The popularity of video games has been on the rise with the popularity of esports. Games like League of Legends, Defense of the Ancients (DotA), and Counter Strike: Global Offensive rake in hundreds of thousands of viewers for their large scale events, and has opened up a brand new video platform: streaming.

Originally started as Justin.tv in 2007, Twitch has become the largest and most popular streaming platform on the internet. With top streamers reaching upwards of 20,000 concurrent viewers at the same time, it’s no surprise that advertisers have started to notice the potential of the streaming platform. A streamer can choose how often to play ads and for how long, often depending on when a game has low amounts of action, causing a variable amount of money to be generated with these ads. While it makes sense that a streamer can play ads frequently to make more money, they must strike a fine balance to make sure they do not annoy their fanbase.

While the amount of money a streamer can make off of ads and how much it costs to have Twitch display your ad is not public information, popular streamers such as Michael “Imaqtpie” Santana can make $8,000 a month off of partnerships, advertisements, subscriptions, and donations. This speaks to the amount of volume and views an ad can receive within a short amount of time. Similar to how a Youtube endorsement can work, viewers are often more willing to buy a product that has been used and promoted by their favourite streamers, since they tend to trust them more.

Although an unlikely competitor in the entertainment industry, Twitch has shown that it can attract tens of thousands of viewers at any given time of day, causing the reach for advertisements to be massive. Backed by endorsements from popular streamers, it’s hard to ignore Twitch’s power for advertising.

Sources:

http://www.ongamers.com/articles/scarra-will-probably-earn-200k-this-year-michael-odee-o-dell-discusses-esport-earnings/1100-908/