' Not 'If'


NEW YORK (AdAge.com) -- It was just a small blurb in Sports Illustrated magazine's "By the Numbers" section two weeks ago: "$155 million -- Income generated by the 20 English Premier League soccer teams this season by selling ad space on their jerseys."

But those 21 words are causing the four major American sports leagues, its corporate partners and even fans to rethink the idea of sponsor patches on team uniforms.

"It's definitely on the horizon," Mark Cuban, owner of the National Basketball Association's Dallas Mavericks, said in an exchange of e-mails with Advertising Age. "I think it's more an issue of 'how much' rather than 'if' [it happens]."


If the English Premier League can generate $155 million, imagine what the National Football League or the NBA can do. Those are the two sports leagues that have already dipped their respective toes into the sponsorship-on-jerseys debate.


The NBA has been the most aggressive in pushing the agenda, hence Mr. Cuban's opinion that it could be sooner than later for sponsor patches. The league-backed NBA Development League and its Women's National Basketball Association (WNBA) both allow teams to sell jersey sponsorships. That exposure has even led some brands not normally associated with sports marketing to put its patch on the coveted uniform. Microsoft, for instance, placed its Bing search engine logo on the front of the WNBA's Seattle Storm's jerseys.


"We are always watching the WNBA and the NBA Development League to see what works and what may be an applicable business practice, and we fully recognize that the presence of corporate branding on game uniforms is a widely accepted practice on the global sports landscape, particularly in soccer," NBA spokesman Mike Bass said. "That being said, the value proposition to include branding on the NBA game uniforms has not yet presented itself."

Mr. Cuban agreed, saying "Find me a multi-year deal at $10 million or more per year and I will make it happen."


The NFL allows teams to sell advertising on practice jerseys, and more than half of the 32 franchises have already done so. The New York Jets signed a deal last year with Atlantic Health to sponsor their practice jerseys as well as their New Jersey-based practice facility. According to Joyce Julius & Associations, an Ann Arbor, Mich.-based company that evaluates sports sponsorships, Atlantic Health received nearly $200,000 in free exposure during HBO's four-week telecast of its popular "Hard Knocks" series, which chronicles an NFL team each summer during training camp.


"We are approached annually by major companies who say that NFL jerseys represent the most valuable real estate in sports and inquire about placement of their logos," NFL spokesman Brian McCarthy said. "But we do not have any plans to do so with game jerseys."


Parity would be an issue, of course. While that $155 million for the 20 English Premier League teams sounds great, the disparity between the top teams and the bottom is wide, just as it likely would be in American sports between franchises in New York and, say, San Jose or Oklahoma City. The EPL's two biggest clubs, Liverpool and Manchester United, take up 40% of that ad revenue -- $31 million a year for Liverpool's deal with British financial services company Standard Chartered, and $30 million annually for Man-U's agreement with insurance carrier Aon. Seven clubs in the EPL earn less than $1 million annually for shirt sponsorship deals.

This isn't a recent issue, either. As leagues and teams have struggled to find new sources of revenue, the idea of putting sponsor patches on uniforms has simmered on the back burner, with an occasional switch to a front burner boil.

In 2009, MLB allowed sponsor patches on team USA jerseys at the World Baseball Classic.

In 2004, MLB tried to put the logo for the film "Spider-Man 2" on the bases as a promotion tool for the film, until a public outcry over the sanctity of the game and the field forced the league to rethink that decision.

As far back as 1999, Howard Smith, then VP-marketing for MLB, told The New York Times that the league was "talking from A to Z about our on-field programs, and bringing in additional sponsors in other formats than we have now. We've talked about everything. But we're not close to anything."

And they're still not.

In a statement emailed to Advertising Age, an MLB spokesman wrote: "Baseball has a longstanding policy of not allowing corporate advertising on our uniforms for non-international competitions. We are continuing to monitor what appears to be an increase in the trend that places non-manufacturer corporate marks on uniforms."

National Hockey League spokesman Kerry McGovern said, "At this time, we'd prefer not to comment."

SPORTS TOP SELLING JERSEYS

In 2004 the NBA estimated its merchandising revenues would rise to at least $3.3 billion in gross sales, which could mark the first time that the NBA surpasses the NFL in licensed product sales thanks to the entry of LeBron James and Carmelo Anthony. In 2003, NFL-licensed items grossed $3.2 billion, with the NBA and Major League Baseball pulling in $3 billion, according to issue of License! Magazine.