In-Game Ads Grow Up And Show Signs Of Market Value

Remember when in-game mobile ads were the rage? If not, let me jog your memory. Just two years ago, mobile in-game advertising had some market wins including “RadioShack Sees 8.4 % Brand Awareness Increase” and “Jeep claims brand-awareness lift from mobile games ad campaign”. The implementation types included mobile game pre-roll, interstitial, and post-roll, where users who downloaded and played mobile games received the games free if they would put up with advertising during game loading or scene transitions.

The adver-gaming, as it was called, was effective, and I even recall several advertisers who supported some of the mobile games that I downloaded back then.

A Passing Fad

The strength and value of those ads no longer have the same impact or influence. The number of mobile ad networks has increased, and as a gamer I no longer tolerate full-screen/take-over ads if I can avoid them. Like most gamers I’ve since learned how to avoid and/or close those ads almost without thought. As it stands, I barely notice mobile ads, and the ‘ad blindness’ on mobile now feels about the same as it does on my desktop web experience.

Back in the 2005 time-frame, there was a buzz cycle around in-game advertising, leading Massive, an in-game advertising pioneer, to get acquired by Microsoft in 2006. The criticism at that time was “Who would accept in-game advertising?” The concept was novel and the demos, though slick, were difficult to value.

Racing around at 100+ MPH while billboards showed major brands as you sped by, and war games and first person shooters with clean undamaged brand signage was interesting but difficult value proposition to believe as an advertiser. Indeed, when I read about layoffs in Microsoft’s Massive group hit 28 percent in 2009, I wasn’t surprised.

Glimmer of Hope

I was, however, pleasantly surprised when I saw two new tidbits that suggest in-game advertising may be putting together a better market offering. The times, games and technologies, have changed; creating more relevant opportunities for in-game ads. In a success story for Microsoft search engine Bing, the Massive group inserted Bing Ads during in-game searches for slam dunk videos in ‘NBA 2K10’ and during games of ‘DJ Hero’  where the ads suggested finding ‘noise ordinances’ for the game using Bing.

The result? Two-thirds of gamers visiting and searching on Bing after the campaign was run were first time visitors, amounting to a 108 percent increase in search volume by gamers.  Another key result? 71 percent of gamers recalled seeing the ads.

In a related win for in-game advertising, Electronic Arts and Nielsen reported that in-game ads drove increased spending by households for Gatorade by 24 percent with an ROI of $3.11.  Nielsen tracked the purchasing habits of households who had purchased at least one of six EA Sports games, where Gatorade product placements abounded in arena signs, player water bottles, score updates, and other locations. Those household behaviors were compared to households that did not purchase the games.

The sales lift and ROI look good from the surface, and if true, represents a good start for making in-game advertising pay-off. The obvious confounding factors not readily obvious in the release were the presence or absence of controls for year-over-year differences in sales, sport seasonality, household participation in outdoor activities and sports, and independent market spend by Gatorade for advertising.

I’m not sure if in-game advertising is close to reaching its potential, but with the recent wins, I’m starting to see at least a few segments where there’s hope. Sports are already overrun with ads in the physical world, so it makes sense that games could be a rich point of opportunity. Likewise, search habits also exist for game related content, both in and out of games, and appears to be another valid opportunity. So it seems that more study is warranted, just be ready for the new search engines and products that adver-gaming may lead you to.

About Duane Kuroda

Business ninja, deal hunter, Internet marketer, and technology fiddler obsessed about growing companies and launching products. Currently at Peerspin, Duane’s past lives include Vice President of Marketing roles at companies leading micropayments, Internet video, and online communities as well as research and consulting for mobile advertising. Duane has spoken at conferences including Digital Hollywood and Digital Video Expo on topics covering monetizing online content and online video, has appeared on TechNowTV and KNTV, and has been quoted in various magazines. Follow Duane on Twitter: @dkuroda.

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