Why StreamElements is launching a ‘side sponsorship’ tool to widen creators’ advertising options

By Alexander Lee  •  September 23, 2024  •

Ivy Liu

StreamElements’ business model is built around performance marketing, meaning participating streamers receive a unique product link to share with their communities, with each click counting toward the creator’s performance goals. StreamElements, and the creator, only get paid when an actual conversion takes place. StreamElements demonstrated the tool to creators at TwitchCon, but has not yet set an official launch date for it.

The logic behind StreamElements’ new side sponsorship tool, which the company has dubbed “SideSpons,” is that displaying only one sponsor (and one conversion link) at a time lets creators activate only the relatively small portion of their audience that is interested in that specific product or brand. Through SideSpons, creators can now display a bundle of sponsors in different categories, which viewers can click through to select the one that interests them most.

“What we’ve noticed is that creators, across all sizes, never monetize 100 percent of the audience,” Perry said. “The core of it is to offer them more ways to convert. We want creators to get as close as possible to that 100 percent conversion mark from people who watch them, so the creator can get paid more.”

Displaying multiple sponsors is certainly an attractive prospect for livestreamers, who often rely on sponsorship dollars to stay afloat. More advertisers displayed means more potential conversions and more potential revenue. However, some StreamElements users are wary of the potential friction that might occur if prospective sponsors feel the value of their sponsorship is diluted by appearing alongside other advertisers.

“From a conversion perspective, in theory, one viewer converting into all five apps would be better than converting to one — that makes me more money, right? But I wonder what the reaction would be from a marketing perspective,” said a StreamElements user who viewed a demo of the SideSpons tool and requested anonymity. “Would ‘Genshin Impact’ really be happy that they were a side sponsor? Sure, they got the install, but it was from somebody who was installing 10 other apps at the same time, and was just trying to help their streamer make money.”

StreamElements is less concerned about the dilution of sponsorships on the platform, pointing out that a conversion is a conversion — and that StreamElements’ performance marketing approach reduces the potential risk for participating brands.

“A lot of brands think that going into the world of advertising with creators is expensive and risky because of that challenge: ‘I’ve got to choose the right creator, I’ve got to pay them the rate, and I’ve got to hope they convert,’” Perry said. “This allows them to eliminate almost all of the risk, because if you don’t convert, you don’t pay, which means the advertiser only pays if they see upside.”

As StreamElements rolls out more advertising options for creators and brands, another potential challenge for the company is competition with Twitch itself. The streaming platform is facing pressure to become profitable from its owners at Amazon, and is in the middle of its own push to create new advertising formats, such as the “Glitch” Fortnite world that launched on Sept. 20.

“I think it’s an interesting offering. The only ‘we will see,’ for me, is that Twitch is investing in so many of their own products, be it using AI or finding ways to actually have things be a little more interactive with games,” said Max Bass, director of emerging connections at the agency Gale. “And so I think that streamers are certainly looking for more custom ways to control their brand exposure.”

https://digiday.com/?p=556077