The hottest trend in video games has nothing to do with 3-D graphics, big-brand tie-ins or real-time multiplayer.
It’s advertising. And it’s coming to mobile gaming.
In-game advertising is rapidly attracting the attention of brands looking to get face time with the Holy Grail of demographics: teens and young adults. Console and PC gamers have become accustomed in recent years to seeing banners on the sidelines of video sports titles, for instance, and branded billboards dot the urban landscape of first-person shooters.
Grand Turismo, a popular console title, features sponsored cars blanketed in NASCAR-like logos. Earlier this year, Vodafone Group plc became the first mobile operator to use the marketing tactic, tapping game-maker THQ to place its Vodafone Live brand in the console game Juiced.
Other games feature more aggressive efforts. Hive Partners, a self-described interactive branded-content company, has worked with publisher Team 17 Software Ltd. to make products key pieces of a game scenario. Worms 3D, a PC and console title, allows characters to down a Red Bull drink to replenish energy levels. By integrating brands with game play, marketing companies can create strong branding ties without alienating gamers, said Andrew Sispoidis, chief executive officer of IGA Partners North America.
“The idea (with Worms 3D) was that when you’re incorporating an advertising message into a game, it has to be done in such a way that it doesn’t detract from the gaming experience,” said Sispoidis, who acquired Hive Partners earlier this year. “In fact, it should add to the experience.”
Some publishers go even further, building games around specific products or brands. Such “advergames” are becoming common on the Internet, where players get a cheap or free gaming experience as big brands tout their wares.
Analysts say marketing through video games is just beginning to gain steam, and advergames will lead the way. Video games will generate nearly $260 million in advertising revenue by 2008, according to the Yankee Group, $92 million of which will come from in-game ads. The balance-an astounding $168 million-will come from “advergaming,” or games developed specifically around a product or brand.
IGA, Massive Inc. and IGN are among a handful of companies that work to create more nuanced video-game marketing campaigns. Massive, which surfaced earlier this year and boasts $17.5 million in venture capital, often uses subtle shading to place brands in understated, lifelike scenarios that appear more like snapshots than commercials. A soldier appears next to a darkened billboard promoting the U.S. Navy in Splinter Cell: Chaos Theory, for instance, and a gun-toting officer scans the room for bad guys as he stands next to a Coca-Cola soda fountain in Swat 4.
While such tactics have drawn the ire of gaming purists, it appears most gamers are tolerating-if not quite embracing-in-game advertising. A recent Nielsen Interactive Entertainment study found that 50 percent of gamers said in-game ads make games more realistic, while only 21 percent disagreed.
What’s more, games can be more effective than other media when it comes to conveying marketing messages. The survey showed an in-game marketing campaign resulted in a 60-percent increase in awareness for a new product, and 54 percent of respondents said in-game advertising “catches your attention.”
Double Fusion, a San Francisco-based in-game marketing company that recently closed its own $10 million round of financing, conducted the survey with Nielsen.
“Video games are the fastest-growing consumable entertainment medium on the market,” said Guy Bendov, Double Fusion’s co-founder. “More and more 18- to 34-year-olds are spending both time and money on gaming, and reaching this highly desirable audience is of the utmost importance for advertisers and marketers.”
Many believe that if in-game marketing is effective on other platforms, it could be doubly so in wireless. Not only are the demographics drastically different-console and PC gamers are generally young males while wireless users are more a cross-section of consumers-the connectivity of a phone allows advertisers to tweak messages during play or between games.
“The problem (console gaming companies) have is that not many consoles are connected to the Internet,” said David Fradin, president of MauiGames. “You put the ad in the game, and it’s stuck in their for the rest of the game’s life.”
Perhaps the earliest player in the wireless in-game space, MauiGames launched an embedded advertising initiative more than two years ago. It began developing and producing its own ad-driven titles after failing to attract the attention of bigger mobile entertainment publishers. The company has created a platform that allows advertisers to embed ads that can be customized based on changing seasonal promotions, marketing strategies and branding efforts.
“Most of the game developers and publishers don’t understand advertising,” said Fradin. “They view it as something that gets in the way of them finishing their game.”
But those views are changing: MauiGames has since struck relationships with three undisclosed major publishers, Fradin said, and plans to launch a title with one of them early next year.
Wireless networks and handsets today are too limited to support the kind of sophisticated interactive ads seen on PCs. However, IGA’s Sispoidis said next-generation technologies will allow publishers to work with marketing companies to create engrossing games that double as advertising vehicles. And IGA has created a software development kit that can track product placements to determine their effectiveness, and marketers eventually could send messages based on user profiles, past interaction or even location information.
“The sophistication (in wireless) isn’t there today to create a very compelling product placement,” Sispoidis said. “But in late 2006, and especially in 2007, you’ll see some titles coming out that are stunning; very compelling.” RCR
