In-game advertising

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In-game advertising (IGA) refers to the use of computer and video games as a medium in which to deliver advertising. 2005 spending on in-game advertising was USD$56 million, and this figure is estimated to grow to $1.8 billion by 2010 according to Massive Incorporated[1], although Yankee Group gives a lower estimate at $732 million.[2] In-game advertising is seen by some in the games industry as offering a new revenue stream, allowing developers to offset growing development costs and to take more risks in gameplay [3]. Some advertisers see in-game advertising as a prime way to target the male 18-34 demographic, who are increasingly neglecting television in favor of computer and video games.[4] Still others see in-game advertising as a way to reach into casual games, for example through NeoEdge Networks and titles like Diner Dash, and target a predominately female demographic, who are frequently harder to reach and impact. However, some "core" gamers see these moves as greedy and invasive, dubbing in-game advertising software as spyware. This view was demonstrated by the backlash against Electronic Arts' Battlefield 2142 which contained in-game advertisements from IGA Worldwide.[5] However, this does not stop traditional firms such as Nielsen Media Research branching out into the in-game advertising space, by announcing a new video games ratings service (similar to Nielsen ratings) called GamePlay Metrics to serve in-game advertisers.[6]

Contents

[edit] Static in-game advertising

Early examples of in-game advertising were static. Some of these consisted of virtual billboards, whereas others could be considered in-game product placement. These adverts were placed directly into the game by artists or programmers and could not be changed later. The first example was seen in the 1978 computer game Adventureland by Scott Adams, who inserted an advertisement for his then forthcoming game Pirate Adventure.[7] Examples of in-game advertising of third party products include the sponsorship of the Zool series by Chupa Chups, leading to various displays of the Chupa Chups product and brand in the game, including a series of levels set in a Sweet world. Another early example of in-game advertising can be seen in the FIFA International Soccer series, with commercial billboard adverts featured in-game since 1994.[8] Static adverts allow the advertiser and developers to have more influence on how the adverts are displayed in-game and can be worked to beyond the levels of a pure billboard. In Splinter Cell: Chaos Theory for example, a large glowing advert for AXE deodorant appears hard coded in the game, forming an obstacle to the player character. Not only did it allow the developers to experiment with dramatic lighting effects, it also drew the players' attention by providing them with a challenge in which to overcome.[9]

Chupa Chups products can be seen in the background of the 1992 computer game Zool
Chupa Chups products can be seen in the background of the 1992 computer game Zool
An adidas billboard is displayed in the foreground of the 1994 computer game FIFA International Soccer.
An adidas billboard is displayed in the foreground of the 1994 computer game FIFA International Soccer.

[edit] Dynamic in-game advertising

A poster campaign for Tripping the Rift can be found in the 2005 computer game SWAT 4
A poster campaign for Tripping the Rift can be found in the 2005 computer game SWAT 4

Increasing Internet connectivity has led to the growth of dynamic in-game advertising. Unlike the fixed adverts found in static in-game ads, dynamic adverts can be altered remotely by the advertising agency. Adverts can be tailored according to geographical location or time of day, allowing for the delivery of time-critical advertising campaigns, such as those publicizing a movie launch. Information can be sent back from the player's machine regarding advert performance; data such as time spent looking at adverts, type of advert and viewing angle[10] may be used to better formulate future campaigns and also allows the advertising agency to offer more flexible advertising campaigns to their clients.[11] THQ also commented on how data collected from in-game advertising had an unexpected benefit as a design tool, "If the character is stuck in front of a brick wall with an ad poster on it, we know that the level might be too hard. We now see the ad-tracking system as a way to find ways to improve on a game's design".[9] Because dynamic advertising campaigns do not have to be hard-coded into the game by artists and programmers, the need for advertisers to formulate and insert campaigns months in advance of a games launch is negated.[2]

Examples of dynamic in-game advertising include the 2005 computer game SWAT 4 by Irrational Games. Version 1.1 of the game featured dynamic in-game adverts delivered by Massive Incorporated, these adverts were used to publicise forthcoming television shows targeted at a US audience. These time and location sensitive adverts would not have been effective if delivered through a static in-game advertising campaign.[10]

[edit] Online presence

Player characters are pictured in front of Media Island, Sony BMG's virtual presence in Second Life
Player characters are pictured in front of Media Island, Sony BMG's virtual presence in Second Life

Virtual worlds and MMORPGs are able host persistent online adverts, with marketers purchasing virtual real estate with which to give brands a constant online presence in-game. Aside from establishing a brand presence, it also enables companies to use these virtual spaces as an online testbed. For example, Starwood Hotels & Resorts Worldwide established the aloft Hotel within Second Life, although the real world version of the aloft Hotel is not scheduled to open doors until 2008, the online presence allows for designers to get early feedback from perspective guests.[12]

Starwood is not alone in establishing an online presence within Second Life, many brands and products have pitched up stores and attractions within the virtual world, including American Apparel, Lego, Toyota and others.[13] Other persistent online worlds which have hosted advertising campaigns include There.com, which featured a Nike campaign in 2003,[14] and Everquest 2, which even included an in-game command line function to order from Pizza Hut in-game.[15]

[edit] Advertising industry reaction

Reaction to in-game advertising from the advertising industry has generally been positive. Advertisers are keen to reach the 18-34 male demographic, and in-game advertising is seen to be a new medium in which to do so, especially given that TV viewing figures for this audience is falling. Indeed, a study by Yankee Group in 2003, showed that a 7 percent decline in TV viewing figures in the target 18-34 male demographic could be directly attributed to computer games.[4] This enthusiasm, along with the new possibilities offered by dynamic adverts has prompted a growth in the in-game advertising industry, which generated USD$56 million in revenue in 2005, but could grow up to as much as $1.8 billion in 2010 according to Massive Incorporated.[1]

The in-game advertising industry hosts several advertising agencies dedicated to the delivery of in-game advertising, including companies such as Double Fusion, IGA Worldwide, NeoEdge Networks and Massive Incorporated. The growth and potential of the market has enticed more traditional advertising agencies into exploring the concept of in-game advertising; Starcom MediaVestGroup worked with 2K Games to partner advertisers with game developers,[9] whereas Ogilvy & Mather worked with Massive Incorporated to develop a series of in-game adverts to promote the Ford Motor Company.[16]

[edit] Games industry reaction

The games industry sees in-game advertising as a promising new revenue stream. Industry figures suggest this could bring an extra $1 to $2 of profit per game unit sold towards publishers, this is a significant increase over the current $5 to $6 profit per unit.[17][4] Publishers see this revenue stream as a way to offset growing game development costs, which are estimated to rise up to $20 million per title for a 7th generation console. Some developers believe that the extra revenue will reduce the risk involved in a game development project, allowing them to innovate on gameplay and experiment with new ideas.[3][18]

[edit] References

  1. ^ a b Mike Shields (2006-04-12). In-Game Ads Could Reach $2 Bil.. Adweek. Retrieved on 2006-10-20.
  2. ^ a b Jim Jamieson (2006-10-01). Cyber-Ads Get in the Game. The Province. Retrieved on 2006-10-24.
  3. ^ a b Bobbie Johnson (2006-05-19). Advertisers get young gamers in their sights. The Guardian. Retrieved on 2006-10-20.
  4. ^ a b c Matthew Yi (2005-07-25). Advertisers pay for video games - Product placement tradition no longer free ride for business. San Francisco Chronicle. Retrieved on 2006-10-24.
  5. ^ Patrick Klepek (2006-10-19). Gamers Wary of Battlefield 2142's 'Spyware'. 1UP.com. Retrieved on 2006-10-20.
  6. ^ David Jenkins (2006-10-18). Nielsen Announces GamePlay Metrics. Gamasutra. Retrieved on 2006-10-20.
  7. ^ (May 2006) "The Making of Adventureland". EDGE (162): 104-107. 
  8. ^ Ilya Vedrashko (2006-04-16). Ads in EA Sports Games: 1994-1998. Retrieved on 2006-10-21.
  9. ^ a b c Reena Jana (2006-01-25). Is That a Video Game - or an Ad?. Business Week. Retrieved on 2006-10-21.
  10. ^ a b Andrew Smith, Peter Wood (2005-07-01). Online advertising for the gamer generation. Retrieved on 2006-10-21.
  11. ^ Simon Carless (2006-10-17). IGA's Townsend On BF2142 In-Game Ads. Gamasutra. Retrieved on 2006-10-22.
  12. ^ Richard Siklos (2006-10-19). A Virtual World but Real Money. New York Times. Retrieved on 2006-10-23.
  13. ^ Reena Jana (2006-10-16). Breathing Second Life into Business. Business Week. Retrieved on 2006-10-23.
  14. ^ Robin Moody (2003-01-17). Nike explores virtual brand placement with There.com. Portland Business Journal. Retrieved on 2006-10-23.
  15. ^ Peter Svensson (2005-02-24). Sony builds pizza-order function into 'Everquest II'. Associated Press. Retrieved on 2006-10-23.
  16. ^ Ogilvy Press Release (2006-08-17). Ford and Ogilvy play with decibels. Retrieved on 2006-10-30.
  17. ^ Dean Takahashi (2006-09-01). EA to embed ads that can be updated into 7 games. Mercury News. Retrieved on 2006-11-03.
  18. ^ William Vitka (2005-07-16). In-Game Advertising - IGA Worldgroup Leads The Pack And They Might Be Getting It Just Right. CBS News. Retrieved on 2006-11-03.
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