• by Steve Smith , Staff Writer @popeyesm, August 22, 2006

In-game advertising has been one of the most obvious entry points for the ad-supported game model, but until now I have seen more trials and promises than actual deployments. All according to who you ask, mobile gaming seems ripe for sponsor underwriting. Some market researchers insist that portable gaming is booming and will be a $5 or $7 billion business by 2011 or so.

Others, including some developers in the industry, complain of stagnation in the market. People like playing mobile games more than they like paying for them, other stats suggest. There is little consumer demand for the kind of variety and re-purchase cycles we see in other video game platforms. Getting people to pony up for more than one game is a problem, because, frankly, we just don't care enough about these games to shop for a good one and spend $6 for it.

And so, advergaming and in-game advertising are naturals for this market. Sponsorships would let users experiment with games more widely, and could even kick-start a taste for better games for which the publishers and carriers could charge. I expect that the big dogs of PC in-game advertising, Massive (recently acquired by Microsoft), IGN, and Double Fusion will have some mobile extensions of their dynamic ad serving engines. I will keep my eye on Microsoft especially, because it clearly has visions of integrating both Xbox 360's online component and mobile content into its AdCenter engine.

But none of this matters until we actually start seeing in-game advertising in the wild. MauiGames had early but little-seen golf and sport biking games that actually included in-game ad notices. You run off a cliff in one game and you get some clever full-screen sponsor message. But the first robust dynamic game ad serving system hit the Web last week at GameJump.com. A subsidiary of GreyStripe, which developed in-game ad technology, GameJump boasts 80 ad-enabled Java based games you can download to a select line of phones on Cingular, Sprint and T-Mobile networks. GameJump has an AdWrap engine that serves full-screen units before and after game play.

For consumers, perhaps even for game developers, this may be a good deal. The catalog is not negligible. There are some decent titles in here, including some decently designed card contests and knock-offs of classic arcade titles. They are clearly a cut about the usual crap freebies. Michael Chang, CEO, GameJump, says he is trying to convince game developers and publishers to use this as a way to move their back catalog of older games. Thousands of formerly AAA titles no longer sell--or long ago fell so far down on the carrier's deck that no one gets to know they are there anymore. The publisher gets a 40 percent to 45 percent split of the ad revenue, which is running at about $30 CPMs. Even if a developer gets pennies a play, a truly addictive game can generate a ton of banners, perhaps more revenue than the split of a split the developer gets after carriers and aggregators take shares. The downside, of course, is that the model circumvents the carriers entirely, and so misses any benefit from deck presence, where up to 90 percent of games get found and bought in the U.S.

For advertisers, the real value remains to be seen, but at $15,000 minimum for a campaign, it seems an affordable place to experiment.

I downloaded two games from GameJump and was happy to see the process was easy, quick, and polite. The game warned me up front that it would need to hit the servers before and after play. The network is designed to accommodate ad placements before the game starts and at exit. The first ad unit is the only one you really have to see, however, because there are several ways the game can be ended abruptly and without seeing the exit unit. In this case the advertiser was another online mobile game portal, although Chang tells me more recognizable brands are already on board. He is selling inventory two months down the road and claims that at least one media buyer told him he could buy $1 million of space if it were available. In some quarters the curiosity about mobile and the need to place marketing dollars into diverse platforms is that strong.

But how much impact does a full screen intro ad have on a mobile phone? I was struck by how well the image, if not the portal brand itself, stayed with me. I'll defer to the inevitable Dynamic Logic post-campaign branding studies on this one, but I am guessing there is decent brand recall power here.

Chang has several ad formats, some involving direct call-backs, others linking to a WAP page and others with jump pages that allow for e-mail entry and immediate interaction. My first concern is whether gamers really want to click through to anything but the game they came to play. After all, I recall one of the problems with advertising on the early Web game portals was that gamers simply did not want to be distracted from the experience. Chang says that CTRs are surprisingly strong. He reasons that casual gamers are there to be entertained, and if an ad promises something intriguing, they are willing to take the detour. I am not so sure. This may be initial curiosity at work more than anything else. Ever try talking to a soccer mom in full engagement with the likes of "Bejeweled" or "Bookworm"? Ever try taking a crack pipe from an addict?

The good news is that a simple, static intro ad is totally inoffensive in this context. The question is whether this polite unobtrusiveness even gets noticed by consumers and then credited to a sponsor as the underwriter to this free experience.