How does a brand engage with Gen Z and Millennials to advertise fashion and luxury goods to this young and increasingly affluent cohort of tech-savvy consumers? This question has presented something of an issue to the advertiser because the younger generations do not appear to respond as well to traditional advertising in print, broadcast and physical media.
A commonly held view is that more personal engagement and experiences are required for advertising to work. But woe betide the brand that tries too hard to cross the generational gap and risks ending up an inauthentic figure of fun on Reddit’s /FellowKids channel or other social media. Gen Z and Millennials also cannot simply be ignored: according to the 17th Annual Luxury Study by Bain & Company, “Generation Z and Millennials (i.e. Gen Y) will represent approximately 55 percent of the 2025 market and will contribute 130 percent of market growth over the period.”
One option, to which brands are increasingly turning, is computer and video games. The games industry is a significant market now, with estimated global revenues in 2021 of some USD $175.8 billion globally, with almost 3 billion players. And we do not mean using old-fashioned banner ads or dropping tracking cookies on mobile, which are forms of advertising that probably do not readily fit with the lifestyle image of many luxury brands or engage with younger generations in a meaningful way.
Instead, here are three recent ways in which brands have enjoyed some success in advertising through the youthful medium of games:
1. In-game items and DLC.
Games tend to be purchased as digital copies in online stores rather than as boxed copies nowadays. This in-built online connectivity lends itself to the modern games industry’s monetization strategies of online subscriptions, DLC (downloadable content), F2P (free-to-play), MTX (microtransactions), loot boxes and combinations thereof. Under this business model, a player may pay a limited amount (or nothing at all) up-front for the game, but will then buy virtual in-game items and subscriptions, often using virtual currency purchased with real money. The in-game items will often take the form of cosmetic items, such as a character outfit (or ‘skin’), but they can also offer an in-game advantage, such as a rare gun or vehicle. Players are generally accustomed to this business model now and even most full-price AAA games released now generally include some form of DLC to a greater or lesser extent.
Brands have been adopting in-game items and DLC as an advertising opportunity by collaborating with a game developer or publisher to offer in-game representations of their fashion and luxury goods as in-game items. For example, Nintendo’s smash hit Animal Crossing: New Horizons (over 60 million copies sold), has proven to be very popular with brands. Marc Jacobs and Valentino started it off with offering a selection of favourite fashion pieces in-game, Gillette then launched its “Skinclusive Summer Line” on the Nintendo game and Puma recently launched a line of trainers available both in-game and IRL (in real-life). Needless to say, non-violent social-simulation games appropriate for all ages like Animal Crossing may present more obvious opportunities for luxury brands than games with DLC offerings more centred on tanks and guns; although even CD Projekt’s ultraviolent and dystopian Cyberpunk 2077 collaborated with Adidas on a limited set of trainers, so opportunities in all genres abound.
2. Streamers, influencers and esports players.
Perhaps a more obvious advertising route for luxury brands is the sponsorship of famous individuals. Rather than popstars and football players, in the games world this generally takes the form of seeking endorsement from so called gaming ‘influencers’ and ‘streamers’ on social media video channels, especially Amazon’s Twitch and Google’s YouTube. Perhaps somewhat surprisingly, at least for older generations, a sizeable number of Gen Z and some Millennials spend a not-insubstantial amount of time watching other people play games as well as playing games themselves. Some streamers have large followings running into the millions and many can be persuaded to endorse your brand for payment of a fee.
Esports sponsorship also capitalizes on the appetite of the younger generations for watching other people play games, albeit in a more professional and competitive setting. Although still in its relative infancy, esports sponsorship generally draws many parallels with sponsorship of traditional physical sports. Sponsorship by gaming hardware and peripheral manufacturers features heavily in esports, but so do luxury brands. For example, British esports team, Fnatic, collaborated with Gucci to release a limited edition Dive watch, which was also worn by the esports team’s League of Legends players. The luxury car manufacturers, including BMW, Mercedes-Benz and Audi, were also quick to sponsor various esports teams and competitions. Louis Vuitton went further in their collaboration with Riot Games for the 2019 League of Legends World Championship Finals, which included a bespoke trophy case for the Summoner's Cup and prestige skins designed by Nicolas Ghesquière.
3. Metaverse experiences.
Games companies will tell you that, notwithstanding certain recent high-profile tech company rebrands, the so-called ‘metaverse’ has been around in the games industry for many years now. The most well-known and successful metaverses in games are probably Roblox Corporation’s Roblox, Epic Games’ Fortnite and Microsoft’s Minecraft. Each of these games offer an online multiplayer ‘sandbox’ experience with some form of provided in-game creation tools that require no technical experience to build entire in-game worlds and experiences. As well as the core gameplay, players tend to use these games as a platform to socialize and even enjoy other media together, such as when Fortnite players have put down their guns to enjoy digital concerts by Travis Scott, Marshmello and, most recently, Ariana Grande.
Fashion and luxury brands are starting to capitalize on the high potential of these game platforms or ‘metaverses’ as a way of presenting their brands as part of the players’ worlds and the zeitgeist, thus connecting with younger Gen Z players in a way that traditional advertising simply cannot. Companies are creating (or commissioning others to create) ‘experiences’ or worlds within these games-as-a-platform (GAAP) or metaverses dedicated to their brands. The Roblox platform (with over half its players under the age of 16) currently lends itself particularly well to this, as can be witnesses with the creation of Vans World and Nikeland. Nikeland, for example, provides a world in which players can compete against one another in minigames and, of course, peruse the Nike digital showroom to see in-game representations of various Nike footwear and apparel.
By Nick Allan, Head of Interactive Entertainment, Lewis Silkin
Request a PDF copy of our Business in 2022 report.
Want to join The Collective, and contribute to the debate?
Email us at: The.Collective@lewissilkin.com