Paul Gunning says firms like Zynga and EA are missing big opportunities.
Tribal DDB Worldwide CEO Paul Gunning has been testing in-game advertising for clients like McDonald's, Gatorade, and State Farm for 12 years, and these days he's lamenting a niche that refuses to grow up even though its users have.
"Opportunities that exist in gaming are [B.S.]," he said, speaking in a phone interview with ClickZ. "They are background images."
"Advertising is [B.S.] to them," he said. "Is Zynga really just selling advertising because they're now public and they got to squeeze every dime they can for Wall Street? Does EA senior management even know they have advertising? They couldn't even tell you who runs it or how much money it makes since it's small compared to what their game titles make them."
The monetization opportunities currently lost are epic, Gunning suggests.
"The gaming base is just massive," he said. "And the demographics are really attractive."
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While addressing the plodding evolution of in-game ads for 15 minutes on Monday, Gunning covered a lot of ground. Here are highlights from a frank conversation with the agency CEO:
Gunning: We are no longer talking about kids in their basements playing Xbox. The games are more physically interactive. They don't necessarily produce this sedentary experience. All those [stereotypes] are going away. It's not just 12 year olds anymore. It's six year olds to 80 year olds. We know that. It's multigenerational. We have a lot of moms and grandparents. And its mobile, and it's social. The time spent is massive. So why isn't the advertising in video games…why isn't that platform gigantic? Why is it only a single digit - a low single digit - of the revenue for Electronic Arts? Why has Zynga just now started to hire advertising people?
ClickZ: Who in organizations like Zynga and Microsoft needs to be convinced of this message for things to actually change?
PG: The people who need to hear this are the ones concerned about revenue. So the C suites need to hear it. Now, what needs to be done about it, though, they need to know how advertising works. By that I don't mean they need to understand how advertising affects the consumer. They need to understand how the industrial complex of advertising works. They need people who know how to show a better advertising platform to brands, how to prove that from a research standpoint. Once you have that, they need people who know how to sell it at scale.
CZ: Should Zynga and EA copy Facebook's strategy and build up an agency-like team in-house?
PG: That's exactly what they need to do. They need to build…not just an advertising sales force. I am sure they would say, 'We got that.' They need to build an advertising-based culture. Electronic Arts sells oodles of titles via retail. I guarantee you they know how the retail environment works. They know how Walmart does this stuff. They know where to stack them and about end aisle display and merchandising. They know retail inside and out because that's where they are making all their dough. Well, actually, they need the same kinds of people in their organizations who know at the same level about advertising - if they care. If they don't care, who [cares], right? If not, then don't talk about advertising. Don't say, "We're serious about it."
CZ: What else needs to be done?
PG: Advertising inside video games has not proven itself to be a better choice with all the other freaking choices out there. Until they actually address it from a research standpoint to prove to the industry that it is a more effective platform than other choices, it's not really going to go anywhere. The second area is creative. A lot of them have some good in-game integration. It's cute. But that creative canvass is still rudimentary for big brands that expect "lick the screen" creative opportunities. Opportunities that exist in gaming are [B.S.]. They are background images. Until they create an environment that makes for an optimal advertising experience - and prove that it works - it's never going to pay off when I think it could easily pay off.
CZ: What would you compare in-game advertising to in the traditional marketing world?
PG: I think we can compare it to other types of digital advertising. And I think we can compare it to other types of entertainment and print advertising. Let me throw out this possibility. Can advertising in a game have as much attraction and efficacy as theater advertising?
CZ: I think it could.
PG: So do I. You have someone coming in and expecting a two-hour entertainment experience. They are definitely not sitting down to watch 15 minutes of Seinfeld on the DVR. It's a mindset where they are sitting down to get transported. That's the same kind of mindset with console games.
CZ: Since it's so much more interactive than watching a movie, though, does that make the ad impression more or less powerful?
PG: Well that's where the research needs to come in. My contention is that it should be more powerful, more memorable. It should drive better purchase intent. But until we measure at scale and tell that story, it's unknown - while the audience gets bigger. It's like the universe has gotten bigger for the opportunity. And we haven't done anything to make the advertising more attractive than where we were 12 years ago.
CZ:What about a more common comparison in terms of ad platforms?
PG: I'm going to use Zynga as my [platform] example again because it's the poster child for this conversation. There's freaking thousands of [ads] being rolled out every day, being consumed during these sort of snackable times. I would compare that to other types of short-form advertising. I would compare it to print. Anecdotally, I think everyone would tell you in the pick up line for school that moms no longer sit there and flip through magazines. They are on their phones and playing games. Right there, they are taken away from the print exposures.
CZ: What should the in-game advertising look like?
PG: That's the creative canvas part I was talking about. Right now, it's not strong enough. You certainly can't compare an ad in Vogue that a mom may be looking at in a school pick up line to a banner ad that's on Words With Friends. And I don't think creatively the two will ever be on par, but there's got to be a way that the one in the game can be similarly impactful. And it's going to have to be the interactivity of the ad because the screen and the visual impact aren't going to compare to a full-size Vogue ad. But if the eyeballs are moving from Vogue to the smart phone, it's got to be addressed. And I don't think it's being addressed, which is pissing me off.
Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.
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