In-game advertising

In-game advertising (IGA) refers to the use of computer and video games as a medium in which to deliver advertising. In 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,cite web|url=http://www.adweek.com/aw/national/article_display.jsp?vnu_content_id=1002343563|title=In-Game Ads Could Reach $2 Bil.|accessdate=2006-10-20|author=Mike Shields|publisher=Adweek|date=2006-04-12] although Yankee Group gives a lower estimate at $732 million.cite web|url=http://www.canada.com/theprovince/news/money/story.html?id=242a51e1-7994-4e35-8305-cacdd0380c95&p=1|title=Cyber-Ads Get in the Game|accessdate=2006-10-24|author=Jim Jamieson|publisher=The Province|date=2006-10-01] 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.cite web|url=http://technology.guardian.co.uk/games/story/0,,1778693,00.html|title=Advertisers get young gamers in their sights|accessdate=2006-10-20|author=Bobbie Johnson|publisher=The Guardian|date=2006-05-19] 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.cite web|url=http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/07/25/BUGVRDREUT1.DTL|title=Advertisers pay for video games - Product placement tradition no longer free ride for business|accessdate=2006-10-24|author=Matthew Yi|publisher=San Francisco Chronicle|date=2005-07-25] However, some gamers see these moves as greedy and invasive, dubbing in-game advertising software as spyware.Fact|date=July 2008 This view was demonstrated by the backlash against Electronic Arts' "Battlefield 2142" which contained in-game advertisements from IGA Worldwide.cite web|url=http://www.1up.com/do/newsStory?cId=3154522|title=Gamers Wary of Battlefield 2142's 'Spyware'|accessdate=2006-10-20|author=Patrick Klepek|publisher=1UP.com|date=2006-10-19] This has not, however, 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.cite web|url=http://www.gamasutra.com/php-bin/news_index.php?story=11307|title=Nielsen Announces GamePlay Metrics|accessdate=2006-10-20|author=David Jenkins|publisher=Gamasutra|date=2006-10-18]

tatic 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 advertisements were placed directly into the game by artists or programmers and could not be changed later. The first example was seen in the 1978 computer game "Adventureland" by Scott Adams, who inserted an advertisement for his then forthcoming game "Pirate Adventure".cite journal|title = The Making of Adventureland|journal = EDGE|issue = 162|pages = 104–107|date=May 2006] Examples of in-game advertising of third party products 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 advertisements featured in-game since 1994.cite web|url=http://www.vedrashko.com/advertising/2006/04/ads-in-ea-sports-games-1994-1998.html|title=Ads in EA Sports Games: 1994-1998|accessdate=2006-10-21|author=Ilya Vedrashko|date=2006-04-16] Static advertisements allow the advertiser and developers to have more influence on how the advertisements are displayed in-game and can be worked to beyond the levels of a pure billboard. In "" for example, a large glowing advertisement 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 to overcome.cite web|url=http://www.businessweek.com/innovate/content/jan2006/id20060124_792815.htm|title=Is That a Video Game - or an Ad?|accessdate=2006-10-21|author=Reena Jana|publisher=Business Week|date=2006-01-25]

Dynamic in-game advertising

Increasing Internet connectivity has led to the growth of dynamic in-game advertising. Unlike the fixed advertisements found in static in-game ads, dynamic advertisements can be altered remotely by the advertising agency. Advertisements 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 advertisement performance; data such as time spent looking at advertisements, type of advertisement and viewing anglecite web|url=http://nationalcheeseemporium.org/|title=Online advertising for the gamer generation|accessdate=2006-10-21|author=Andrew Smith, Peter Wood|date=2005-07-01] may be used to better formulate future campaigns and also allows the advertising agency to offer more flexible advertising campaigns to their clients.cite web|url=http://www.gamasutra.com/php-bin/news_index.php?story=11300|title=IGA's Townsend On BF2142 In-Game Ads|accessdate=2006-10-22|author=Simon Carless|publisher=Gamasutra|date=2006-10-17] American video game publisher, THQ, commented in an interview that 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". 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.

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 advertisements delivered by Massive Incorporated, these advertisements were used to publicize forthcoming television shows targeted at a US audience. These time and location sensitive advertisements would not have been effective if delivered through a static in-game advertising campaign.

Online presence

Virtual worlds and MMORPGs are able to host persistent online advertisements, 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 prospective guests.cite web|url=http://www.nytimes.com/2006/10/19/technology/19virtual.html|title=A Virtual World but Real Money|accessdate=2006-10-23|author=Richard Siklos|publisher=New York Times|date=2006-10-19]

Starwood is not alone in establishing an online presence within "Second Life", many brands and products have created stores and attractions within the virtual world, including American Apparel, Lego, Toyota and others.cite web|url=http://images.businessweek.com/ss/06/10/secondlife/index_01.htm|title=Breathing Second Life into Business|accessdate=2006-10-23|author=Reena Jana|publisher=Business Week|date=2006-10-16] Other persistent online worlds which have hosted advertising campaigns include "There.com", which featured a Nike campaign in 2003,cite web|url=http://portland.bizjournals.com/portland/stories/2003/01/20/story3.html|title=Nike explores virtual brand placement with There.com|accessdate=2006-10-23|author=Robin Moody|publisher=Portland Business Journal|date=2003-01-17] and "Everquest 2", which even included an in-game command line function which could be used to order the delivery of food from Pizza Hut.cite web|url=http://www.usatoday.com/tech/products/services/2005-02-24-sony-pizza_x.htm|title=Sony builds pizza-order function into 'Everquest II'|accessdate=2006-10-23|author=Peter Svensson|publisher=Associated Press|date=2005-02-24]

Incidental advertisement

A number of games utilize billboard-like advertisements or blatant product placement for the purpose of creating a more realistic gaming environment. [Gene Emery, "What's in a Name: Product Placement in Games," Reuters, January 30, 2002] While permission to use logos, brand names, and other advertising material is usually given by the company owning the rights to these symbols, their use within the game does not serve to raise awareness of the product which is usually already very familiar to the player.cite web|url=http://www.msnbc.msn.com/id/17282642/|title=Nike challenges Adidas on its own turfAmerican company looks to cash in and kick-out German soccer sponsorship|accessdate=2008-01-29|author=Andy Eckardt|publisher=NBC News|date=2007-02-28] cite web|url=http://media.www.nyunews.com/media/storage/paper869/news/2003/09/15/UndefinedSection/Gaming.Not.Just.For.Dorks-2391513.shtml|title= Gaming not just for dorks - Dawning of the era of the armchair QB|accessdate=2008-01-29|author=Mike Drucker|publisher=Washington Square News|date=2003-09-15] [ [http://www.sportsgamer.com/pages/about/ SportsGamer.com : About ] ] cite web|url=http://www.phoenixmi.com/about/news/travel_leisure/2006110629.phtml|title= Study Looks at Brands Gamers Recall from In-Game Ads|accessdate=2008-01-28|author=James Brightman|publisher=Phoenix Marketing International|date=2006-11-06] Rather, these symbols allow the player more easily to achieve a degree of vicariism by drawing tenable parallels between the game environment and the player's actual environment. Examples of this include the "FIFA International Soccer" series without whose commercial billboard advertisements would seem unrealistic or artificial. Many sports series also incorporate this style of advertisement due to the fact that professional sports is typically subject to heavy advertisingcite web|url=http://www.businessweek.com/innovate/content/feb2007/id20070222_572137.htm|title=Sports and In-Game Advertising|accessdate=2008-01-27|author=David Radd|publisher=BusinessWeek|date=2007-02-22] and were the game to lack similar levels of in-game advertisement, in-game realism would suffer. Similarly, many games employ brand-name products such as guns and cars as status symbols within the game. Examples of this include cars by Lexus, Lamborghini, and Ducati in Atari's "Test Drive Unlimited"cite web|url=http://www.msnbc.msn.com/id/13960083/|title=Product placement on the rise in video games - Marketers desperate to engage well-to-do market of 132 million gamers|accessdate=2008-01-27|author=Erika Brown|publisher=Forbes|date=2006-07-21] and guns such as the Colt M1911, Micro Uzi, AK-47, and M16 from the "Grand Theft Auto" series.cite video game|title= Grand Theft Auto III|developer= DMA Design|publisher= Rockstar Games|date=2001-10-22|platform= PlayStation 2|version= 1.1] cite web|url=http://www.usatoday.com/money/advertising/2002-12-02-sopranos_x.htm|title=HBO shows use real brands|accessdate=2008-01-29|author=Michael McCarthy|publisher=USA Today|date=2002-12-03] In a reversal of traditional roles, gamemakers are occasionally forced to pay licensing fees for the privilege of employing logos or brand-names. Another example is the "Pikmin" series where real-life products serve as treasures to be collected,cite web|url=http://pikmin.wikia.com/wiki/Category:Ancient_Ad_Series|title=Ancient Ad Series|accessdate=2008-01-27|author=Greenpickle|publisher=Pikipedia|date=2008-01-25] this is not done to advertise the product so much as to produce a humorous environment that is coherent with our own reality.

Advertising industry reaction

Reaction to in-game advertising from the advertising industry has 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 do 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. This enthusiasm, along with the new possibilities offered by dynamic advertisements, 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. Not all games are suitable for in-game ad placement due to the time and place of games' story line. The reaction by advertising companies has been to extend advertising tools around the games, such as lobby advertising by [http://www.demonware.net Demonware] and automated sponsor-driven tournaments by [http://www.titangaminginc.com Titan Gaming Inc.] . Advertisers continue to find ways to accommodate all types of games with sponsorship or ad placement revenues.

The in-game advertising industry hosts several advertising agencies or ad networks dedicated to the delivery of in-game advertising, including companies such as [http://www.jogomedia.com JOGO Media] , Double Fusion, IGA Worldwide, NeoEdge Networks, EnterMedia, Massive Incorporated and Game Creative. 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, whereas Ogilvy & Mather worked with Massive Incorporated to develop a series of in-game advertisements to promote the Ford Motor Company.cite web|url=http://www.ogilvy.be/press/showpress.php?ID=44|title=Ford and Ogilvy play with decibels|accessdate=2006-10-30|author=Ogilvy Press Release|date=2006-08-17]

Games industry reaction

The games industry sees in-game advertising as a promising new revenue stream. Industry figures suggest that such advertisement could increase profits for publishers by an extra $1 to $2 per game unit sold - a significant increase over the current $5 to $6 profit per unit.cite web|url=http://www.siliconvalley.com/mld/siliconvalley/15417447.htm|title=EA to embed ads that can be updated into 7 games|accessdate=2006-11-03|author=Dean Takahashi|publisher=Mercury News|date=2006-09-01] 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 experiment with more innovative game-play and new ideas.cite web|url=http://www.cbsnews.com/stories/2005/07/15/tech/gamecore/main709467.shtml|title=In-Game Advertising - IGA Worldgroup Leads The Pack And They Might Be Getting It Just Right|accessdate=2006-11-03|author=William Vitka|publisher=CBS News|date=2005-07-16] In-game advertising has even replaced purchase price as a revenue model for some mobile phone games.cite web|url=http://www.mobilerated.com/news/20070319.html|title=Kalador's FreePlay in-game advertising technology for mobile phone games powers MobileRated|accessdate=2007-03-16]

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