As marketers build experience points, they sell the player, not the game
Pushing it, you open up the engine and let the car go, but it's not responding the way it used to. Getting tired of the 120 mph cornering performance of your track-ready BMW? Does hitting the far turn at 140 mph feel a bit sluggish? Players of the Codemasters racing game GRID hate when that happens. But now they can take that old clunker and flip it on eBay Motors. Yes, eBay Motors.
It's pavement meeting pixels: In a novel integration of real and virtual worlds, gamers buy and sell cars and upgrade parts in that brand's virtual marketplace within the game. More than a simple logo or passive branding, the in-game execution made the eBay Motors brand an integral part of the game play experience. "It was critical to do it in an authentic way," says eBay Motors vice president Rob Chesney. "We are trying to keep that brand image strong with Gen X and Y auto enthusiasts." By the time the cross-platform game title finishes its life span, eBay estimates that its deep integration in this critically acclaimed racing game will bring it 36 million hours of brand exposure. In a launch contest, 2.4 million players downloaded the game before release, and one of them won a real-world $90,000 Mustang GT-R from eBay. The goal was to extend the product experience, not just the brand, to a specific audience. "It seemed like a no-brainer," Chesney says. "It is important for us as a company to understand this medium: How can it, and should it, link to the online world? We have to have it on our radar screen."
In just the past two years, gaming as a brand-marketing platform has gone from test runs to sophisticated programs and deep integrations such as eBay's. Experienced advertisers who are into the games industry are far beyond courting the coolness factor of being "in the game" and slapping billboards and logos into Madden NFL '09 stadiums. In last year's Electronic Arts skateboard title Skate, a T-Mobile Sidekick provided the game navigation. For some brands and properties, gaming has become a tactic in a larger strategy. Players of EA's Tiger Woods golf title go to the Buick Clubhouse to outfit their players, unlock new challenges and even win real-world prizes. Players challenge one another to perform golf tricks. Buick was using gaming to test the medium and the brand with a younger demo. "We can look at game sales, pass-along rates and also third party research to measure whether we are moving the needle with these guys," says Matt Story, director of the Play division at Denuo, which designed and executed the plan.
Brands no longer want to be in the game so much as of the game. Blizzard's monstrously popular World of Warcraft online game has now become a setting for stand-alone video spots that feature Toyota trucks and Slim Jims. The blockbuster Guitar Hero franchise has an Aerosmith edition, with a Metallica version on the way. The Sims has an Ikea Home Stuff add-on. "Brands are looking to go deeper than billboards," says Manny Anekal, senior manager of in-game advertising at Electronic Arts. "They are looking to go into story line integration."
Indeed, the story that gaming has to tell media planners has itself become deeper and more compelling in just the past year. The popularity of games like Guitar Hero and the dominance of the Nintendo Wii among next-gen consoles have exposed a broader gaming audience of young women and families to buyers. The online casual segment, which heavily skews to 40-something women, has gone ballistic - it's become the real growth engine in the field, with 200 million players worldwide producing $2.2 billion in revenue and countless page views. No one believes anymore that gaming is just about the 18- to 24-year-old "lost boys" of non-TV viewers. But even that segment is a bigger force than ever. Hard-core gaming consoles Microsoft Xbox 360 and Sony PlayStation 3 occupy more than 15 million U.S. living rooms, and both are now feeding dynamic ad campaigns into games and downloads of movies and TV episodes.
The segment is evolving into a genuine platform with multiple channels that can target a range of marketing goals and audiences. Once a backwater of small test buys and brand experimentation, video game advertising spend will grow from $502 million last year to $1 billion by 2012, says eMarketer. After years of warm-up, gaming may be ready to play. "We believe there is a game out there for everybody," says Jonathan Epstein, CEO of dynamic in-game ad network Double Fusion. "New models, new content and distribution will blow open the market. Those trends will turn what we do into a multibillion dollar industry."
Mom's Got the Controller
While in-game integration on the major consoles draws much of the press's attention to marketing in and around the platform in its early stages, the under-reported online casual market has been quietly building critical mass. Companies like WildTangent, RealGames, Arkadium and Shockwave have built massive audiences for ad-supported puzzle and card titles that attract more women than men - and the over-40 segment.
"The average 40-year-old mom won't call herself a gamer, but she may play 15 hours of Sudoku online," says Jessica Rovello, chairman of games developer Arkadium. Media research firm Interpret estimates that in 2007, casual games reached 145 million U.S. users 12-65, and 71 million of those played for an hour or more each week. Rovello's company has 2,300 casual gaming engines that are distributed via Hearst Digital Media, Publishers Clearing House and even the AARP. For brand advertisers, a 17-minute average hang time is reason enough to wrap an ad around a puzzle game. Better still, 85 percent of these players say they prefer ad-supported free games, and Rovello sees in this a lot of leverage for marketers.
Video spots in front of Flash-based games have become an important part of the model because these are pre-rolls people are willing to endure in order to get a long and entertaining payoff. But sponsors and publishing partners now find that the category has multiple uses, like incentivizing sweepstakes entries and newsletter subscriptions and forging deeper relationships with a brand. Consumers recognize the value exchange more readily with games than with other media and are willing to vault well-executed roadblocks. "Games really help to drive user behavior - anything you are looking to have a consumer do," Rovello says.
In fact, online games can not only push user behaviors but monitor and leverage them. "You can use games as a tool for innovation beyond marketing," says David Edery, worldwide games portfolio planner for Xbox Live Arcade at Microsoft. His upcoming book, Changing the Game: How Video Games Are Transforming the Business World, points to examples like Chevy Cobalt Labs, where users can design and race Chevy cars, then spend their winnings to virtually customize their ride. What they choose tells Chevy a lot about what its target market values in a car. Or, a company can use gaming to push lucrative behaviors. Google Image Labeler makes a point-winning game out of users tagging images for the search engine. In the much-maligned Second Life virtual world, an Imax promotion for the last Harry Potter film recruited virtual street teams to distribute in-world movie T-shirts. "Games and alternative worlds can be more than tools for gaining brand," says Xbox's Edery. "They can be tools for generating innovation through customers."
The Out-of-Game Experience
Just being aligned with the gaming experience can be as effective as plopping cans of your client's energy drink into Metal Gear Solid. "We can deal with not being in the game," says Noelle Sadler, project manager of video game initiative at Havas Media. Sponsoring a free month of World of Warcraft or a free pack of add-on tunes for Rock Band are ways of being with the gamer but not necessarily in the game.
Anekal recalls EA's Battlefield 2124 developer balking at the cost of releasing a follow-up map pack for the game until they took it to Intel for a sponsorship. The Intel moniker was not appropriate to insert into this futuristic virtual world, but they created humorous bits that wrapped around the pack. "We are starting to get developers discussing future sponsorships for things like map packs so they can plan with advertisers first," he says. "It's a huge opportunity for brands to take advantage of that out-of-game experience," says Denuo's Story. He points to Coke's alliance with Microsoft for Halo 3 - a game world in which the legendary soft drink had no logical in-play role. And this is where brands get some comarketing leverage in a realm that relies first and foremost on sales revenue, not advertising. "If that partner can help amplify that game, then the game companies really care," Story says. "Producers will create opportunities for brands to live in that world."
Havas' Sadler says she is seeing this desire to align coming at her from both the brand and game sides. "We have hundreds of requests for tie-ins with Grand Theft Auto, which is a major brand in itself." At the same time, she is besieged at events like the Game Developers Conference by small game shops looking for sponsors to help underwrite the rising cost of game-making. "At the end of our panel, we were bombarded by business cards."
The around-game opportunities for brands are evolving both offline and online. As television vehicles, competitive video game tournaments have struggled through various sponsorship models and limited on-air audiences. "We flipped that model," says Mike Sepso, cofounder and chairman of Major League Gaming. Even though MLG hosts a live tournament series that attracts up to 10,000 spectators and 2,000 competitors, "this year, most of our audience and business is online." Instead of fighting for TV exposure, MLG produced full TV-grade video coverage of the events to stream live from its site. Sponsors like Dr. Pepper, Old Spice and Stride can integrate with the event and sponsor teams, but they may get more mileage by wrapping themselves around MLG's video streams and Web-based tournaments. "Almost 370,000 men watched those broadcasts online, and compare that to a primetime TV demo of 90,000," says Sepso, who now serves up to 7 million video streams a month. TV doesn't necessarily rule for the 40 million online multiplayer gamers, so sponsors have to eschew old biases and follow the numbers. "The consumption of video on our properties online far surpasses anything we can get on TV," Sepso says. Smart brands find authentic ways to align with this audience's passion points wherever they are.
While many casual and online game marketers dismiss in-game dynamic ad serving as a languishing fantasy, the model is poised to prove (or disprove) itself now that the current generation of connected consoles is open for business. Microsoft's Massive ad network maintains a monopoly on serving through Xbox 360, but Sony finally announced it was opening ps3 titles to the technology. IGA Worldwide is the first of what might be several Sony partners. As games like Guitar Hero broaden the male-dominated console demographic and new techniques emerge for inserting brands into games on the fly, many in the industry still argue whether dynamic in-game ads across tens of millions of consoles will be the next big ad platform.
For now, dynamically served billboards and truck skins are good for things like fast food or that weekend's movie releases. The in-game networks have gotten sophisticated enough now to drop time-based and regional campaigns into targeted audiences. Subway is one of the heaviest advertisers on the platform. "They incorporate it strategically," says David Smith, CEO of Engage In-Game Advertising, an independent agency that helps deploy the campaigns. "They know the MLG audience is eroding. They see this as their media buy and their insurance policy." The networks on which Smith buys can use DMAs and specific game titles to regionalize $3.99 sandwich offers to northern California players in family-friendly E- and G-rated games. "We are starting to see some clients carve out video game advertising to complete all the touch points," Smith says. While metrics are still young and more anecdotal than comprehensive, a new multi-brand study involving Taco Bell, Jeep and Wrigley in IGA's in-game network showed a 44 percent increase in post-game aided recall from ad exposures, according to Nielsen.
In the next stage of the technology, even more sophisticated in-world objects will become dynamic. Brand positioning, which used to be static and required baking sponsors into titles months in advance, is suddenly as fluid as a Web banner ad. Dropping sponsored 3D elements into game worlds creates new possibilities. "You can tell a packaged goods manufacturer that we can give you a can in a game as a power-up," says EA's Anekal. "When the technology catches up to the market, you will see dynamic ads really take off." Unless, of course, the inventory and the audience really aren't there. Only a portion of Microsoft and Sony consoles are connected to the Internet to allow for dynamic serving, and they may not be the broader audience that CPGS target. In fact, the missing player in this platform's roster is the one with the deepest penetration into that coveted family demo, the Wii. Nintendo is selling two and three times the volume of its game consoles as Microsoft and Sony, but it shows no signs of engaging the ad model at all.
And that basic fragmentation of the medium's major hardware players demonstrates how immature gaming remains as a media platform. Agency and brand understanding of the opportunities and pitfalls is scant, and ROI metrics are rudimentary. "We have a couple of ways of looking at success, but no market-mix models," Story points out. "One thing that has hurt us is not having industry standards," Anekal says. "Reach, ROI and research." The technologies are in an early stage of evolution, and unlike other media, the game publishers themselves still see this ad revenue as incremental rather than core to their business models, although the online PC market is farther along in this regard. Leading-edge marketers are indeed starting to see how gaming fits into their own larger game plan, and discrete marketing channels are starting to emerge. Expect a long load time, however. Anekal admits that even after three decades, "We often look at this as year zero."