Last week I began a conversation about the growing in-game advertising industy. This week I will touch briefly on this industry’s primary consumers, advertisers, the finanacial potential and the current players.
First, let’s identify the primary consumers of such a media. Hall & Partners concluded a study commissioned by Break Media showing that 70% of Men surveyed between the ages of 18 and 34, would rather surf the web then watch TV (MediaPost.com: October 2008); 26% said they would rather surf the web then have sex! Nearly half the respondents claimed they spent more than 22 hours online, per week. We already know from my last post that the Bureau of Labor Statistics (BLS) annual American Time Use Survey (ATUS) identified the average male spends 5.7 hours per day doing “leisure” activities. About half that time (2.75 hours) is spent in front of the TV (ATUS: June 2008). The ATUS study corroborates the Hall & Partners “22 hours of leisure time” finding. In short, the primary consumer of in-game advertising is male, 18 – 34 year olds with some time on their hands or at their fingered tips as it were.
To answer the question of what products or categories are best suited to advertise in this space we need to ask what would our target demo want and/or need? Can you guess it? If you said, beverages, food, fast cars and women, you’re right. Even at the risk of sounding obvious, the research bares this out.
IGA Worldwide, an in-game advertising provider has delivered campaigns for a broad range of brands including 20th Century Fox, Gillette, Intel, McDonald’s, Puma, Toyota, Unilever and Red Bull; through leading game companies such as Activision (Guitar Hero), Atari (catalog of titles from my era), Codemasters (various fantasy titles) and Electronic Arts (Madden09 – my son’s personal favorite).
According to the Entertainment Software Association, early examples point to the future success of similar products and demonstrates critical mass. The first documented instance of in-game advertising occurred back in 1978 when Advertureland by Scott Adams advertised his then, “soon to be released-Pirates Adventure” video game. In 2002, South Beach Beverage Co., (SoBe for short) paid Ubisoft Entertainment to have the “Tom Clancy’s Splinter Cell: Double Agent” main character reach for a SoBe drink. The hope was that thirsty gamers would reach for a cold SoBe too. These two early examples point to entertainment and consumable products as categories that resonate best with the target demographic.
So what is the potential financial implications of in-game advertising industry? Nielsen Media Research predicts “in-game advertising” industry will be worth $1 billion by 2010 (less than 5% of total ad spending). A recent IGA-Nielsen study shows that 82% of consumers react positively to receiving contextual in-game ads during game play. Research data from 1,300+ consumers indicates brands receive a measurable lift in perception and awareness when advertised in-game (igaworldwide.com: July 2008).
Finally let’s look at the real players in the in-game advertising industry. Microsoft acquired Massive, an early pioneer of in-game advertising, in 2004 so Microsoft could bolster the delivery and revenue for its’ gaming ecosystems. Google’s recent partnership with Mochi Media has assembled one of the largest networks of online games through which Google can deliver ad content. IGA Worldwide continues to add to its’ list of game developers who want on board too. IGA recently announced an exclusive Sony Playstation3 dynamic in-game advertising deal (September 2008).
The main takeaway here is that in-game advertising is a fast moving and rapidly evolving industry. And one that, for now, is effectively delivering impacts both online and through game consoles.