In-game advertising
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In-game advertising (IGA) refers to the use of computer and video games as a medium in which to deliver advertising. 2005 spending on in-game advertising was USD$56 million, and this figure is estimated to grow to $1.8 billion by 2010 according to Massive Incorporated<ref name=adweek>Mike Shields (2006-04-12). In-Game Ads Could Reach $2 Bil.. Adweek. Retrieved on 2006-10-20.</ref>, although Yankee Group gives a lower estimate at $732 million.<ref name=theprovince>Jim Jamieson (2006-10-01). Cyber-Ads Get in the Game. The Province. Retrieved on 2006-10-24.</ref> In-game advertising is seen by some in the games industry as offering a new revenue stream, allowing developers to offset growing development costs and to take more risks in gameplay <ref name=guardian>Bobbie Johnson (2006-05-19). Advertisers get young gamers in their sights. The Guardian. Retrieved on 2006-10-20.</ref>. Advertisers see in-game advertising as a prime way to target the male 18-34 demographic, who are increasingly neglecting television in favour of computer and video games.<ref name=sfchron>Matthew Yi (2005-07-25). Advertisers pay for video games - Product placement tradition no longer free ride for business. San Francisco Chronicle. Retrieved on 2006-10-24.</ref> However, some gamers see these moves as greedy and invasive, dubbing in-game advertising software as spyware. This view was demonstrated by the backlash against Electronic Arts' Battlefield 2142 which contained in-game advertisements from IGA Worldwide.<ref name=1UP>Patrick Klepek (2006-10-19). Gamers Wary of Battlefield 2142's 'Spyware'. 1UP.com. Retrieved on 2006-10-20.</ref> This has however, not stopped traditional firms such as Nielsen Media Research branching out into the in-game advertising space, by announcing a new video games ratings service (similar to Nielsen ratings) called GamePlay Metrics to serve in-game advertisers.<ref name=gamasutra>David Jenkins (2006-10-18). Nielsen Announces GamePlay Metrics. Gamasutra. Retrieved on 2006-10-20.</ref>
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[edit] Static in-game advertising
Early examples of in-game advertising were static. Some of these consisted of virtual billboards, whereas others could be considered in-game product placement. These adverts were placed directly into the game by artists or programmers and could not be changed later. Examples include the sponsorship of the Zool series by Chupa Chups, leading to various displays of the Chupa Chups product and brand in the game, including a series of levels set in a Sweet world. Another early example of in-game advertising can be seen in the FIFA International Soccer series, with commercial billboard adverts featured in-game since 1994.<ref name=verashko>Ilya Vedrashko (2006-04-16). Ads in EA Sports Games: 1994-1998. Retrieved on 2006-10-21.</ref> Static adverts allow the advertiser and developers to have more influence on how the adverts are displayed in-game and can be worked to beyond the levels of a pure billboard. In Splinter Cell: Chaos Theory for example, a large glowing advert for AXE deodorant appears hard coded in the game, forming an obstacle to the player character. Not only did it allow the developers to experiment with dramatic lighting effects, it also drew the players' attention by providing them with a challenge in which to overcome.<ref name=businessWeek>Reena Jana (2006-01-25). Is That a Video Game - or an Ad?. Business Week. Retrieved on 2006-10-21.</ref>
[edit] Dynamic in-game advertising
Increasing Internet connectivity has led to the growth of dynamic in-game advertising. Unlike the fixed adverts found in static in-game ads, dynamic adverts can be altered remotely by the advertising agency. Adverts can be tailored according to geographical location or time of day, allowing for the delivery of time-critical advertising campaigns, such as those publicizing a movie launch. Information can be sent back from the player's machine regarding advert performance; data such as time spent looking at adverts, type of advert and viewing angle<ref name=nci>Andrew Smith, Peter Wood (2005-07-01). Online advertising for the gamer generation. Retrieved on 2006-10-21.</ref> may be used to better formulate future campaigns and also allows the advertising agency to offer more flexible advertising campaigns to their clients.<ref name=gamasutra2>Simon Carless (2006-10-17). IGA's Townsend On BF2142 In-Game Ads. Gamasutra. Retrieved on 2006-10-22.</ref> THQ also commented on how data collected from in-game advertising had an unexpected benefit as a design tool, "If the character is stuck in front of a brick wall with an ad poster on it, we know that the level might be too hard. We now see the ad-tracking system as a way to find ways to improve on a game's design".<ref name=businessWeek/> Because dynamic advertising campaigns do not have to be hard-coded into the game by artists and programmers, the need for advertisers to formulate and insert campaigns months in advance of a games launch is negated.<ref name=theprovince/>
Examples of dynamic in-game advertising include the 2005 computer game SWAT 4 by Irrational Games. Version 1.1 of the game featured dynamic in-game adverts delivered by Massive Incorporated, these adverts were used to publicise forthcoming television shows targeted at a US audience. These time and location sensitive adverts would not have been effective if delivered through a static in-game advertising campaign.<ref name=nci/>
[edit] Online presence
Virtual worlds and MMORPGs are able host persistent online adverts, with marketers purchasing virtual real estate with which to give brands a constant online presence in-game. Aside from establishing a brand presence, it also enables companies to use these virtual spaces as an online testbed. For example, Starwood Hotels & Resorts Worldwide established the aloft Hotel within Second Life, although the real world version of the aloft Hotel is not scheduled to open doors until 2008, the online presence allows for designers to get early feedback from perspective guests.<ref name=nytimes>Richard Siklos (2006-10-19). A Virtual World but Real Money. New York Times. Retrieved on 2006-10-23.</ref>
Starwood is not alone in establishing an online presence within Second Life, many brands and products have pitched up stores and attractions within the virtual world, including American Apparel, Lego, Toyota and others.<ref name=businessWeek2>Reena Jana (2006-10-16). Breathing Second Life into Business. Business Week. Retrieved on 2006-10-23.</ref> Other persistent online worlds which have hosted advertising campaigns include There.com, which featured a Nike campaign in 2003,<ref name=portlandbj>Robin Moody (2003-01-17). Nike explores virtual brand placement with There.com. Portland Business Journal. Retrieved on 2006-10-23.</ref> and Everquest 2, which even included an in-game command line function to order from Pizza Hut in-game.<ref name=apress>Peter Svensson (2005-02-24). Sony builds pizza-order function into 'Everquest II'. Associated Press. Retrieved on 2006-10-23.</ref>
[edit] Advertising industry reaction
Reaction to in-game advertising from the advertising industry have generally been positive. Advertisers are keen to reach the 18-34 male demographic, and in-game advertising is seen to be a new medium in which to so, especially given that TV viewing figures for this audience is falling. Indeed, a study by Yankee Group in 2003, showed that a 7 percent decline in TV viewing figures in the target 18-34 male demographic could be directly attributed to computer games.<ref name=sfchron/> This enthusiasm, along with the new possibilities offered by dynamic adverts has prompted a growth in the in-game advertising industry, which generated USD$56 million in revenue in 2005, but could grow up to as much as $1.8 billion in 2010 according to Massive Incorporated.<ref name=adweek/>
The in-game advertising industry hosts several advertising agencies dedicated to the delivery of in-game advertising, including companies such as Double Fusion, IGA Worldwide and Massive Incorporated. The growth and potential of the market has enticed more traditional advertising agencies into exploring the concept of in-game advertising; Starcom MediaVestGroup worked with 2K Games to partner advertisers with game developers,<ref name=businessWeek/> whereas Ogilvy & Mather worked with Massive Incorporated to develop a series of in-game adverts to promote the Ford Motor Company.<ref name=ogilvy>Ogilvy Press Release (2006-08-17). Ford and Ogilvy play with decibels. Retrieved on 2006-10-30.</ref>
[edit] Games industry reaction
The games industry sees in-game advertising as a promising new revenue stream. Industry figures suggest this could bring an extra $1 to $2 of profit per game unit sold towards publishers, this is a significant increase over the current $5 to $6 profit per unit.<ref name=mercuryNews>Dean Takahashi (2006-09-01). EA to embed ads that can be updated into 7 games. Mercury News. Retrieved on 2006-11-03.</ref><ref name=sfchron/> Publishers see this revenue stream as a way to offset growing game development costs, which are estimated to rise up to $20 million per title for a 7th generation console. Some developers believe that the extra revenue will reduce the risk involved in a game development project, allowing them to innovate on gameplay and experiment with new ideas.<ref name=guardian/><ref name=cbs>William Vitka (2005-07-16). In-Game Advertising - IGA Worldgroup Leads The Pack And They Might Be Getting It Just Right. CBS News. Retrieved on 2006-11-03.</ref>
[edit] References
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