Gaming Uncovered: The state of play

Once the preserve of global brands, the internet has turned the in-game ad market into an exciting opportunity.

It is something of a mystery why the in-game advertising market remains more of a minnow than a monster. It offers a worldwide audience of hundreds of millions of players, all glued to their screens, and plenty of opportunities for product placement as well as more traditional advertising options. Why then have brands and agencies been so slow to take advantage?

The truth is there have been plenty of barriers that have put brands off the medium. It was impossible to buy local markets, so only global brands could get involved. Once a campaign was on a game, there was no way to remove or change it. The lead times were huge - up to a year in many cases. And advertising in games was expensive - $10 million-$15 million for a single campaign in a successful title.

Once again, though, it is the internet that is making a big difference to the market. The rise of PC gaming and consoles that allow users to connect to the web to download extra content means advertisers can now run campaigns that are cheaper, more targeted and increasingly flexible.

But,why should they want to? Aren't gamers all spotty teenagers with no cash? Not according to a recent BBC study, which showed that 59 per cent of the UK population (26.5 million people) are gamers and 45 per cent of those are women. Gaming, it seems, is no longer just for geeks and kids.

"The killer benefit of gaming is attention," Jean-Paul Edwards, the head of media futures at Manning Gottlieb OMD, says. "We live in a multimedia world and you can't guarantee people will take any notice of your TV ad, but gamers have to concentrate on what they're doing, or their character dies. Your message is much more likely to get through."

Potential numbers are impressive. Gaming is the fastest-growing form of entertainment in the world and young people rank it above TV as their medium of choice. The games market is worth more than £30 billion worldwide, making it nearly as big as the music industry. And unlike any other new advertising medium, it already has the infrastructure in place.

This creates its own challenges, according to Edwards. "Advertisers need to look at how they can add value to the experience," he says. "It's not like TV, where people tolerate ads as a way to get free content. Gaming has developed without the support of advertising, so you can't just come in now with whatever you want - badly thought-out ads that don't give anything back to the gamers will just affect sales of the games and have a negative effect on the brand."

The in-game advertising market, particularly in the UK, languishes way behind the games market itself - brands spend less than £10 million in games a year. According to Edwards, that figure is set to change. "I expect that figure to be 50 times bigger in five years - hundreds of millions of pounds will be invested by 2010 and it should hit £1 billion in the next decade," he says.

The fact that most gamers are now connected to the internet while they play - and that proportion will only increase once the next generation of consoles, such as PlayStation3, hits the market - means opportunities for advertisers are now more interesting than ever.

Rather than ads being static entities that are fixed on a game disk and appear in the same way for the life of the game, they can now be added, removed or even be made interactive via an internet connection.

Most advertising within games appears on billboards placed in appropriate locations - around racing tracks or on city streets - and, in much the same way as outdoor campaigns in real life, advertisers can now decide in what market and for how long they want their ads to appear.

"Billboards started off as basic 2D posters but now they can be electronic or appear on plasma screens," Nicholas Longano, the president of new media at the in-game advertising company Massive, says. "The only rule is that the ads have to appear in places where they enhance the environment and reflect real life - you won't see billboards in Middle Earth."

Massive has just launched a more interactive form of billboard, which enables users to click on the ad to access information, and has signed Toyota as its first advertiser. "The click rates we're seeing are already much higher than the average click-through rates for banner ads," Longano says.

However, advertisers can go further than poster ads by making their brand part of the gaming experience. The clothing brand Ben Sherman, for example, ran a campaign in the PC and Xbox 360 racing game Test Drive Unlimited, which involved both product placement and advertising.

The brand built an in-game, fully interactive store, where players could buy clothes from Ben Sherman's summer range in which to dress their characters. Ads for the store also appeared on posters within the game. The campaign also linked through to promotions in real Ben Sherman shops and had a presence at events such as Max Power Live.

According to Ed Bartlett, the vice-president, Europe at IGA Worldwide, which negotiated the Ben Sherman deal, this kind of campaign works in different ways.

"The virtual store built brand awareness," he explains. "It enabled Ben Sherman to show off its current range by letting people try on its clothes without having to go into a store. It also associated the brand with an upmarket product - the game is set in a glamorous Hawaiian location and is full of expensive cars such as Lamborghinis and Aston Martins.

"The in-game billboards had similar advantages to a traditional outdoor ad campaign, except that we could tell you exactly who saw your ad and how long they saw it for."

This ability to measure response is another big change brought about by connection to the internet. It is now possible to use the web to track exactly who is playing a game, how long they are playing for and where they are in the world. "We try to be unobtrusive - we wouldn't want to make gamers fill in forms to provide exact information on individuals, but we can collect impressions and tell who is playing and where they are," Bartlett says.

The lack of an industry-wide standard for measurement has often been cited as a barrier to growth. Massive now plans to launch its own system in the first quarter of 2007 and other specialists are working on their own measurement tools.

"The things you can track are much more advanced than in traditional media," Longano adds. "It's a great way to measure outdoor creative because the gamer decides whether to look at a billboard and we can tell who is stopping to watch your ad."

As with all internet-related media, the ability to target niche groups and analyse their responses exactly is something that observers expect to have a real impact on future growth. "In theory, you could take it down to looking at which players always choose to play as Arsenal in football games," Edwards says. "The Arsenal sponsor could then target those fans with a customised campaign and track who responds."

The more you customise a campaign, the more expensive it is to produce, although the media space itself is no longer a barrier to entry: buying simple billboard ads is no more difficult than buying internet banners. At the moment, most ads within games tend to be repurposed from traditional outdoor campaigns, but the real opportunity lies in thinking of new ways to target people in what is becoming a very different environment.

"Advertisers should be wary of trying to fit a traditional square peg into this new round hole," Edwards advises. "This is not a place to run your traditional 30-second television commercial. Agencies will need to come up with new solutions."

The key to better future campaigns will lie in giving something back to gamers. For example, advertisers could get their brands scripted into games by giving characters brand- related tools that help them progress further within the game.

Localised campaigns could be another growth area: advertisers could use information on where gamers are playing from to offer them voucher rewards for local restaurants if they complete a level in the game.

"Targeting smaller advertisers is a real opportunity," Edwards says. "Look at how Google has tapped into that market by offering an ad tool to plumbers and builders.

"Google might even get involved in gaming so that, if you're playing The Sims (a virtual-reality game in which players create characters, build homes and control their lives) and you need a plumber, you could book someone who is a real-life plumber based near where you live."

Some brands in the US are already going beyond brand-building by using online games as retail channels. Pizza Hut has developed a partnership with Everquest (, a 3D virtual reality game that enables users to play each other online.

The restaurant chain wanted to target people who were so hooked on playing the game that they would not want to stop to cook dinner. Pizza Hut struck a deal with Sony, the game's publisher. Gamers who typed "/pizza" while playing brought up a screen within the game that enabled them to order pizzas. Many gamers wear headphones when playing, so Everquest even created a system to tell gamers their food had arrived if they could not hear the doorbell.

Players in these online worlds, known as MMOGs (massively multiplayer online games), spend a lot of time creating their characters (or avatars), dressing them, creating places for them to live and work and doing things in the game that they might do in real life.

The MMOG Second Life (www. may only have 400,000 subscribers, but brands are beginning to get involved, perhaps attracted by the minimal media cost and the massive opportunity for engagement.

The clothing retailer American Apparel opened a virtual store in Second Life based on its real Tokyo showroom, enabling players to buy clothes with which to dress their avatars. The BBC has its own "island" on Second Life, which is uses to broadcast live footage of events.

In both cases the brands had to pay the game's creator, Linden Lab, for the virtual piece of land on which they built the shop or venue. But, as David Fleck, the vice-president of marketing at Linden Lab says: "Brands can get involved without paying a penny."

"What usually happens is that a brand owner calls and tells us what it wants to do and we say 'great, there's nothing to stop you doing it - and we have a developer network that can help you,'" Fleck says. "There is a cost if they want to buy real estate but, if they don't, a brand could easily get involved on its own and we would not stop it."

This could involve a brand creating things and putting them into the game for players to use. A car manufacturer, for example, could create virtual cars that exactly replicate their real-life counterparts and allow users to walk around them, play with the dashboard and even drive them.

Alternatively, an advertiser could create tools that enable players to do things they cannot do in real life. A beverage brand could make cans of drink that give users special powers when they consume them - so the value of a virtual reality world is that it is one in which Red Bull really could give you wings.

"At the moment, audiences for MMOGs are quite small, but they will grow and the boundaries between the real and virtual worlds will become increasingly blurred," Edwards says.

"The opportunities for brands are immense. In a virtual world, you can do anything - such as fly or travel through time - and brands have the budgets to create tools that excite people and allow them to do things they cannot do on their own."

Next week: Mobile Uncovered



- A huge, untapped market with a broader profile than you might think

- The ability to target specific sectors, from Arsenal fans to young women living in Leeds

- More accurate measurement than any traditional medium

- A new creative opportunity - the freedom to create something outside the confines of traditional ad formats


- The chance to develop tools that add value to a gamer's experience - brands are much more accepted in games than they are in an interruptive environment

- The ability to test your agency's creative by tracking exactly how many gamers stop to look at your in-game poster ad

- Product placement without the regulation

- A relatively low (or even non-existent) media cost.