Rivals Stake Out Market For Online Video Game Ads

by , Sep 26, 2004, 12:00 AM
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Two up-and-coming rivals in the new frontier of online video game advertising are poised to capture a portion of the nascent market with new deals.

Massive Inc., after generating buzz for its delivery platform at the Electronic Entertainment Expo in May, readies itself for its official system launch this week. The company has already signed third-party game developers Vivendi, Ubisoft, Konami, and Atari.

Three-month-old inGame Friday announced an ad delivery deal for Ziff Davis Media's DigitalLife trade show, to take place on Oct. 14-17. inGame expects to deliver two million impressions to promote the show. At the trade show, inGame will unveil GameServer, its new in-game advertising platform. inGame will also deliver ads for the trade show to video gamers.

Both Massive and inGame implement a piece of code into game software, enabling it to communicate with an ad server, which then displays an advertiser's branded image or message during real-time game-play. The companies say they can serve ads to any gaming platform-console, portable console, PC, online network gaming, or mobile phones--as long as it's Internet-enabled.

Both platforms enable advertisers to target by demographic and geographic location, and adjust campaign duration in real-time. Targeting features must be agreed upon with game developers, and usually require players to provide opt-in registration.

Widespread deployment of such technology across various gaming platforms would provide a new--but long-awaited--opportunity for Madison Avenue, which has long been frustrated by the challenges of advertising to video gamers.

Despite similarities in their respective systems' technology, inGame and Massive are initially going after different markets.

According to inGame CEO Darren Herman, in the short term, inGame will be focused on establishing online networked games as an advertising medium before concentrating on the PC and console markets. inGame has distribution deals with PHXX and GriffinRUN--two of the largest public online gaming networks, comprising some 100 to 150 million impressions per month--and is in talks with other major networks including CyberAthletes Gaming League and the Global Gaming Network.

InGame is also in talks with major game developers and console providers, but its discussions on this front are not as far along as those of Massive.

Massive will initially go live with online PC games from third-party software developers. Ubisoft's Splinter Cell--Massive's first major title announcement--was set to be unveiled at the system launch, but has since been delayed until next year, according to Richard Skeen, vice president-advertising sales, Massive Inc. Skeen said other Massive-enabled titles will be released before then, but declined to specify further.

With Massive's ad server, advertisers buy square and rectangular image units, which are then integrated into a game's virtual world via texture-mapping.

"Entertainment marketing is taking an increasingly larger share of advertising budgets," Skeen said. "Video games are about to explode."

Skeen said that despite inGame's emergence, Massive doesn't feel like they directly compete in the same space--yet. However, inGame's Herman and Massive's Skeen have both said their companies intend to build an ad-serving network of all the major game publishers.

Skeen said that other game publishers might choose to roll out their own ad serving systems and then sell the technology to others, but the industry would probably prefer an ad serving standard to come from a neutral party.

Skeen said that Massive is in accelerated talks "with all but two" of the major third-party game developers. He added that the top 20 publishers make up around 80 percent of video game market sales.

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