Gaming Continues to Score with Advertisers

Originally Published: October 2005

In previous columns, I have discussed how the nature of marketing has been steadily shifting over the last several years as consumers gain more and more control. They now have the power to skip over ads using DVRs, block online ads with ad-blockers in web browsers, block telemarketers by adding themselves to do-not-call lists, instantly research and compare similar product offerings online and have generally elevated their level of buying. No longer can a company produce a general ad for all markets, blast it out via mass media and expect a plethora of consumers beating down their door for the product. The new era of marketing requires highly targeted campaigns that reach prospects when each is ready to actively seek information about a particular product or service by way of the communication vehicle of choice. Because of this shift, marketers are constantly looking for the latest, most effective and efficient tools for reaching targeted prospects. One of the more recent trends is to target consumers where they “play”, using online and console (Xbox, PlayStation 2, GameCube, etc.) games.

There are two forms of advertising when it comes to games, in-game advertising and advergames. In-game advertising includes product placements, such as Nike shoes on a college basketball player in EA Sports’ NCAA basketball game, or in-game advertisements and sponsorships, such as advertising on a skateboard ramp in Tony Hawk’s Underground 2 game or a player entering the “Old Spice Red Zone” on EA Sports’ NCAA college football game. According to Deloitte Corporate Finance, product placement in games is expected to rise from $10 million in 2000 to $45 million in 2007, and, according to The Yankee Group, advertisers spent a total of $34 million on in-game advertisements in 2004 and that amount is expected to explode to $562 million by 2009. Advergames, on the other hand, are developed by a brand to further promote that brand. For example, on Jeep’s website, they have an entire page of “Jeep Games” where gamers can navigate difficult terrain in a Jeep or even pull competitor SUV’s out of the muck when they get stuck. According to The Yankee Group, including advergames, total game advertising will approach $1 billion by the end of the decade.

The reason advertisers are flocking to games is due to the nature of games themselves. Players become engaged and fully interact with the subject matter. This gives marketers a highly captive audience in which consumers can be taught about a brand while being entertained. If the game is effective (fun and engaging), consumers come away with a good impression of the brand and get excited about the product being offered. In addition to capturing gamers’ attention, games increase brand awareness, create positive associations between the game and a company’s brand or product and even increase purchase intent. Effective games deliver messages that influence consumers in a positive way and create active dialogue about the brand and products. Online games even allow you to easily track user behavior and gather important demographic data. You can also rotate ads within games easily, allowing you to switch ads at different times or to sell ads based on the number of impressions or games played.

However, companies cannot simply produce any game and instantly create a flock of rabid brand fans. The game has to have the right context/fit for the brand being promoted. For example, it would not be wise for squeaky-clean, kid-friendly Lego to create a violent first-person shooter game. You do not want to force the brand into a game. Instead, you should create the game around the brand. For example, navigating an all-terrain driving course is a perfect fit for the outdoorsy Jeep brand, as is a product placement in a basketball game for Nike shoes. Along with creating a game around a brand, it is important that in-game ads or product placements mirror real life as much as possible. An ad on the scoreboard in a football game seems natural because it occurs every time you turn on a football game but interrupting a car racing game in mid-action for the announcer to tell you about a new cologne would be obtrusive. The game/advertising mix should be seamless. The consumer should not be harangued, as savvy consumers will turn the game off or simply navigate to another site.

Another reason games are becoming so popular is the sheer volume of players. Some hit games have seen five hundred thousand to well over a million unique players over a 3- to 6-month period because if a gamer enjoys the game, he or she will forward it on to friends who in turn forward it on to their friends in true viral marketing fashion. Regularly, players spend anywhere from a few minutes to over an hour playing at one time. Considering most TV and radio commercials are 30-seconds in length, the “stickiness” of games is very appealing to advertisers and they basically get to repeat a several minute long commercial over and over again. Studies have also shown that games are capturing a larger share of consumer’s time at the expense of traditional media like TV. According to Sony, one of the strongest times for online gaming via the PlayStation 2 is from 5:00 to 11:00 pm. This means most PS2 gamers begin playing several hours prior to primetime and finish well after, so these players are either recording their favorite primetime programs (and most likely skipping the commercials) or ignoring the primetime lineup altogether.

According to researcher IDC, the main player in an average home spends more than two hours a day and four days a week playing video games, and other recent studies put the average age of players at 25 to 28 years old and getting older as those that grew up on video games begin to age. Surprisingly, according to Mediaweek, women over 40 spend the most hours per week playing online games, more than men and teens. They spend 9.1 hours per week playing (which makes up 41% of their total weekly time spent on the Web) whereas men spend 6.1 hours per week playing online games (which makes up 26% of their weekly Web time).

Music companies are even entering the gaming world as they place their artists in games where the music is repeated constantly throughout game play. Along with the music, an MTV-like listing of the artist, song title and CD title sometimes appears on the screen to further promote the band. Many game creators have begun selling these spots to advertisers including Electronic Arts and its Madden football game, the Grand Theft Auto series, which has become famous for its extensive soundtracks (among other things), as well as many other games.

While the upside of games is huge, there are some important things to consider when contemplating the production of a game. First, if you market to children, it is important that you be careful not to gather data from young gamers, as there are extensive privacy laws that are routinely enforced. In addition, it is important to note that with the growth of highly graphic-driven games, consumers increasingly expect more and more sophisticated games. If an advertiser is paying for a game, it is important that the quality be reflective of the price – consumers do not want to play another free solitaire game that they can find anywhere on the Web. Therefore, it is important that the game quality meet the audience’s expectations. If the brand requires a technically sophisticated game, it is important to note that high quality, cutting-edge games require a lengthy development process and costs can be higher than most people expect.

But if you have adequate time for development, in-game advertising and advergames can be very effective tools for reaching your target audience, capturing their attention, building positive brand associations, creating buzz around your brand and even driving consumers to purchase. Any one up for a little Madden football? I’ll even let you pick the teams.