A study commissioned by NeoEdge Networks, a Mountain View, CA-based casual gaming advertising network, says (surprise, surprise) that video advertising within online games is more effective than TV advertising. Preliminary results of the study, which will conclude at the end of this month, seem to indicate online gaming audiences are more inclined to remember and positively percieve brands who experiment with pre, mid and post-roll video advertisements inside Web-based games.
Of course, studies ordered by commercial companies with a clear stake in the subject of the research like this one always need to be taken with a grain of salt, but the results are interesting nonetheless, and deserve a closer look. After all, major companies like Google and Sony are eyeing in-game advertising revenues in a big way, and for good reason: depending on which research organization you trust, spending on in-game advertising is supposed to grow to between $732 million and $1.8 billion by 2010, although I personally believe the current economic climate might prevent spending to reach even the more conservative prediction by the end of next year.
For more context: some say in-game advertising will ruin the video game industry altogether, others believe standards will spur industry growth, and a recent article on our sister site Crunchgear (based on another study) suggested gamers don’t have a problem with in-game advertising at all.
Anyway, going back to NeoEdge’s study, which was conducted in conjunction with research agency Frank Magid Associates, this is how they came to their conclusions:
The research goal was to determine both the value of online video advertising inside of casual games and the most efficient use of video advertising in casual games. In partnership with advertiser Zappos.com, casual game players across the NeoEdge Network were intercepted with a survey request after game play. Consumers saw one of ten different online video advertising scenarios, which varied number of ads seen, frequency of ads and additional ad products. Over 2,000 consumers participated in the research study and over 1 million ad impressions were used to conduct the comprehensive research.
According to Vicki Cohen, Executive Vice-President at Frank Magid Associates, the preliminary results show a 5x increase in unaided brand awareness over TV advertising where a game included a Zappos.com ad. Other key findings according to the release: over 80% correctly linked Zappos.com as the advertiser who “allowed them to play the game for free” (who knew gamers were such a grateful lot?), while 56% had a more favorable impression of Zappos.com because of their trade-off of watching an ad for free game play.
I am skeptical that the reported uplift in percentages and absolute numbers can be generalized across all in-game advertising and more extensive research would be welcome for backing up the statement, although I am inclined to believe the notion that in-game advertising is generally more effective than TV advertising.
Then again, which form of digital advertising isn’t?
Doesn’t surprise me for the fact alone that in-Game ads are already targeted towards a certain demographics (gamers).
Did the report say what the overall in-Game ad spending / market size currently is ?
Targetted, of course. TV is dumb.
And TV is one-way traffic. In-game you can buy yourself McJunkfood and McPizza!
2.0 is about user participation.
Listen to your customer, stupid!
Interesting, great post.
Good article
Amazing!
Interesting.
Take it to next level. Difference between a game and a movie is that consumer is allowed to participate.
In-movie “personalized” video advertising.
Good article
This concept is both lame and great at the same time.
I’m alright with ads in loading screens and menus. Keep them OUT of the game, though! Ingame ads only serve to ruin the fiction of the game and smash the fourth well to bits.
The last thing we need is a McDonald’s billboard in The Lord of the Rings: Conquest.
Well of course that’s true, having a McDonald’s or any other branded billboard in a LOTR game would be ridiculous. But the fiction is not ruined when its contextualized.
I’d argue that it could bring the fiction of certain games even more to life: A McDonald’s billboard in Rainbow Six: Vegas or a Zappo’s Ad on the computer terminals in GTA IV can extend the reality that many games are attempting to create.
Therein lies the long lost secret of revenue for the creative ones!
Ridiculous? Ridiculously fantastic. Frodo needs to get it on while slamming a redbull and pounding a bigmac. Finally the future has arrived. Hitman wants a burrito, please.
Very interesting, I’ve read on another interesting solution in Techcrunch about 2 weeks ago company called Tictacti playing within that market:
http://www.tech...ame-widget-ads/
Mark
I read an article on TechCrunch last week that advertisement is doomed.
In game advertising makes for a great branding technique. Imagine the hours spent playing video games vs. watching a movie or TV show. You can see why advertisers are getting “into the game”. No pun intended.
I totally agree, in game ads have many advantages over tv ads and the player sure won’t be able to switch channel when he sees the ads coming. But seriously, i don’t say it’s good and i sure don’t want to see ads in game, but i think we’ll be stuck with them pretty soon.
Brilliant post with very relevant stuff. Cheers.
“depending on which research organization you trust, spending on in-game advertising is supposed to grow to between $732 million and $1.8 billion by 2010″
Despite this the prices for the games still remains too high. EA is particularly bad about abusive and annoying in-game adds.
I have been watching the marketplace for advergames for about 10 years – first coined the phrase over 9 years ago. I think branded games or advergames will become the high end of the casual video game marketplace along with a handful of paid for games. The economics behind advergames are not dissimilar to those of the early radio or television days when sponsors (advertisers) supported those entertainment platforms financially. Advergames will in time become the high end of this interactive form of entertainment while user (gamer) sponsored content will be seen as the PBS (Public Broadcast Stations) which are supported by individual users mostly. They will co-exist just like they do with broadcast television and over the air radio today.
http://www.advergames.com
is a flash point conceptually for advergames and that paradigm. It is the result of the medium’s success not the enabler of it. The embellishment of branded games by casual advergames players from around the world is an economic result of a balance between risk/return on the sponsors side, and risk/reward on the part of the user. It is like water finding its level in terms of what works for both the sponsor and the consumer. Advergames will evolve both episodic and multi-brand characteristics.
1) You are already seeing that with many brand companies who are releasing one great advergame after another to promote themselves and their image – this will become more predictable and systematic in the next few years – episodes of advergames just like with television series.
2) Brand companies will learn to work together to form partnerships where they can share the costs of development while cross promoting their products, services, and messages. Their understanding of what brands work well inside an interactive experience like an advergame (casual online video game) is key to this evolution. The budgets for high end multi-brand advergames will climb as a result, topping several millions of dollars each in the coming years.
3) Weak economic conditions and poor market use of this type of advertising mechanism will weed out lesser players continuing the process of brand aggregation which is now underway. There will be less brand recognition for most and more for the few smart sponsor companies who take advantage of the uncertainly and lack of foresight now engulfing the advertising market – especially on the Internet. Small companies will piggyback off of the large ones to get into their advergames with these lesser brands, beating their competition to a pulp. A small record label might partner with McDonalds to add a music track or two to a very big McDonald’s advergame. You get the idea.
4) The Internet means global becomes local and local become global; distance from a marketer to a target is no longer measured in distance (miles) but in terms of relationship. Advergames seed a solution to this sea change for branding purposes.
So, the future of gaming is going to look like the Axiom in Pixars Wall-E.
…ehh I am still skeptical but then again, the best advertising quote that I heard is the following: “Figure that half of your advertising dollars are going to be wasted every year, but no one really knows which 50% is the wasted amount…”
Love it. Great quote!
Indeed, it’s John Wanamaker’s quote, the first marketer ever.
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
The holy grail for in-game advertising is not paid placement — it’s preference placement. Just like the evolution of advertising on the web created contextual advertising (Google AdWords, anyone?), a closer relationship between game distributors (console or online), publishers, and players will increase the ability to use portable “profiles” (like we see happening now on the web) to improve targeted in-game advertising. Marketers who understand strategic brand placement would never put a billboard in a game where it didn’t fit the storyline. Instead, they’ll use the same tactics used in feature films today to insert their products into game franchises that are compatible with their brand.
Remember the movie “The Italian Job” from a few years back? The decision to use the BMW Mini in teh action sequences was not arbitrary, it was a strategic brand placement decision. The beauty of 3rd generation gaming is that (unlike a fixed image) car brands could sponsor the type of vehicle that the hero drives in the Italian Job game and tailor the action to a specific demographic. Don’t like the Mini? How about a Smart Car or a Nissan Skyline instead? With the increase in broadband capacity and usage; the growth in the DLC gaming paradigm; and the ability to target advertising and brand placement better, the future for brand advertising is much brighter than any other medium.
QuakeLive will validate this, just give it time.
o yeah i wish i can buy a can of coke or pepsi in WOW or QuakeLive.
You could order pizza from EQ
But I just read couple days ago that advertising is gonna DIEEEEEEEE!!!!
That too from a respected Wharton professor.
Stop confusing me, TC.
I’m a 13-yr-old entrepreneur. I started my biz when I was nine http://www.pencilbugs.com. In between school work and my business stuff, I like to play online video games. It makes sense that they have ads on there. More kids are playing games than watching TV. I’d like to get my product ads on some of those popular games.
people just want to skip past the t.v ads because it interferes with the show they want to watch. Thats why DVR’s are such a success. On the other hand. Advertising in video games is new, it doesn’t effect gameplay really.. It’s not like you have to stop playing for 30 seconds to watch an ad. If that was the case then people wouldn’t play games. I’d sell all my consoles and games and find a new hobby… Like walking outside. lol
CampaignEffect= Reach * Impact.
Now the impact has been proven to be 5 times higher on unaided brand awareness.
BUT, did you think about the reach of an advergame vs. the reach of television. Careful, TV rules. Unfort.