In-game advertising is effective at increasing awareness & purchase intent

MUMBAI: Video games are no longer the preserve of hardcore enthusiasts. Gaming is now a huge global entertainment phenomenon and presents a great opportunity for advertisers.

In its latest study on in-game advertising, global media communications company Initiative states that this format of advertising is an effective and relevant way to reach audiences that spend an increasing amount of time with games. This form is essentially the practice of serving ads into a game‘s virtual environment.

In-game ads can be targeted based on location, demographics or time. They are effective at increasing awareness and purchase intent. The study further states that in the future, there will be direct response mechanisms built into the formats, and the level of integration will become even deeper.

The global gaming phenomenon

Video gaming is a massive industry. In 2009, the industry posted worldwide revenues of $57bn according to DFC Intelligence. The industry is divided into two broad groups: casual and core. Casual games are easy for a new gamer to pick up and play. They are usually on the PC, although they are also available for mobile phones, handheld devices, and Nintendo‘s Wii. Core games - the more traditional types of games with steep learning curves and complex gameplay - are on both the PC and consoles, though the market share between the two depends on geography. In the US, consoles have the larger user base for core gaming.

For casual games, the major players are usually specific to the local language. For example, in the US, Yahoo! Games is a major gaming property, but in German speaking countries, is one of the most searched for game portals. For English speaking countries, besides Yahoo!, some of the major players are Electronic Arts‘ (EA) and Playfish, Zynga, and WildTangent. Nintendo has a strong presence with both casual gamers and core gamers with its DS system, the Wii, and the proprietary franchises for both systems. The other major core game players are Sony with the PS3, and Microsoft with the Xbox 360. Major game publishers include EA, Ubisoft, and Activision.
For core games, there are now longstanding content franchises worthy of note. Nintendo has the iconic Mario, The Legend of Zelda, and the Pokémon franchises.

Microsoft has the rights to Halo. Sony has the God of War games. EA has The Sims, FIFA Soccer, NBA Live, Madden NFL, Tiger Woods, and Rock Band. Ubisoft has Tom Clancy‘s Ghost Recon/Rainbow Six/Splinter Cell franchises, Assassin‘s Creed, Rayman, and Prince of Persia. Activision has the Call of Duty franchise (including the record holding Modern Warfare 2), Guitar Hero, and the Tony Hawk skateboarding games.


Put simply, in-game advertising is serving ads into a game environment, but the nuances vary dramatically. For some 3D games, in-game ads appear as posters or billboards in the virtual world. For online 2D casual games, in-game ads can replace an object in the game with a branded product, or even serve a branded quest into the game for a week long run.
In-game ads can be "static" or "dynamic." Static in-game ads are baked into the retail version of the game, such that every player will be exposed to the ads throughout the existence of the game. Static ads can be delivered to offline gamers, and the level of integration exceeds dynamic ads. However, the static format is not generally recommended - except for simple product placement - as it involves a complicated and costly buying process which is unable to meet specific deadlines and there is also a lack of measurement.

When people in the industry refer to "in-game advertising" today, they are usually talking about "dynamic" in-game advertising. Dynamic in-game ads can be served-in on the fly to predetermined inventory positioned in the game environment.

That inventory can be as simple as a billboard in a sports stadium or as complex as a plot hook leading to a branded quest. Depending on the party serving the ads, dynamic in-game ads can be targeted based on user demographics, geo-targeted, and day-parted. Impressions can be measured and reported. Unfortunately, dynamic ads require the game to be played online to work. This issue becomes marginalized as consoles become increasingly connected and distribution skews toward digital distribution and downloadable content. For casual and social games, there is substantial opportunity for in-game advertising due to the inherent connectedness of the platforms. However, the space overall is still fragmented, so while some properties have ingame ad solutions, not all casual games offer this.

There are substantial benefits to be gained by a presence in-game, including awareness and purchase consideration lifts, but the core argument to be made in favor of in-game advertising is that of attention shift. According to ESA, 68 per cent of US households play video games. While it shouldn‘t be a surprise that over 82 per cent of tweens and teens consider themselves gamers (source EPD), there‘s been a dramatic growth among boomers - over 25 per cent of US adults over 50 play games (ESA). Overall, gamers spend an average of eight hours a week playing online games (potentially addressable by dynamic advertising).

Of US gamers, 60 per cent are male, and 40 per cent are female. As video games take on an increasing role in consumers‘ lives, brands that engage in the medium become increasingly relevant. Additionally, as the space is still evolving, it hasn‘t yet become overrun by advertising. Increased relevancy and greater share of voice should be very attractive to brands.
Internationally, the behavior of gamers varies between regions. As an example, in China, only 68 million people play online games, roughly 7 per cent of the population (Niko Partners). Gaming takes place on the PC in Internet cafes and 87 per cent of these gamers are male, and 81 per cent are under 25. Even within fairly similar markets, there are variances.

In the US, 46 per cent of social game players are over 50, whereas in the UK it‘s only 23 per cent (PopCap Games). When considering ingame advertising for a given market, figuring out the specific behavior and demographics is clearly crucial. Also, it is important to bear in mind that in-game advertising capabilities don‘t always extend across geographies for a given platform. The scale and speed of this attention shift is dangerous to ignore. Many people reading this will be familiar with the slide showing how long it has taken different media to reach a scale of 50 million users. Radio took 38 years. TV took 13. But social gaming site Farmville, which launched on 19 June 2009, reached 50 million users by 1 October of the same year. Currently, over 20 million of Farmville‘s 80 million plus monthly active users visit the application every day.

Social games present a very exciting opportunity for marketers. Traditionally, gaming has been treated as a silo in media plans, but this is changing. Now, a mobile or search call-to-action can drive activity to other media channels, and content or messaging can unify in-game elements and separate platforms. Because most social games utilize Facebook as a core platform, they are adjacent to one of the major touch-points in many social media campaigns. The social gaming market is still quite nascent, but it can be expected to evolve quickly to allow for ad formats that bridge in-game units with Facebook fan pages and social content, delivering true cross-media integrations.


In-game ads are effective at increasing brand awareness and purchase intent, and especially effective at priming audiences for engagements and sponsorships within associated gaming environments. Consumer sentiment regarding in-game ads depends on how naturally they fit within a game environment.

Microsoft‘s Massive, an in-game ad serving company for the PC and Xbox 360, has regularly performed research with Interpret around their in-game ad services. Across over 85 studies from 2006, the performance of in-game ads has been found to increase purchase intent by 24 per cent, brand recommendation by 23 per cent, and overall brand rating by 32 per cent.

Joint research led by Initiative and Microsoft has found interesting comparisons between Xbox LIVE dashboard ads and TV. The research found that while TV spots have fixed lengths of 30 or 60 seconds, interaction with the Xbox LIVE dashboard ads nears or exceeds 300 seconds. This has obvious benefits. For one brand, unaided recall for the Xbox LIVE dashboard ad was 90 per cent, whereas recall for the TV ad was only 78 per cent. The Xbox Live dashboard ad also resulted in higher levels of cognitive and emotional response than the TV ad.

For cross-media comparisons of in-game ads specifically, Hall & Partners Research for all Massive in-game campaigns sees ad recall for in-game ads at 56 per cent, versus TV at 32 per cent, or online and print at 17 per cent and 18 per cent respectively.

What type of communication is most suited to in-game advertising?

Gamers are focused on their game, so you need to keep messages simple and direct. This makes it ideal for awareness campaigns. It is also effective at increasing purchasing intent and especially effective at priming audiences for engagements and sponsorships within associated gaming environments. You can use in-game to support other media when you are looking to achieve frequency against a hardto- reach audience with a brand awareness campaign. If one‘s wider campaign is static and highly visual, in-game can be a great medium to boost awareness.

What categories are big in in-game advertising?

Entertainment brands have a natural fit with the gaming environment. However, there are a wide range of categories that are seeing the benefits of in-game: if your audience are active gamers or your category fits in the environment of the game then it could be for you. Automotive, beverages, fast food brands, and a host of packaged goods advertisers have all seen the benefits of in-game advertising. But if you are financial services brand, it‘s probably not for you.

When one should consider in-game advertising?

If you are looking to reach an 18- 34 year old audience and want to avoid clutter, then you should consider in-game advertising. It is also a great platform to reach children and when they are most engaged. You should also consider in-game advertising when there is contextual relevance. If your brand or creative is aligned with the theme or environment of the game, then you are likely to be able to achieve meaningful exchanges with a high concentration of your target.


The future of in-game advertising is a bright one, the study reveals. The opportunities on the horizon could easily move in-game advertising into a must do for activating social engagement or creating immersive brand experiences.

Recently, Massive announced a partnership with ComScore to address the lack of third party measurement needed to compare in-game exposures with other media channels. As current and upcoming campaigns run, it will be interesting to see how ComScore‘s measurement of the activity matches to Massive‘s and the extent to which this enhances the role of in-game media for brands.

Complicating this issue - though increasing potential opportunities - is the recent news from EA that they will no longer be working with third party ad servers for serving ads into their games, instead opting to sell the ads directly.

EA has been outspoken about moving from seeing games as products to seeing games as services, with additional content over an extended period of time. The opportunities that come out of this will greatly increase the relevance of in-game brand engagements for audiences, with formats likely allowing dynamic serving of fully-fledged game experiences built around the brand.

The growing social games movement should be of particular interest to advertisers. Whereas traditional games only offer passive ad engagements on a one-to-one basis, social games allow for direct response and are built on the premise of viral growth. These games are built from the ground up as viral engagements that keep users coming back frequently, and as such are well positioned to deliver results for advertisers. Expect to see in-game ad formats and opportunities being built around integration with a brand‘s social media strategy.

The possibilities include: in-game content that unlocks based on user engagement on a Facebook page, or brand engagements in the game being seeded out to an individual‘s social network.

And what about the potential to move from CPM to a cost per smile or hug? Microsoft‘s Project Natal should provide some interesting opportunities. The infrared camera add-on for the Xbox 360 will allow for a "controller-less" experience. In the immediate sense, the built-in facial recognition will allow for more accurate targeting of dynamically served ads for logged in accounts. Farther out, Natal will both broaden the demographics using the console, and open up the opportunity for more engaging ads that get consumers to use their bodies to interact. As an example, pantomiming a picture frame around an in-game billboard might be a method of direct response for a RFI. The potential is great, but the reality will depend on what Microsoft decides to support.

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