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Apologies to John Adams for paraphrasing his famous quote, but his saying is particularly relevant today considering the number of media reports about in-game advertising I've read that have been filled with inaccurate information and wild speculation. So taking a page from the Founding Fathers of the US, I want to set the record straight by divulging five basic facts about in-game advertising.
Fact #1: In-game advertising is thriving.
Industry reports indicate that in-game advertising will continue to rise with research from Screen Digest estimating the global in-game advertising market will reach $1 billion by 2014.
For our 2009 fiscal year, Massive achieved an impressive double-digit year-on-year revenue growth in the face of one of the worst economic crises of the last century. We're seeing light at the end of the tunnel and Massive already exceeded first quarter sales targets by more than 100% just one month into our new fiscal year.
Massive also recently booked its 1,000th client campaign, a sign of our continued momentum since selling our first dynamic ad four years ago. In-game advertising remains an important part of Microsoft Advertising's offerings to agencies, advertisers and publishers and we're extremely excited about our prospects for the future.
Fact #2: Gaming connects brands to valuable audiences.
Gaming is one of the fastest growing global entertainment forms and marketers recognize the unique opportunities it presents to reach the holy grail of advertising - the elusive male 18-34 demographic who spend less time watching TV and more time playing video games. Nielsen recently reported that that videogame console usage was up 21 percent in June over the previous year with gamers spending an average of 12.8 hours playing games in the month. While the recession has impacted new game sales, time spent playing games - and seeing dynamically inserted ads - continues to increase.
Combine that mass game consumption with Massive's reach to over 40 million Xbox and PC gamers in 31 countries worldwide and marketers have tremendous opportunities to engage this key audience.
With the maturation of the industry, we've seen the brand categories incorporating in-game advertising expand into virtually every vertical. Massive has run campaigns for Quick Service Restaurant (QSR), Consumer Packaged Goods (CPG), Auto and Entertainment brands to name a few. In fact, Barack Obama even utilized Massive's in-game advertising solutions as part of his "Obama for America" campaign.
Fact #3: In-game advertising works.
Research in North America indicates that in-game advertising is a highly successful medium for brands. Since 2006 Interpret Research and Nielsen Research have conducted over 80 studies across more than 30 clients' campaigns in 15 different industries on the Massive network. Using the data collected from this research we've created in-game advertising norms on brand recommendations and recall. We've continuously seen positive trends on these norms and 2009 is no different:
We attribute this sustained positive trend to better publisher integration, more premium placements within games, leveraging past research data and analysis to develop more effective creative and increased audience reach, among others.
Fact #4: In-game advertising is measurable, inexpensive and easy to do.
As with other forms of digital advertising, in-game key metrics available to advertisers include reach and impressions, time and duration of exposure, day part and geography. For the second consecutive year, ad impression processing and reporting across the Massive network has been accredited by Interactive Media Services Group Ltd. Massive was the first in-game advertising network to undergo a third party audit process and we remain focused on responding to market needs for more accountability. The industry is focused on driving the development of standards in collaboration with the IAB Games Committee to drive this progress and have just released In-Game Advertising Measurement Guidelines.
In-game advertising is an inexpensive medium with CPMs in line with cable TV rates for young demographics. The insertion process for in-game creative is also uncomplicated, as ads can essentially be popped into a game, with minimal customization. A campaign can be turned around in a matter of days and ads can be changed while in flight. This becomes increasingly beneficial for existing digital campaigns, as the quick turnaround time for in-game ads can easily extend a campaign to another screen.
Fact #5: Gamers like it.
In order for an ad to be incorporated into a game, the ad needs to enhance the entertainment value of the overall game experience, never detract from game play, and add realism to the game - meaning, ads in games are integrated in locations where one would expect to see ads in real life. Our process of integrating ads is done with gamer satisfaction being the most important criteria, and Massive makes sure that every new in-game ad goes thru extensive testing with gamers prior to placement.
Our research indicates that most gamers like advertising in the game because it adds to the realism. Imagine playing a Major League Baseball game with no ads behind home plate, next to the scoreboard or on the outfield wall - not very realistic. Now imagine the outfield with up-to-the-minute ads you just saw on television or read in a newspaper - the latest movie release, television show, or a new car model. That is much more realistic.
Gamers are consuming the experience with the ads. The ads add to and enhance that experience, which our research shows is highly effective for both game play and advertisers.
I hope this post has given you some helpful insight into in-game advertising and shows it as an effective, scalable, accountable, engaging medium that brands are increasingly including as part of their media mix. With a blockbuster video game lineup for fall and winter, we expect more marketers will turn to in-game advertising as a cost effective way to reach and engage their audiences. Game on.
Thanks
JJ
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Hi. I think you may have been high when writing this. While i'll cede every point you made in explaining why in game ads are good for advertisers, please do not insult anyone's intelligence by saying gamers "like" ads. No one likes ads. Especially not in a product we just dropped at least $50 for. If the ads allowed the price to drop from $50 to say $30 and were relevant, yes they'd be kind of cool. The opposite is true, game prices have gone up.
Playing a major league baseball game without ads to distract me from what I am trying to do would be refreshing, the fact that the developer had enough respect for me to not violate my recreation time to make money for itself would be nice. It's bad enough I pay $80 to go to a real baseball game only to be advertised to at any possible opportunity, I certainly don't want it to happen when I'm at home playing a game.
I think you confuse putting up with ads because there's not a damn thing I can do about them other than not play the game with "liking" ads.
I hope after that rant when you curl up on the couch to watch a show on your DVR you make it a point not to fast forward the commercials.
As I said on the Joystiq comment - ingame ads should bring the costs of games down somewhat, in my opinion.
I wouldn't say gamers like it, but rather they accept it as long as it fits into the scenery, is not too prominent and, most important, offers something in return (such as cheaper games).
Ars Technica did a follow-up that clarified some of the issues raised in this blog and echoes some of the comments here. Check it out at...
arstechnica.com/.../massive-gm-advertising-makes-games-better-when-done-right.ars
Games are more popular with the youth and the advertisements based on their interests will become popular at a rapid pace..
What is the maximum reach and frequency (over a month say) that an advertiser can achieve now with an in-game advertising campaign, given the current state of the infrastructure?
games now is a big business that still growing up rapidly day after day, There is a huge audience for games, and the players are from all ages, kids to adults, by putting ads in games, this will bring more profits to the games companies and i don't know if it gonna bother the gamers or not.
My only concern is the first point - if massive was doing so well why were many people laid off last year?
Playing a major league baseball game without ads to distract me from what I am trying to do would be refreshing, the fact that the developer had enough respect for me to not violate my recreation time to make money for itself would be nice. It's bad enough I pay $80 to go to a real baseball game only to be advertised to at any possible opportunity, I certainly don't want it to happen when I'm at home playing a game.<a href="www.actualtests.com/.../a>
Same thing in the Flash game industry. Publishers need them to have a profitable business and if they are well implement in games and are attracting for players, instead of annoying, it's a win-win situation!
I think it's a great idea to include advertisements within games as long as they don't take it too far. If they do it can really damage the reputation of the game and in some cases ruin the gameplay
I think it only makes sense that in game advertising is thriving.
Now even in tv shows they are taking old reruns and digitally placing new advertisements in the background. I think doing things like this is cheap, but really if I was in their position I think i would do the same for a little extra profit.
It is how the mobile industry used to be and a lot of companies are trying to get in on digital advertising through showing multi media but a lot of them won't succeed. I think the best way to place these ads are through internally built ad structures that support multi viewing. Users will get the best experience this way and not many people will complain.