Questions for IGN Entertainment’s David Tokheim

News Corp. announced its agreement to acquire IGN Entertainment early in September, close on the heels of its buy-out deal with MySpace parent Intermix. Taken together, the acquisitions set many tongues wagging about the vast audience of young people — young men in particular — the company had sucked up in a matter of weeks.

Of course, assembling that audience is one thing — leveraging it another. Yet News Corp. seems determined to do more than aggregate eyeballs. The plan is to wrap IGN into Fox Interactive Media, which News Corp. created in July to contain its sports and news sites, along with properties owned by Fox’s local TV stations. Execs say cross-sell opportunities with MySpace are in the cards.

IGN’s business doesn’t start and end with media, however. In addition to being a stronghold of gaming coverage, the subsidiary has ambitions to play in video game advertising and ad serving. In April, the company said it would enable ad management in 3D gaming environments and would represent media for game publishers who didn’t wish to handle ad sales in-house. Competing gaming media brokers include Massive Inc., IGA Partners and Double Fusion, which recently secured a round of funding.

ClickZ caught up with David Tokheim, IGN’s VP of marketing, to discuss the state of in-game advertising and how the company will change under News Corp.

Q. How’s the integration with News Corp. going? What’s your take on the new parent?

A. So far so good.

I think that when you look at the power of our respective audiences, our content and our distribution and bring them together, the sky’s the limit. The goal is to find a way to do it that’s smart, that’s efficient.

When you look at some of the things going on at MySpace, when you look at the things going on at IGN, and the breadth of assets at News Corp., it’s amazing.

MySpace is our sister company. To me, it’s the ultimate real marketing tool. The ultimate way to pull together 50,000 people who like nickels (grabs a nickel) and say, ‘Hey advertiser, here they are. What do you want to do with them?’

Q. So how will News Corp. sell across its various properties?

A. There are going to be opportunities both in the short term and the long term to do cross-network buys. We’re now asking, ‘what can we do that makes sense and provides a great value proposition for advertisers?’ We’ve started a discussion across groups on that.

You could do a huge reach buy on this [young male] demographic. You can’t do that anywhere else. There’s no other place you can get that kind of reach with such premium brands: IGN, MySpace, and Fox broadcasting brands like 24 and American Idol.

The next task is for us to find a way to stay relevant in each of those properties.

Q. What trends do you see in gaming media? How is it fundamentally different from other media?

A. You’re going to see marketplaces created through micro-transactions. You’re going to see the online component being more significant in game play.

What’s that mean? Less time with TV, less time with any other form of entertainment. In any other medium, for the most part you can time-stack: IM, TV, radio, cell phone.

You can’t play Madden and watch a TV show. If you try to, your quarterback is going to be sacked.

Q. Do in-game ad placements more resemble traditional advertising or product placement?

A. If done correctly, it’s product placement.

It’s a natural extension to increase the realism of the game. It would add to the experience if that message you got was up to date and was telling you something, or teaching you something [you could use].

In my opinion — in IGN’s opinion — you can’t commoditize the space. Core success starts with understanding the gamer.

Q. What’s the state of the in-game ad market?

A. It’s really young. There’s no one set way to do it. Technology players and game publishers are learning as they’re going.

Once the consoles are connected, and people get really good at building audiences, then the sky’s the limit. We can say [to advertisers], ‘you want to do an event? Great, we’re going to have a basketball tournament; we’re going to promote it and build a huge groundswell for it.’

It should be [all about] what’s going to work best for the gamer. Unfortunately, that’s not how it’s going.

Q. Is there much anger in the development community over the encroachment of ads?

A. Developers are a subset of hardcore gamers, and hardcore gamers are opinionated. They’re super smart and they’re super creative. Would the idea of sticking some kind of sell-out brand into a sacred space make them mad? Absolutely, they’ll be pissed.

[On the flip side], when I was a developer, I was pissed I couldn’t put Coke in the stadium.

Q. IGN has said it will begin selling and serving ads into games. How’s your network coming along?

A. We’ve never taken the network approach. If it’s a network approach, you commoditize it.

Q. Fair enough. How is your media representation business coming along?

A. We want to make sure that when we do an announcement, it really makes an impact, rather than saying, ‘hey, we’re serving an ad in Drunk Driver 3’.

Q.There’s a game called Drunk Driver 3?

A. It’s better than Drunk Driver 2.

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