Video Game Sector Boosts Online Ad Spending

Mention video games in a conversation about interactive marketing, and in-game advertising immediately comes to mind. Yet video game publishers are online advertisers in their own right. And while interactive ad spending from this sector was for several years less than what one might have expected from an industry focused on the young and hyper-digitized, its investment in online ads has increased of late.

“Our budget’s growth year-on-year has been in the double digits,” said Ubisoft Senior Manager of Digital Marketing Paul Caparotta. “Our spends are rivaling print, we’re seeing tremendous growth.”

Spending on display advertising for Ubisoft increased from $1.6 million in 2004 to $2.6 million in 2005 and $3.2 million last year, according to data from TNS Media Intelligence. In the same time, the publisher’s TV buy dwindled from $16.1 million in 2004 to $13.8 million in 2006. Ubisoft did not release figures on actual spending.

The budget shift has been echoed by other publishers. Electronic Arts’ online display ad spend topped $5 million last year, according to TNS. TNS tracked video game publisher Capcom’s online spend for 2006 at nearly half a million dollars, up from $388,000 in 2004. The TNS data do not include rich media, video or other non-display formats.

“It is a huge priority for EA, and has been a growing priority over the last five years,” said Carolyn Feinstein, VP of consumer marketing at Electronic Arts. “We spend close to 20 percent of our media online.”

Rich media and video units are common online media placements for many publishers, but building a brand identity often includes microsites, viral marketing, search, and the creation of entire communities. Budget allotments to fuel these campaigns for many companies have come directly from other media.

Each campaign is dynamic, and game publishers see themselves as progressive when it comes to execution. “One of the things I think is great about video game marketing and video gamers in general [is they’re] open to ground-breaking media applications,” said Ubisoft’s Caparotta.

Gaming industry Web sites often serve as the foundation of video game industry ad campaigns, though certain game releases are aimed at a broader audience and include media buys on non-gamer sites.

“It’s a balance,” said Caparotta. “With the next generation of hardware… we are finding more video games are becoming pervasive, usage is growing, and mainstream sites are becoming more of a target for us.”

Microsites are often a focal point of these campaigns, as was the case with a promotion for EA’sMadden Franchise last year. “Advertising took you to that site, and it was a place you wanted to go back to every day. We try to employ that tactic a fair amount,” said Feinstein.

Community also plays a key role. Capcom launched a CAPCOMunity channel in the past year to provide a pipeline of early and exclusive information to its fanbase. Visitors get exclusive peeks at new titles and can read blogs authored by Capcom staff. “A lot of our activities are now linking back to CAPCOMunity,” said Jack Symon, director of brand marketing at Capcom.

Capcom built its community in addition to individual Web sites for each brand, which the company calls brand worlds. These follow an entire franchise, including various games, licensed goods such as action figures, and TV and movie titles associated with each game series.

For the release of “Rayman: Raving Rabbids,” Ubisoft created a hub on MySpace where it put up videos of the game’s characters, and accepted user generated content. Work on the campaign was done by AKQA, and Ubisoft said it “fulfilled all the ROI benchmarks we established,” Caparotta said.

Online advertising provides a deeper level of communication not easily achieved on other channels. “We use online advertising to tell a high-impact message,” said Feinstein. “The online space keeps directing them to deeper and deeper interaction.”

Related reading