Standards will drive in-game advertising growth

I just read that in-game advertising company IGA Worldwide is struggling. Obviously the economic downturn isn't helping anyone. But video games have stayed strong and as more games use Internet connections for new content, one would expect such a company to be doing well.

It appears that if IGA falters it may be its own fault, having made some bad deals for upfront payments. But that's only part of the story. The bigger issue is that in-game advertising is not like other mediums and requires the industry as a whole to mature.

The current problem is that every in-game advertisement is a custom project. You can't just pop in text or graphics as you do with an ad network such as Google or Yahoo and have it appear correctly in a video game.

Even if games use the same engine, it doesn't mean that the developers have implemented everything the same way. Unlike Flash or Java games, you are dealing with a vast array of different technologies (3D and trapezoids and such) that are not common in other advertising scenarios.

Let's assume that the technology problems can be solved. What are some of the business issues facing in-game advertising?

• Lack of standards. The ad buyer working off a spreadsheet sticks to what they know and will slot their ads into places that they know will work (for better or worse).
• Few success stories. The biggest success story to date is the Obama campaign's usage of ads in Madden and other select games
• Lack of vendor options. It's bad enough that there are only a few big game publishers left. Forced customized ads that aren't dynamically changeable makes the whole the process less appealing. At least with a banner ad you can move between networks.

On the positive, users have repeatedly said they are OK with ads, along as they don't change the gameplay. And the more that dynamic content heads into games, the easier it will be for advertising to play a role. Standards will be key to the maturation of the market.

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[Aripekagator]

In game advertising was doomed from the start. The value added proposition is weak and the mechanics which they are delivered by are complex and monopolistic by design (barrier to entry is high due to prohibitive implementation costs). A lot of money has been lost already with no real breakeven point in sight.

On the other hand, advergames are booming and continue to evolve towards becoming the premium space within the causal gaming paradigm. Advergames offer a branding opportunity that is both cost efficient and widely available. Eventually, the high end of the casual gaming marketplace will be defined by a very limited number of traditional casual games which will clear profitability because of their quality (value proposition) and the high end of the advergames marketplace (which bypasses the normal economic filters).

For "Only the very best Advergames!" check out www.advergames.com - the world?s best advergames showcase. This site features great advergames from many of the best developers in the world.

Thank you very much and enjoy all the free fun!

[Len Bullard]

The closest thing the gamers accept is Flash and it is by no means a standard.

This stuff is easy in X3D. The game industry works tirelessly to keep that off the pages of your blog and the radar screen of the customer. Yet in the end, it is content that has value and the propriety of the engines is just the 1980s way of keeping you hooked on graphics crack instead of letting the industry move toward true open standards.

The game industry is coming into the cultural cross-hairs. The deals with other media that produce such bad movies as The Watchmen produce the bad games such The House of the Dead. The deals with the virtual sex community that leave Linden Labs fighting their own netizens over the need to separate business and carnal content are signs of the struggle as the worlds industry, the game industry and the other media wrestle with a change of the cultural zeitgeist they assumed they controlled.

It's always a surprise when the fish bite back.

[CassandraNuttall]

The assertion that every in-game ad is a custom project overstates the facts. Massive pioneered the in-game advertising space four years ago and with our dynamic in-game ads we can essentially just pop in creative with minimal customization, turn a campaign around in a matter of days, and change ads during a campaign flight. Indeed these techniques were used successfully in the Obama campaign mentioned in the article, which ran on our network. We?re also focused on driving the development of standards and play a key role on the IAB Gaming Committee to drive this progress.