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Mel Franklin takes a look at in-game advertising and advergaming

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Boston research firm Yankee Group expects the advergaming industry to generate US$312.2mn by the end of this year, up from US$83.6mn in 2004 and Pricewater-houseCoopers predicts advertising will be a key factor for US gaming revenue growing to US$950mn in 2011, in their Global Entertainment and Media Outlook: 2007-2011. Gartner research says 20 per cent of global tier-one retailers will have some form of marketing presence in online games and virtual worlds by 2010.

It's virtually real
Incredibly, in-game advertising and advergaming have been around since the mid 1980s when Pepsi and Kool-Aid Atari distributed games featuring their products as promotions and Skyworks first brought it to the Internet in 1995.

Now over
40mn Skyworks games are downloaded every month from its clients' websites and over one billion have been played to date. In-game advertising is now so sophisticated that in Everquest 2, for example, players (in certain countries) can type /pizza" and they'll be taken to the Pizza Hut website so they can make an online order.

Sophisticated it may now be but how does in-game advertising work? The formula is simple. Games are placed to attract traffic to a website and then tempt the visitor to stay longer. The longer you stay on a site and play the game, the longer you are exposed to the company's message.

Research has shown that the more well-disposed you are to a product the more likely you are to buy it. If you're playing an on-line video game, a game you've bought for your console or if you're visiting a virtual world not only do you see ads for the brand in a realistic context, for example on billboards and vending machines but you also get to interact with and use the products, building brand awareness and loyalty.

With this in mind, a number of companies including Nike, Adidas and Amazon have purchased land within Second Life to set up virtual retail outlets."The games and virtual worlds are also being used as new product testbeds. Starwoods Hotels and Resorts placed a digital version of a hotel they were planning to build in real life to see the reaction from virtual visitors," comments David Wortley of the University of Coventry Serious Games Institute.

Car companies such as Toyota and General Motors have also tested prototypes and concepts with gamesters. Sony is even developing its own virtual world. Home, as it's known, is for Playstation3 users and release is scheduled for later this year or early 2009. Users will be able to socialise with friends, attend presentations, get lifestyle clothes and set up their own 'home' that they can decorate and furnish with all kinds of (Sony) items.

All public spaces and lobbies in Home will have large, dynamic video monitors, banners and billboards advertising various products. It'll also be possible to brand areas.

EA Sports has already taken advantage of this opportunity filling one area with a number of sports themed activities.An attractive feature of in-game advertising and advergaming is that they are very measurable and tracking tools can be used to see how many people visit the game and how long they stay.

Pepsi found that 78 per cent of visitors to one of its games took part in the associated online contest and the average visitor who played the game returned four times. With access to instant results, Pepsi was able to fine tune the campaign throughout its run and as a result daily users doubled.

Branding fun Multinationals from MacDonald's and Pepsi to Toyota and Ford along with GlaxoSmithKline and Unilever have all used or use advergaming. In 2007 the Henry J Kaiser Family Foundation conducted research on 77 major food websites aimed at children, and found that an amazing 73 per cent of them offered at least one advergame.

But part of the fun of advergaming - in the corporate sense - is that anyone can play; it's not just the preserve of big companies. "In Oman local brands are starting to see the value of advergames in creating brand awareness and achieving their product goals," comments Rafid Mukadam, general manager of KOM based Infocomm and advergame designers.

"An advergame doesn't have to be a big bucks project. Simple affordable solutions are available. As long as your game is one that your target audience will find appealing - research shows women, for example, tend to play more strategy games or word puzzles whereas men like games where they score points - then you're on to a winner." Anyone can play Initially companies ventured into the gaming arena in order to reach the younger demographic group by entering their world through the games they play. And reach them they did.

Gallup shows that 62 per cent of teens play games at least one hour a week and 34 per cent play over six hours a week. And I think you won't be surprised by the findings of another research company, Digital Marketing - they discovered that 25 per cent of teens spend more time on games than homework.

Surprisingly a driving factor in children playing video games is their parents," says Ibtisam al Faruji, Head of Marketing at KOM and organiser of its Serious Games Conference. "Indeed, gaming is encouraged by many families the world over as games are perceived as educational."

They certainly reached the youth market in my house. My teenage sons are prolific gamers and don't seem to mind the ads in their games at all, in fact they say they make the games better. Nielsen Interactive Entertainment backs up this saying that 70 per cent of players like in-game advertising, saying they like the 'real' aspect the ads lend to their fantasy games.

A straw poll among my sons' friends planted at the console in my living room revealed something interesting - they're not the only gamers at home. They often play computer and on-line games with their father, even competing in some cases with him for use of the computer. Some mothers also play - sisters will play online games but seem not to be that interested in the games console - and there was even one gamester grandparent. In fact solid research backs up my rough and ready findings.

According to a State of the Industry report published by the Interactive Digital Software Association, the average gamer is around 30 years old and only slightly more likely to be male than female. Steadily and stealthily gaming has been building an audience of women between the ages of 35 to 49 - a coveted demographic for advertisers.

What's more the Entertainment Software Association, the industry's trade group, claims that 19 per cent of all computer and console gamers are over the age of 50. And their tastes are eclectic - they play everything from solitaire to shooting games - with military themed titles being a very popular option.Want to play?

According to Los Angeles based advergaming company YaYa, approximately 50 per cent of those who receive a game through a promotional email play it for some 25 minutes and an incredible 90 per cent of those who receive an email challenge to play a game accept. This level of viral marketing is exceptional. General Motors (GM) certainly found that viral marketing worked for them.

They discovered that 80 per cent of players were brought to one of their games by responding to email postcards from friends challenging them to score higher. An amazing 90 per cent of all viral game challenges were accepted; 98 per cent of the players entered into an associated competition and 28.8 per cent of the players were 40 or older.

On top of this General Motors was able to use the game to track design preferences such as models, colours and tyres for each demographic. "Viral marketing is a major factor in the success of in-game advertising and advergaming. The number of games that are recommended and passed on, and the number of challenges that are sent out and accepted is phenomenal," says Infocomm's Mukadam. If you have any lingering doubts about the effectiveness of viral marketing - just think how many funny emails you've forwarded recently - and how many of them have been forwarded on.

What's the score? So you're reaching a broad audience and the metrics are great but what about TV and more traditional advertising media? Have advergaming and in-game advertising had an impact on them?

People have long used ad breaks as a time to make tea or phone a friend and now we have the technology to fastforward through commercial breaks. TV ads are also expensive and engage you for a limited time - advergames typically engage players for 5-35 minutes and gamers often return to play more.

But these are not the main reasons for the growth of advergaming and in-game advertising. The simple fact is that we are migrating from TV to computer and games consoles for entertainment. These days, according to Direct Marketing Services, 19 per cent of males play online games more than they watch TV and 50 per cent play online games more than they read books.

By 2002 the value of sales of games consoles in the United States had already exceeded that of cinema box-office receipts. The next level So advergaming is growing but how is it going to develop? "The business of games for mobile phones must be one of the most dynamic and fast-paced industries in the world," states Mukadam with considerable confidence.

"Certainly advergaming and in-game advertising are huge but think about this - there are already more mobile phones in use worldwide than televisions and computers put together - even now the potential for advergaming on the phone is enormous. Advertisers can reach out 24/7 and once 3G kicks in properly then the sky really is the limit. Mobiles allow for sophisticated demographic targeting and you can advertise while the user is out in the marketplace.

It's mindblowing." Ahead of the game "Oman has always been ahead of the curve as far as gaming is concerned.

Dubai has announced its first World Game Summit at GITEX this year but KOM's Serious Games Conference is already in its third year," says KOM's al Faruji proudly. "Infocomm has been active in advergaming in Oman for some time," says Mukadam. "We have several projects in development for local clients at the moment but we did an advergame for Oman Mobile in 2004. We also did a popular mobile advergame for the Ministry of Sports Affairs some time back. I think it's fair to say that in Oman we're ahead of the game.""

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