July 28, 2005 5:11 PM PDT

Gunning for game dollars

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Play to pay: Service inserts ads in games

April 10, 2005

Advertisers to go gaga over gaming

October 18, 2004
SAN FRANCISCO--With young men--the group advertisers most lust after--watching less and less television, a growing number of marketers are turning to video games as a way to reach the lucrative demographic.

They're not the only ones jumping on the bandwagon. As evidence mounts that game players are reacting favorably to in-game ads, publishers are also finding that the medium offers new ways to offset skyrocketing development costs.

"There's a lot of background noise and data to suggest that traditional media...are in a long-term decline," Mitchell Davis, CEO of Massive, said at the Advertising in Games West conference in San Francisco on Thursday. Some 200 people packed the gathering to hear experts on the topic talk about how big a market in-game ads will be, and the ways to ensure those ads best reach their targets. Massive has built one of the largest ads in games networks, "not only in a reach and media perspective, but also in advertising dollars."

In-game ad

While game advertising is only a $200 million business this year, most experts estimate that number will rise dramatically over the next few years. By 2007, in-game ads are expected to be worth nearly $400 million, more than $500 million by 2009 and close to $1 billion by 2010. The Yankee Group reports that cable TV ad revenues are around $22 billion, and Internet ad revenues are around $12 billion.

In-game ads are taking many shapes. Most commonly, they're simple billboards for things such as movies, soda, cars and the like embedded in stand-alone titles. But now there are also interactive ads placed in online games, including full-motion video, strategically placed vending machines, branded cars and an endless stream of other options. Some games are even entirely branded marketing vehicles paid for by advertisers.

According to Davis, who delivered the conference keynote, the key to succeeding with in-game ads is making them unobtrusive, realistic and ensure that they don't interrupt game play.

"What we've seen in our research is that 90 percent of gamers like advertising in games," Davis said, "for the simple reason that it adds realism into the games."

An 'evil genius' plan?
While that statement might draw chuckles from some, such ad placement is exploding. And that, according to Nielsen Media Research, is partly due to the fact that video games have drawn away 7 percent of 18- to 24-year-old males from television.

Not everyone thinks outfits like Massive have the best interests of video games at heart.

Ian Bogost, an expert on games and an associate professor at Georgia Institute of Technology, recently slammed Massive.

"Massive understands neither effective advertising nor games, and their principal goal is to make money by providing a deluded service to the deluded advertising industry," Bogost wrote in a column on Water Cooler Games, a Web site for game enthusiasts. "Their plan is evil genius: provide a media buying infrastructure identical to that of broadcast and outdoor for an advertising industry in crisis over degrading television advertising...Nothing could be more destructive to the ad or the game."

Still, for advertisers who depend on having their message reach as many people as possible, the fact that valuable eyeballs are glued to games instead of watching television is a wake-up call.

"You're starting to see big advertisers pull money out of television," said Michael Goodman, a senior analyst at the Yankee Group. "Proctor & Gamble announced...that they are pulling money out of TV advertising because they felt they weren't getting enough bang for their bucks, and they are looking at video games as a place where they can."

Goodman added that at E3, the video game industry's giant annual trade show in Los Angeles, Proctor & Gamble had been on hand and had asked him about the medium.

"That really floored me," he said.

4 comments

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Kind of ironic to me..
In the modding community, it has not been unheard of for a group of modders to be served a Cease and Desist for putting some copyrighted texture (ie Coke sign) in a game to give it more realism. Even though the modders are giving away their mod and getting nothing in return. Now these same companies are paying big bucks to put the same textures in commercial games.

Personally, I'm not fond of ads in games. It's bad enough I get SPAM in my inbox, I don't need in my games too!
Posted by DeathMagnet (249 comments )
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They'll try anything I suppose
I can definitely see getting regular updates so every time you played the game a different AD would appear.

I personally don't care. I'd just ignore it anyway. However, since I would have purchased the game, I should have the option to turn off the ads.

On a different line, how long will it take for someone to hack the ad and put in whatever content they wanted?
Posted by vanox (49 comments )
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If they do this too much.....
It will be the death of gaming as we know it. The gaming industry now makes more money than the movie industry.

The difference is that movie goers are like my mom and don't even notice that there are product placements right infront of their eyes (perfect for brainwashing, read target audience) and gamers tend to be like me, who look for this stuff, so they can remove it or find ways to block it.

This is a dumb idea that is nothing more than flushing money down the toilet.

As for being able to shut it off. The marketing people will force the game developers to put the advertising code so deep into the executible that it will be a DMCA violation to mess with it.

I think to myself "Do the advertisers enjoy the advertsing driven world they have created or does it irritate them just as much."
Posted by SteveBarry687 (170 comments )
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Get a clue
The advertising industry and for that matter the television industry as a whole have no clue.

First of all its not just that their demographic is watching less tv and playing more games. The problem is the TV networks, cable, satellite or otherwise are no longer putting shows on that people want to watch. Prime example is all the "Reality TV" that is on most every channle. I personnaly refuse to watch any of it, it's all stupid in my book.

Because of this, of coarse advertising is going to be less effective.

For the most part, I would be very surprised to see advertising in the games I play as most are based in medieval fantasy worlds. But if, for some foolish reason it did show up in this type of game, I'll be honest here, I'd shelf the game and find something else to do that did not have advertising.
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