With roughly 40 percent sales growth last year, it's clear why Dale Strang, a technology and video game publishing veteran, left his job as CEO and senior vice president of Ziff Davis' game group to run the media division of IGN Entertainment, an Internet gaming and entertainment content company. OMMA's Lynn Russo asked Strang, IGN's executive vice president and general manager, to explain what's fueling growth in interactive entertainment and why fun is proving to be so profitable
OMMA: As an industry on the upswing, what media opportunities have yet to be fully tapped?
Strang: Gaming is many billions of dollars annually, yet still early in its market life. Handhelds [and] next-generation consoles are going to explode. And with all that, come media opportunities. The biggest one right now is... advertisers are doing programs that go way beyond slapping ad units up on a Web site. They're doing programs around communities early in the game. [They are] releasing beta software to get people involved and creating high-impact advertising. And here, they're ahead of other markets.
OMMA: Is the revenue model changing?
Strang: In gaming particularly, publishers are looking to improve product placement opportunities by having consumer products offset the cost of producing the games. For instance, if you played "Tony Hawk" from Activision, you can bounce your skateboard off parts of a Jeep. They'd like to make the Jeep drivable or be able to change its colors, or to put a new model in there. But there are mixed opinions about online distribution. Everyone is worried about cannibalizing retail [and] trying to figure out whether the right model is either a full [online] launch or offering pieces, such as buying an extra capability, character, or weapon. If over a million users pay $1 for a feature, that's significant money.
OMMA: Which vertical advertising categories are growing the fastest?
Strang: Movies and TV studios are the largest growth areas. We're getting more of them and their average buys are going up because they can really move the needle of a movie release. We're seeing growth from retailers such as Best Buy and Blockbuster, as well as snack food and automotive - we've had real increases in activity from Toyota and GM. New clients include Absolut Vodka (which is age-restricted), and Tylenol.
OMMA: In client meetings, which media competencies sit at the table with you?
Strang: We deal very closely with the client. But it's everyone from product to brand to vice president of marketing, creative, account management, and research. With consumer products they want to make a big splash, so promotions and brand teams are involved. Sometimes we're talking to sales, but that's not typical.
OMMA: With so much money being made from the young male audience, do advertisers discuss how they could duplicate that success with women?
Strang: The opportunity for reaching female gamers is huge and will continue to proliferate with games that don't have an absolute goal such as the conquest or destruction of something. But as generations shift, there are an increasing number of women who are happy to say, 'Hey, I can kick your ass at this game.' They have quarterly numbers to make. I don't think they have a female initiative. But they're not saying girls don't play games.
OMMA: What does the future hold?
Strang: Someday you won't go to a store to buy a game. In a few years, people will play games from a TiVo functionality that has no wires, has a headset they'll use as a phone, and will play a game against someone, chat with someone, and trade games with someone. And the future is not that far off.