More Than Fun With Games

• “Shrek 2”: $108 million opening weekend
• “Harry Potter and the Prisoner of Azkaban”: $93 million opening weekend
• “Spider-Man 2”: $88 million opening weekend
• “The Passion of the Christ”: $83 million opening weekend
• “The Incredibles”: $70 million opening weekend
• Halo 2: $125 million the first day

If you’re asking yourself why you haven’t seen that last movie, you’re obviously missing out on one of the biggest entertainment events this year. Halo 2 isn’t a movie; it’s a video game. And it made more money on its opening day than the biggest movie of the year did in its first weekend.

Why aren’t advertisers paying more attention to video games?

Many of us have been talking about advergaming and inserting ads into games for a while now. Heck, I wrote about it back in 2001, and I’m hardly the only one interested. Yet not much has really happened in the realm of video games and advertising, even though the video game market (from a revenue standpoint) has become bigger than the box office.

If you think about it, games should be incredible places to advertise. They’re interactive, they’re networked, they reach a hard-to-reach demographic, and people spend enormous amounts of time playing them. Where a person might sit for about two hours in a movie once, it’s not unusual for many gamers to spend two hours per session playing a game that takes 30 or more hours to complete. A brand, prominently inserted into that game would have far more exposure than in any other entertainment medium, bar none.

Recently, the Yankee Group projected the advergaming market will reach $260 million by 2008, far beyond the $79 million spent in 2003. The demographics make sense, too. There will be over 126 million gamers by 2008, up from the current 108 million over the age of 13 currently playing games. They’re not all kids, either. The largest group of gamers is 35-49 year olds, hardly the pimply faced teenagers usually portrayed as avid gamers.

So we’ve got a large, growing audience. We’ve got a good age group with lots of disposable income. What’s the problem?

According to Richard Linnett, director of MPG Entertainment (a unit of media giant MPG), issues may lie in the medium itself and advertiser attitudes. “It’s a new thing,” says Linnett. “Advertisers don’t understand it yet. Product placement in movies and TV has been there for as long as there’s been a Hollywood. Games are relatively new.”

While advertisers try to figure out models for in-game product placement and brand insertion, the games themselves make it difficult to figure out where ads (or product placements) will be most effective. “Games are complex and have many different levels,” notes Linnett. “Where do you place the brand to make sure that the person playing the game sees it?”

Measurability and pricing are also issues related to the newness of games and their nonlinear nature. Place an ad in a movie and you can pretty much guarantee anyone still awake and in the theater will see it. Games, however, are created to be explored. They’re nonlinear and unpredictable, that’s why they’re fun.

This measurement difficulty leads to pricing problems: How do you put a price on product placement when you can’t predict how many people will see the brand? TV and film models are easy to comprehend: How much exposure is the brand going to get, and what would that cost as a commercial?

With games, it ain’t so simple.

Advergaming (games based on brands) and brand insertion in commercial games are probably at the same stage now as the Web eight years ago. We’re figuring it all out. Some companies, such as Massive Inc. and inGamePartners, are developing software and models that will allow advertisers to place and measure response on ads in games. Consumers won’t start seeing these until next year. How open consumers will be to ads in games they just plunked down $50 bucks for remains to be seen. Indications are that when done unobtrusively, gamers don’t seem to mind too much.

Make no mistake about it: In the future, video games will be a more powerful media force. As consumers become increasingly harder to reach and the ability to consistently expose them to brands becomes more difficult with so much noise in the system, games’ immersive nature may just become a better environment for putting our (and our clients’) brands in front of consumers. Figuring out how placement works in a nonlinear medium, how to measure brand exposure, how to serve ads, and how to work deals that make financial sense are obstacles that must be tackled.

We’re making progress, but there’s lots of work to be done.