In-Game Advertising Reaching New Levels

With $7.4 billion in computer and video-game sales last year, is it any wonder advertisers are getting in on the game, too? The Electronic Software Association (ESA) reports that the industry has tripled in the last decade — 6 percent just in the last year. Making this advertising opportunity even more desirable, recent research suggests players welcome in-game ads. According to a GameSpot article, video gamers accept ads as an important step in making games more realistic.

This extension of product placement will do more than enhance advertisers’ ability to reach a target audience. Video ads can also help stretch ad dollars. The mass appeal of Internet and video games spreads across gender, race, and age lines, so advertisers can target multiple segments with the same ad in the same format.

BIGresearch’s latest Simultaneous Media Survey (SIMM 10) shows 34 percent of gamers are women; 30 percent are Hispanic and African American; and the average adult spends over seven hours gaming a week. In addition, video game aficionados break into nearly equal thirds of under 18 year olds, 18-49 year olds, and 50-plus year olds. Since players dedicate a significant amount of time and loyalty to their chosen games, advertisers have a real opportunity to make valuable impressions with in-game ads.

With an eager audience waiting, agencies are creating exciting ways to integrate products into all gaming formats. Video games can exist on a product’s Web site, a gaming site, or a console. Whatever the platform, they offer enormous ad opportunities.

Current Trends: How to Play

Advertisers currently have four options to reach their target audiences through video games: branding, interaction, engagement, and sponsorship. Branding is a player’s ability to view an advertisement, such as walking past a Mountain Dew vending machine or Coca-Cola billboard in the game. Interaction allows gamers to use a product, like an Apple PowerBook, as they would in real life. Better than that, engagement can provide feedback to an advertiser. Emphasis is on customization of use, for example, so gamers can decide if their characters create their own Nike shoes. Finally, sponsorship can incorporate special packaging and exclusive incentives between advertisers and game programmers/manufacturers. Burger King worked with Xbox to create four unique games available only in its restaurants.

Effectiveness: Real or Virtual?

Product placement becomes even more important as consumers avoid ads with their DVRs and ad blockers. Product placement has an innate authenticity that’s hard to achieve with traditional advertisements. Advertisers now have a chance to bridge the gap with their targeted consumers. Their ads can become part of the game and seamlessly incorporated into the gaming world.

Will In-Game Ads Work?

Forty percent of gamers surveyed by GameSpot and the Interactive Advertising Bureau (IAB) say they don’t mind in-game ads. A third said they’d be highly likely to purchase advertised products. And 28 percent report their perception of the advertised product is affected while playing, 64 percent of which say this change is positive.

An overwhelming 86 percent of gamers questioned stated that they’d welcome an increase of in-game ads in the hope that it would lower the game price. Even if a price decrease doesn’t result from ads, a third would still support video-game ads because they lend a real-world touch to the virtual one. The relevance and authenticity of in-game ads have players poised and ready for their games to enter the real world.

“The video game industry is entering a new era, an era where technology and creativity will fuse to produce some of the most stunning entertainment of the 21st century,” said Douglas Lowenstein, president of the Entertainment Software Association. “Decades from now cultural historians will look back at this time and say it is when the definition of entertainment changed forever.”

For cutting-edge clients willing to test a creative campaign opportunity, the time is now. Advertisers, however, must develop effective ways to monitor a campaign’s success. With no precise standard of measurement currently in place, brand engagement serves as the best option. The IAB and Nielson are working to incorporate tags that will monitor brand specific usage and impact in video games.

Andreas is off this week. Today’s column ran earlier on ClickZ.

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