An interview with Massive CEO Cory Van Arsdale about in-game advertising. First in a two-part series.
The definitions of online and digital marketing are broadening, blurring the lines between online, in-game, and in-content advertising. Content digitally delivered and consumed through many different vehicles brings together video, gaming, and ads through a range of platforms, from desktops to set-tops and game consoles.
Digital ads are the common thread that weaves multichannel platforms into an experiential marketing program. The program can break through ad clutter, creating powerful touch points with consumers and reaching them in unexpected, engaging ways. One way to leverage consumers' engagement with digital media is through in-game advertising.
"Hey, that's not online advertising!" you may say. But how different is it? We engage people as they consume digital content, and for many of the programs the metrics and models are very similar. As more games have become connected to the Web, they've emerged as huge online communities, and the prospects of making in-game ads interactive, dynamic, and even transactional become more real and within reach of your average online media planner.
Because I'm not a true expert on in-game advertising, I thought I'd talk to someone who is. So I reached out to Cory Van Arsdale, last year named CEO of Massive, an in-game advertising network with more than 40 publisher partners. Its network includes Xbox and PC video game titles such as Electronic Art's "Madden NFL 08," Funcom's Anarchy Online, and Activision's "Guitar Hero III."
Here's what he had to say.
HG: Can you share some usage stats with us that might reveal the potential online gaming has for marketers?
CV: There are several different studies that confirm both how big video gaming has become as a global entertainment phenomenon and that games are one of the fastest growing segments of the entertainment industry.
The size of the audience is huge. Online gaming in North America will grow significantly by 2011, with nearly 114 million online PC and console gamers projected. The video game software market is projected to grow from $11.5 billion in 2007 to $13.8 billion by 2011.
The audience makeup is extremely valuable. While gamers span both genders and all ages, a critical portion of gamers are in the elusive male 18-34 demographic. Young men, aged 18-34, spend a huge and increasing amount of time playing games. And they do it at the expense of consuming other media, both offline (newspapers, magazines, TV) and online (Web browsing). If you want to reach that "lost boys" demographic, as some have termed it, marketing through video games is key.
Video game advertising is effective. Massive's research, most recently executed by Nielsen, shows that key marketing attributes increase dramatically through video game advertising on the Massive network. Research shows that brand familiarity (+64 percent), brand rating (+37 percent), purchase consideration (+41 percent), ad recall (+41 percent), and ad rating (+69 percent) all increase following marketing efforts on the Massive network.
HG: What kinds of people play online games, any stats or user audit info?
CV: Audience makeup is the full spectrum, but the Massive network is currently focused on helping marketers reach the male 18-34 year old audience. The content that we represent in our network effectively reaches that demographic in particular. And this will only continue. As stated above, online gaming in North America will grow significantly by 2011, with nearly 114 million online PC and console gamers projected.
HG: What kinds of advertising products can you see being deployed into the online gaming environment now and in the near future?
CV: Any type of ad that is appropriate or realistic to the in-game environment will likely be introduced into video gaming. The primary focus for Massive is to include advertising in video games that adds to the gaming experience. Any advertising that contributes to the realism, intensity, and passion of game play will be utilized. Today, Massive executes a full range of ad types, including 2D ad units, which may take the form of billboards, posters, pizza box and vehicle siding; full sound and video advertising, which plays contextually within the game; interactive ads which allow gamers to interact with the ad unit; and 3D object replacement, which allows for the dynamic delivery of and changing of 3D objects in the game, such as an automobile or a soda machine.
Massive focuses on two key areas when it comes to our ad inventory: scale and appropriateness. Today, 2D and video ad units are the primary currency of in-game advertising, in the same way that the :30 ad or the full-page ad is the primary currency in television or print advertising. We deliberately built the network concept and our ad unit offerings to be analogous, in several key ways, to traditional advertising businesses (television, outdoor, etc.). This approach allows advertisers and agencies to quickly and easily understand the model and integrate it into their existing campaigns. Interactive and 3D ad units tend to require more advance planning and integration with the game developers to ensure that the executions add to, and do not disrupt, the game play experience.
HG: How are online gaming advertising products being bundled with offline offerings to create multiplatform experiential offerings and sponsorships?
CV: First, there are five ways that marketers can reach gamers, which vary in intensity and complexity: gamer-focused Web sites (Xbox.com, IGN, GameSpot); around game-sponsored events and content (Discovery Channel sponsored on Xbox Live exclusive downloadable content for "Gears of War"); dynamic in-game advertising (what Massive does); hard-coded product placement (in Tom Clancy's Splinter Cell Pandora Tomorrow from Ubisoft Entertainment, players use Sony Ericsson phones); and advergames (Burger King Xbox 360 Advergame).
The offline offerings part of your question is really something that Massive doesn't currently do. Most offline advertising has been associated with hard-coded product placements, [for example] a car coded into a racing game might be showcased at an industry event in conjunction with the announcement of the game or the sponsorship of a tournament associated with the game. What Massive does -- dynamic, in-game advertising -- represents the most flexible and cost-effective way to reach gamers in the game itself.
The IAB [Interactive Advertising Bureau] recently released the following definitions of the different types of game advertising:
The second part of your question is really around the maturation and sophistication of in-game advertising and how it's becoming increasingly integrated into marketers' media planning. The majority of advertisers think of in-game advertising as a new platform to explore. The majority of our clients are beyond experimentation with dynamic, in-game advertising. Massive is now part of their media mix and included in the majority of their RFPs. Our advance selling cycle is longer now -- months instead of weeks -- which shows the maturation of the market. New media forms need advocates and evangelizers. We are still educating a lot of marketers and agencies about the network, but many get it and have worked with us as part of their media mix to reach their desired targets and meet their marketing goals.
HG: What does it cost to participate on some of these programs? Examples?
CV: We sell our advertising on a CPM (define) basis. Massive's CPMs are in line with cable TV rates for young demos and increase depending on program mix and type of integration.
In part two, Massive's CEO discusses examples of marketers who're doing a good job with advertising in online games.
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