In-game advertising: some thoughts

Reading Time: 3 minutes

I got to start thinking about this post when I read about Microsoft closing down its in-game adverting business Massive. What makes a company turn its back on a sector that it spent 200 million USD getting into in the first place? Especially when a player like Electronic Arts has doubled down on in-game advertising and is running agency sales itself now.

I first of all considered the different categories of advertising that you were likely to have in games:

  • Custom-made games | branded content
  • Payola-type business
  • Product placement
  • Display advertising

In-game advertising

Custom-made games usually means reskinned mature game formats. This has been done for years and is the bread and butter of many development companies and interactive agencies. Probably the most outstanding example of this is America’s Army. From the beginning the game was designed to get information on the US Army in front of prospective recruits and reduce the number of people who leave through training. The game managed to successfully engage in an audience | brand dialogue and managed to reduce the cost of acquisition of recruits by a factor of 50 – 80 compared to television advertising campaigns. America’s Army isn’t cheap, costing 2.5 million USD | year back in the mid-noughties but it provided good value. It could be argued that the success of America’s Army paved the way for other people to pick up the torch on behalf of the US Army with games like Medal of Honor (Tier One Operator) or Call of Duty: Modern Warfare II.

At the other end of the scale I once PR’ed a Tetris-like game that was created for a washing powder online advertising campaign. And to this day I had no idea how it was measured.

Payola-type business – ‘paying to play’ to get exposure at live venues is something that was an established part of the music industry. This was extended into the video game industry with Electronic Arts and their EA Trax business which partners with major labels. This could be a powerful tool for the labels. If you want to have an idea of the power one only has to look at the growth in popularity of Dragonforce driven by ‘Through the fire and flames’ featuring on two installments of the Guitar Hero series of games, or the whole subculture that has sprung up in Japan and beyond around video game soundtracks. How this will play out in the future given the dysfunctional nature of the music industry is anybody’s guess.

Product-placement – Gamers tend to be people with a modicum of disposable income and the power of product placement can be seen in the demand that US consumers had for the Nissan Skyline GT-R in the late 1990s, that they successfully petitioned the US National Highway Traffic Safety Administration to allow imports of 1990-99 models. However, given the violent nature of many games there may be a limited demand for product placement. Even if a product may be suitable the parent company may not have the risk appetite to participate in many of the most popular games.

They may instead seek to participate in product placement on a safer form of media like television or films.

Display advertising – probably one of the best longterm successes in this space has been Habbo Hotel who provide a mix of advertising formats that can sit anywhere between straight display advertising and a more branded experience. However display advertising poses a number of problems. It is notable that EA pulled its advertising business inhouse and has focused on providing clients with superior metrics.

But gaming display advertising is likely to compare unfavourably with other types of online display advertising. The advertising is all about reach, calls to action would be likely to disrupt game play as would sharing with others – this has a serious impact on the creative aspect of the adverts. Getting the display advertising to appear cohesive with the rest of the game experience is likely to be an issue, except with stadium based games where you would expect advertising hoardings anyway. There are some challenges in targeting which may be based on the most basic demographics and geographic location; a lot less data than the likes of Yahoo! could provide you with.

You would run similar reputation risks as you would with product placements in game. Then there are better established formats like television and traditional online display advertising which agencies  and clients are more familiar with. Given all these considerations for display adverts, for many games you would be backing a loser. Whilst casual games would offer an opportunity for risk averse clients to get involved many of the factors are still equally relevant.