Two in-game advertising networks could bring the promise of reaching the young male demographic closer to reality.
In-game advertising got a big boost this week with the launch of two video game advertising networks which allow advertisers to simultaneously reach an aggregated audience of PC gamers in real time.
Rivals Massive Inc. and inGamePartners (IGP) have launched competing ad networks, with Massive generally pursuing larger game publishers for non-exclusive deals and IGP going for exclusive agreements with small and mid-tier publishers.
"If you're a top-tier advertiser trying to reach 18 to 34 year old men, you've got to be in video games," said Mitch Davis, Massive's CEO. "Advertisers are looking for media that reaches that target group, is accountable, and is time-based, so a campaign can run for a length of time and then be changed. That's what we're delivering with the Massive Ad Network."
Massive's relationships with game publishers -- including Vivendi Universal Games, Ubisoft, and Legacy Interactive -- will allow it to serve ads into more than 15 titles and reach a weekly audience of close to two million 18 to 34 year old men, the company says. In terms of simultaneous prime time reach, Massive will deliver 500,000 users by the end of the quarter, up to 1 million in Q2 and several million by Q3, Davis said.
"By Q3 next year, we'll have the second-largest male 18 to 34 network of any medium, outside of prime time Monday Night Football, which reaches about 4.5 million. If you want to get to a large number of 18 to 34 year old men in a week on a cumulative reach basis, you haven't got too many choices," Davis said.
Competitor InGamePartners has signed exclusive agreements to advertise on games by online gaming networks PHXX and GriffinRun. Advertisers currently include SpikeTV, GE, ZDNet, and the Army National Guard. The company recently announced an alliance with relationship marketing firm Emerge Partners to create in-game packages for its clients, which include liquor brands Absolut and Jim Beam, and other consumer products.
"This is a truly unique opportunity, not only to reach this very hard to find demographic, but to create value-based relationship marketing efforts that show positive returns for a brand," said Darren Herman, CEO of inGamePartners. "Measuring value creation for advertisers in an in-game environment has never been done before, and with Emerge, we look forward to revolutionizing the industry."
Though the potential is huge, the in-game advertising market has a long way to go to compete with other media, according to Jay Horwitz, Jupiter Research analyst. (JupiterResearch shares a parent company with this publication.)
"A number of substantial hurdles must be overcome before video games are considered an option along with television, radio, print, and outdoor, including tracking and measurement mechanisms, widespread game connectivity, and game publisher buy-in," Horwitz said. "These networks address the key elements needed for media buyers, but the inventory is fairly limited."
In addition, Horwitz pointed out that the argument for why it could be a powerful ad medium is predicated on aggregate statistics of audience and usage, but in reality, the video game market is highly fragmented technologically and across content genres, making it difficult to reach the target audience.
Operating much like online ad serving networks, Massive and IGP's platforms are based on client-server systems that dynamically deliver advertising into video games within their network, and measure and report results back to publishers. Ads are downloaded from the server in the background of game play to minimize effects on game play or performance.
So far, most of the interest in Massive's network has come from brand advertisers in the entertainment, retail, financial services and auto industries. The first advertiser to participate is RealNetworks, which will place ads for its Rhapsody service in Global Star Software's "Mall Tycoon 2."
"The test we are running with Massive enables us to put the Rhapsody brand in front of a very attractive audience and take full advantage of the strengths of the video game medium: interactivity, immersiveness, scalability and intense user involvement," said Adam Selipsky, RealNetworks VP marketing.
Davis said Massive has lined up about a dozen game titles for the network to be released in the first half of 2005, and another 25 titles in the second half of 2005.
While most agree the video game market is a great place to find 18 to 34 year old males, there is not yet much evidence to show that in-game ads targeted at this group will be effective. An ongoing initiative launched earlier this year by game publisher Activision and research firm Nielsen Entertainment today announced the results of a study on the power of in-game advertising.
The study came up with some encouraging results for the industry, finding that active interaction with brands substantially impacts consumer awareness and recall; enhance a gamer's interest in purchasing the advertised products; and that in-game advertising is perceived positively and makes a game seem more realistic.
"Marketers are more willing to experiment with new ways to reach consumers that go beyond the traditional methods. This study shows how, if products are integrated effectively within a game, the impact and recall of that advertising is well received," said Michael Dowling, GM of Nielsen Interactive Entertainment, a division of Nielsen Entertainment.
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Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.
Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.
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This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.
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