• by Ross Fadner , May 10, 2004

As intrigued as advertisers have recently become with the idea of advertising in online and console-based video games, the surface has yet to be scratched. Sports games, racing games, and a few select espionage titles have demonstrated effective in-game product placements--but the mantra, among marketers at least--is to exercise extreme caution in this space: Gamers tend to be a skeptical bunch, and they're not willing to have their content infiltrated with blatant product plugs and brand images.

Game developers are realizing that now that the interactive entertainment category has become an $11 billion market, the opportunity is too significant for marketers to ignore. Even Nielsen Entertainment announced its plan to develop audience measurement tools to monitor the effectiveness of console-based video game advertising in order to provide marketers with a means of evaluating in-game advertising.

According to Erik Whiteford, director of marketing for software giant Electronic Arts (EA), "depending on where in-game branding is put, companies [can get up to] thousands of impressions per gamer." For marketers, these numbers are impossible to overlook.

However, upon scanning the plethora of video game blogs and games information and opinion sites available to consumers on the Internet, one gets the impression that gamers are worried about the repercussions of allowing marketers to permeate their hallowed space.

For example, blogger Dave Long from "Quarter to Three" gripes that "[in-game advertising] is a bad trend that's filtering over from filmmaking. Find a company to put their product in your movie, and then use your characters to promote their products while they promote yours. It sounds good from a monetary standpoint, but I think it truly cheapens the character and the film's content. 'Tomb Raider' and the Bond films all suffered for it. I don't want prominently placed products in my games unless it's simply real-world modeling that dictates it. Auto-racing Sims come to mind as one legitimate use."

There is absolutely a right and a wrong way to tap the video game market, according to P.J. MacGregor, vice president and partner, Play--the Starcom MediaVest Group unit devoted to the branded advertising applications within gaming. MacGregor says that a "value exchange" must take place between the consumer and the game environment, and marketing messages cannot disrupt this exchange.

Speaking from Los Angeles on the eve of the Electronic Entertainment Expo (E3) show, MacGregor adds: "Advertisers have to be more mindful of this than in other [advertising] spaces," noting that "there are all sorts of ways to screw this up. Most game environments don't lend [themselves] to advertising. God help us if we ever see McDonald's cheeseburgers in 'Final Fantasy,'" MacGregor says, adding that he'll be forced to quit the day that happens.

According to GameWatchers.net writer Travis Wannlund, advertisers have screwed up games with misguided advertising in the past. In a review for snowboard game "SSX 3," he writes: "my last and final gripe about this game is the blatant product placement. The game is heavily sponsored by Honda and DNL [7Up's new overly caffeinated sugar water]. It seems that every billboard in the game is dedicated to either one of these products. They have no purpose for being in the game except for the fact that the buyers of this game are the 'target demographic' for these products. They add nothing to the game play in any way shape or form."

MacGregor says that advertisers need to be wary of this. He says that advertisements need to "add value or some layer of realism" to be accepted by gamers. Sports and racing games, he says, are perfect for placing billboards in stadium or racetrack backdrops, because they're produced with a likeness of a television broadcast.

"Consumers are used to seeing advertising in these environments," MacGregor notes. "When it comes to sporting games [product placement] can be a positive way of extending equities. If I were in EA's shoes, I'd want Coca-Cola and other brands in my [baseball] park for the sake of realism."

MacGregor says that he sees positive development in these gaming sectors for advertisers in the short term. He cites espionage title Tom Clancy's "Pandora Tomorrow" for its main character's usage of a Sony Ericsson mobile phone as another acceptable form of product placement because it's a believable, seamless integration of a product in a game. MacGregor adds that product integration in massive multiplayer online games (MMOG) would be welcome if advertisers could find a way for their involvement to underwrite some of the monthly cost associated with these games. Square Enix's enormously popular multiplayer online role-playing game "Final Fantasy XI," for example, costs an additional $12.95 per month and $1 extra per character added in order to participate in the game. If advertisers could help underwrite the additional cost of these games, players wouldn't mind the intrusion as much, he says.