For companies to sell their goods successfully, efficient marketing and advertising is essential. Today, a myriad of daily activities and events have been digitized and thus online advertisements are becoming increasingly prominent. Given this new environment for advertisement, companies need to research and study the best ways to specifically target their ads towards potential consumers. One major market that needs further strategic research is electronic sports, or eSports. ESports is a competition that is typically contended between professional players at organized events and is facilitated by electronic systems. Despite the rise of the eSports industry, which according to NewZoo and CNBC is worth around $140 billion, there has not been much discussion regarding the implications of inserting advertisements during streamed, or pre-recorded events. Furthermore, if we consider advertisement as a good that can be consumed or avoided, then the complementary nature between demand for advertisements and demand for products can be jointly determined.
This study investigates advertising strategies by examining how specific ad types (animated or static) as well as different dynamics during gameplay (battle or no battle) affect viewers’ demand of advertisement consumption. This study also deciphers a consumer's willingness to pay for advertised products through a choice-based conjoint survey. The purpose of this thesis is twofold. I hypothesize that consumers would be willing to spend more to purchase a product after consuming more of the advertisement for that product throughout the video. I also hypothesize that consumers are likely to consume more of the advertisement under low cognitive load, the non-battle condition, as well as when the advertisement is more aesthetically pleasing, the animated condition.