• by Tameka Kee , February 7, 2008

New research from RealNetworks shows that video ads may be an ideal monetization model for downloadable casual games.

The digital entertainment company surveyed 1,500 gamers across its family of RealGames sites (including RealArcade.com and GameHouse.com), and found that nearly 90% of respondents said they would watch video ads before and during natural breaks in the games in exchange for free play.

The 12-question survey was conducted over a four-week period in the fourth quarter of 2008, and the respondents skewed heavily female and between the ages of 35-64 (65%)--demographics that fall right into the sweet-spot range for casual games.

Just over one-third of the casual gamers surveyed said that they take further action and click on in-game ads to learn more about the featured product or service, while 31% said that they actually "like" watching the video ads for various reasons, with RealNetworks pegging some of those reasons as "the relevance of the ads to their needs" and the "short break from game play that the ads provide."

According to Chris Houtzer, senior director of new media at RealGames, the company was confident that the video ad format was successful, but wanted some concrete evidence that they could present to advertisers (aside from CTRs and impressions). "We knew that our users were adapting to this new model, but all the metrics, from game-play times, to additional downloads, to acceptance of the ads were elevated compared to our expectations," Houtzer said.

Over half (55%) of respondents said that they would watch any ad, regardless of the topic, while about a third said they would prefer to watch ads that were relevant to their needs. Out of roughly 10 different categories, entertainment activities, hair and skin care products, and home cleaning products were the top three types of products or services the gamers preferred to see.

While the survey did not provide data on metrics like brand affinity, intent to purchase or ad recall, Houtzer said that RealGames would be working with specific clients to develop studies that related more specifically to their ad objectives. "But this data proves that casual games are a legitimate advertising medium, especially for video," Houtzer said. "With pre-roll and video between game levels, advertisers are seeing higher-than-average metrics and game developers are seeing more revenue. We're extremely happy with what we're seeing now--especially the ad sales team."