• by Ross Fadner , November 2, 2003

As the major broadcast networks, Nielsen Media Research and some major ad shops sleuth out the case of the missing 18- to 24-year-old male TV viewer, others believe they have simply shifted time to new medium. And it's not just the Internet.

The reality is that young males - especially those of the Generation Y - are doing a lot of things, much more than just watching TV. They're on their phones, listening to music, chatting on instant messaging services, sending emails, searching the Web, doing their homework and eating dinner-probably all at the same time. And one thing they increasingly are doing is playing video games.

The video game industry is one market that's doing just fine by Gen Y. In fact, it's doing far better than just fine. U.S. retail sales of video game hardware, software, and accessories outpaced the movie industry at $10.3 billion in 2002, a trend that is certain to continue this year and into next. Also, according to research conducted by Forrester, video game consoles were found in 38.5 million homes in 2002-another trend that's certain to continue to grow.

Regarding the network TV ratings plunge among young adult males, Paul Woolmington, president and CEO of the Media Kitchen, says, "It's no great shock to me-but, no, they haven't gone anywhere. You have to believe that they're doing so many other things. Video games are now a part of their expanding repertoire; it's a frightening prospect for television."

The younger generations' intuitive understanding of media is crucial to understanding how to market to them using new media, says Woolmington, noting they are no longer the passive audience of earlier generations. "You can't just give them a textbook-you have to play with these things to understand this demographic," he says.

Michael Gartenberg, research director at Jupiter Media agrees that video game advertising and especially product placement increasingly will be tactics for reaching such consumers. Product placement "is certainly becoming more possible right now. The market is already large and growing steadily, plus the enhancements in high resolution technology can now make products more visible on the screen," says Gartenberg.

"In a world where it's increasingly difficult to market to consumers, product placement is becoming a very important way to reach them," Gartenberg adds. The success of product placement in movies and on television is well documented, and some see video games as the next generation. Some agencies, including Starcom MediaVest Group's Play unit, have begun planning video games as part of the media mix.

The Media Kitchen's Woolmington, for one, believes video games are terribly under-exploited and underestimated by advertisers. However, he points out that video game pose a new challenge for agencies and marketers alike.

Video games require especially long production cycles-in some cases up to a year. The ad industry is used to far shorter timelines. The long lead times make it hard to plan campaigns that far in advance, and with a fast-moving consumer base, trends come and go all the time.

While video game product placement has proven to be a positive media buy for some advertisers, there are issues related to control over adverting and game content. Advertisers have normally had little say over the content in a video game. In most instances, big game producers merely consider additional ad revenue a bonus, so if an advertiser doesn't like the content, they can take it or leave it.

Making matters even more complicated for marketers is the fact that many of the most popular games, like Rockstar's "Grand Theft Auto: Vice City," involve violence, theft, murder, prostitution and drugs. That's probably not the kind of thing someone would want associated with most consumer packaged goods brands.

The gaming public is also very attuned to what's cool and what's uncool, and that represents another kind of risk for marketers since there are no guarantees and very few games go on to sell in the millions.

A few brands have already tried it. And it's not just the sports franchises where stars like Tony Hawk headline their own games. In Tony Hawk's Pro Skater 3, producer Activision sold DaimlerChrysler's Jeep Brand a billboard in the background of the game's skate park.

In the sci-fi racing game "Wipeout XL," you can clearly see billboards for Red Bull in the racetrack background. And you can actually send cabs in "Crazy Taxi" to Kentucky Fried Chicken. In "Die Hard," ads for Motorola pagers and Zippo lighters are visible in the Nakatori Plaza section.

While advertisers increasingly are testing the video game waters, Media Kitchen's Woolmington maintains the industry is an as-yet untapped resource for marketers. "Video games are a huge phenomenon," he says. "They're here to stay, and with the incredible intensity of the user's experience, you've got to assume that if you can place yourself in the right context, then there could be considerable benefits."