The division is led by M&C Saatchi S&E's head of digital, Haran Ramachandran, who reports in to agency chief Steve Martin. Ramachandran oversees five internal M&C Saatchi S&E staffers, plus additional freelancers.
The expansion sees the agency moving into live video gaming alongside its usual territory of football, rugby, golf and major sporting events.
Esports remains a niche but growing market, with live video gaming competitions commanding tens of thousands of viewers both in stadia and online. The ESL Pro League finals take place this weekend (14 and 15 May) in the Indigo venue at the O2 arena, a 2,350 capacity venue.
M&C Saatchi S&E is launching the new division with a partnership with the eGames, an event which pitches itself as the video game version of the Olympics (in that it also does not offer prize money, controversially). Though there is no official affiliation with the Olympics, the eGames will take place in Rio on the same day as the Olympic opening ceremony.
The agency is also advising the company behind the event, the International eGames Group, on sponsorship strategy. It eventually plans to advise brands on esports sponsorship activations, though it is less likely to broker sponsorship deals directly.
The sell for brands is that sponsorship is likely to be in the tens of thousands of pounds rather than the tens of millions commanded by major sporting events. And a highly engaged, young male audience – both online and offline – means that brands might see higher ROI.
As yet, the agency has not set a revenue target for the division. Brand demand is slow but percolating, says Ramachandran. "What we’ve seen with our current client roster is that the appetite is there, but there’s a perception issue around esports.
"We are trying to help people understand what activation might look like."
Aside from lack of awareness on the brand side, a lack of prize money is another potential hiccup for the eGames event.
"When the eGames were announced, that was the main beef that the esports community had," says Ramachandran. "The model is [usually] based on prize money – that’s the main draw."
Instead, the International eGames Group is aping the Olympic model of offering winners prestige and national pride. The thinking is that eGames winners could also potentially demand more lucrative individual sponsorship deals in time.
"That lack of prize money is, in the short term, something they’ll wrestle with – but it’s the right approach to add credibility," says Ramachandran. "It’s not just about money, it’s a sport in its own right."