The gaming industry has become increasingly fertile territory for marketers to pitch their wares. According to retail information firm NPD Group, gaming generated revenue of $21.4 billion in 2008, and the average weekly number of hours spent gaming online has only increased since then—up 10 percent since 2009 alone. With so many dollars spent—and so many eyes focused—on online games, any savvy marketer would be lucky to have his ads included in the content.
What’s more, brand integration and product placement in videogames—unlike in-content advertising in television and film—can be measured. Online games, along with Web-enabled console systems such as PlayStation 3 and Xbox 360, allow marketers to track and evaluate how their products are being used, how many people are seeing the products, how long the product stays on screen, and, in the case of online games, whether or not the advertisement drives sales.
Some in-game advertisements are passive, appearing only in the background of the gaming activity. The Web site VoteForChange.com, for example, reportedly paid to have an in-game billboard inserted into the roadside action of the Electronic Arts (EA) game "Burnout Paradise" prior to the 2008 presidential election. (An EA spokesperson would neither confirm nor deny the placement, but Gamepolitics.com published a screen shot of the billboard.)
Other in-game ads, however, can be part of the action itself, and tying brand affinity to videogame content is much more personal than with comparable television placements. On TV, a character mentions a product and the viewer has to choose whether to go learn more; in a videogame, the benefits of the product can be built directly into the gamer’s actual goal, such as a racing game that includes brand-name cars and tires. Within that context, says Justin Townsend, chairman and cofounder of in-game advertising provider IGA Worldwide, a company might build brand awareness and affinity while at the same time benefitting the gamer.
“Let’s say you had a racing game and you’re racing around the track,” Townsend explains. “Your goal is to beat all other racers. If you do, you get the new Perelli tire. If you get that tire you get added benefits, such as going faster.” This “added benefit” allows brands to build affinity: What transpires in the game aligns with what the brand wants the consumer to understand about the product in the real world.
“The rule of thumb [for typical online ads] is 1 percent click rate,” says Ronnie Lavi, senior manager of product planning at MediaMind, a provider of digital advertising solutions. “For online ads inside of our games we saw 7 percent click rates. That’s a huge difference.” Lavi believes in-game advertisements are beneficial to marketers because the users of videogames are typically more engaged than passive TV watchers. Also, videogame demographics can be quite distinct, thus allowing ads to be more targeted. “Casual downloadable games will have ads targeted toward women,” Lavi says, “because they drive that market.”
Townsend says that Internet connectivity has allowed in-game advertisements to become far more targeted and relevant. For example, he says, on Sony Computer Entertainment’s PlayStation 3 Web-enabled console, a frequency cap enables marketers to set a maximum number of impressions for each ad. Once an ad hits its cap, a new piece of creative is inserted. IGA, which was selected as the first in-game advertising provider for PlayStation 3, can also serve ads by time of day in order to target the right audience. The ads on a PlayStation 3 game at 11 a.m. on a weekday are different than the ones at 8 p.m. on a weeknight because of the different demographics of the typical player at each time.
Despite the additional technological advantages, in-game advertising still has to follow the same rules as its in-content counterparts in other media: Ads have to be organic, authentic, and relevant to the context. “Even though games tend to be fictional in nature,” says Tom Meyer, president at entertainment marketing firm Davie Brown Entertainment, “anything that doesn’t happen in the real world shouldn’t be done in the context of advertising within the game. When you’re embedding yourself into the content of some intellectual property you have to be respectful. People aren’t playing a game to see the brand. They are playing for an entertainment experience. If the brand happens to be there in a contextually relevant way and it’s a positive to their entertainment experience, then people tend to respond positively to it.”