Commentary
What If Video Games Were Measured Like TV Networks?
- by Dave Morgan , Featured Contributor, June 10, 2021
The incredible growth of video gaming has been well reported. Console and PC games like Fortnite, Call of Duty, Roblox, Minecraft, League of Legends, FIFA, NBA 2K and Grand Theft Auto are played by 5 to 50 million gamers every day in the U.S. for an average of two hours per day.
For sure, video gaming has become the video entertainment of choice for enormous swaths of U.S. consumers, particularly those under 45.
With that in mind, I’ve been wondering how video gaming today measures up to TV viewing, so I decided to do some digging. I analyzed viewing data from several million connected TVs in the U.S. from Nielsen’s Gracenote panel that was modeled and balanced to U.S. Census data and Nielsen’s All-Minute Respondent Level Data, and matched to gaming data in a privacy-safe clean room.
I focused on a single, mid-tier multiplayer “battle royale” game, Smite (published by Hi-Rez, a Tencent studio) and ran the numbers to see how it would match up in audience size and composition to TV networks as well as ad-supported streaming services.
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For comparison purposes, Smite is probably the 18th largest game in the battle royale category in the U.S., much smaller than games like Fortnite and Apex Legends. Here’s what I learned:
Smite would be a big TV network. Measuring Smite on a persons 2 and older basis, its weekly U.S. gaming audience would rank as number 45 out of 185 measured national broadcast and cable networks, one slot behind VH1. Measuring it on an adult 18-49 basis, Smite would be number 21, just ahead of A&E. And, incredibly, measuring Smite on a male 18-34 basis (85% of Smites’ gamers are men 18-34), it would rank as the 11th largest TV network in the U.S., just behind USA Network and ahead of TBS.
It’s big compared to ad-supported streamers. This stat relative to streaming viewing really jumps out: Smite’s weekly gaming audience is 2.7 times bigger than all people who have watched any episode of “The Handmaid's Tale” on Hulu this entire year.
Gamers don’t watch much TV, linear or streaming. A full one-third of Smite’s gaming audience have watched zero linear TV or streaming video on TV yet this year, and those watching any linear and streaming are mostly in the lowest quintile in total viewing for those channels.
And, guess what? Smite carries CTV ads. In case you were wondering if this was entirely an academic exercise exploring the potential advertising reach a video game could deliver if it carried TV-like ads, it’s not. I chose Smite for a reason. It is a pioneer among premium console and PC games and implemented gamer-friendly, opt-in, skippable and rewarded full-screen CTV ads into its game earlier this year. It is already delivering millions of ads a week with tight frequency controls and hourly ad loads in the two to three minute per hour range, similar to what HBO Max’s ad-supported service is launching with.
CTV ads on PC and console-driven video games will be massive. Smite is only the 18th biggest game in its category, yet it delivers more men between the ages of 18 and 34 every week than all but 10 TV networks today.
More top video games are beginning to test similar opt-in and rewarded ad formats, including games like EA’s NHL 21, and many of the games that will be coming online over the next year will be much larger than Smite. It doesn’t take much imagination to realize that a dozen or more of those games will very soon surpass both linear and ad-supported streaming services in the ability to deliver younger audiences, particularly younger men.
What do you think? Are video games ready to step onto the TV & CTV advertising mainstage?
Dave, very few marketers are targeting only young males--so for them, fine, why not videogames providing they have no issues about content and the commercials have been demonstrated to capture audiences---attentive audiences---to a similar extent that prevails with TV? Go for it. I doubt that audience size is the issue but rather the highly competitive context that videogames engender. That could be a major plus for certain types of advertisers. But as regards videogames in general being an alternative for TV on a major scale---for many kinds of advertisers with varied brand positionning strategies---I doubt it for now.
Very good points Ed. Yes, not all advertiserws want young males, but then many video games capture more women than men. You have hit the key issue, which is integretaing ad formats where the gamers' attention in on the ad and its not just background media as some of the billboard ads in games are today. That is why I am bullish on opt-in, skippable, rewarded ads with full-screen 15 and 30 second video formats. In tests fo far, they are running 99+% completion rates.
Dave, the stats regarding time spent with videogames show that it's an overwhelmingly boys and young mens' medium-----not that some games don't depart from the norm where audience profiles are concerned. On the gaming point, I firmly believe that videogamers are generally very competitative and intense participants---and the latter is the key word. Just as TV game show fans---the hard core, not everybody---and those who visit gaming sites have the same intense outlook. I saw data some years agom from Dynamic Logic that documented the difference that this makes for advertisers----the average ad recall lift for ads on gaming websites was way above the norm.
Great point Ed on how the gamer engagement can translate into a stronger ad impact. On the young male skew of the example here, please note that I only analyzed one game - Smite - and it is dominated by males 18-34. However, as we see many more games follow Smite's lead here, we are going to see many with different core audiences ... games are not unlike TV networks that way. Each tends to have different appeals to different gamers.
"Are video games ready to step onto the TV & CTV advertising mainstage?"
I like your approach and thought process going into this piece, but ad messages have been served into video games for over a decade. While I have a traditional media background, I have been in the video game industry for close to 15 years and the resistance to facts and acceptance of engagement opportunitities in the space has been very disappointing.
The industry doesn't do itself any favors because most gaming studies like to provide big numbers - and as the previously commenter believes - the industry is overwhelmingly "boys" and it's not. More hardcore games like Call of Duty or EA Madden may be dominated by men, but for games like Smite and Fortnite, there is a substantial female audience.
In closing, while I do like the approach here, TV is a very passive form of entertainment while video gaming is a very engaged form of entertainment and publishers need to be very careful about where/how they insert ad messages. Many of these publishers make hundreds of millions, if not billions, on micro-transactions in the game and behind closed doors, many will admit that they see no benefit of going through the hassle and cost of implementing ads that will only offer fractional gains in revenue.
Thanks, Dan. As the "previous commentator"---that's me folks----I should point out that I didn't say that videogames are overwhelmingly for "boys". I said that they are overwhelmingly for "boys and young men". And I also agreed with Dave that there are, no doubt, exceptions---individual videogames that appeal mostly to females. But in general, I seriously doubt that in total time spent studies that you will find a 50/50 break between the sexes in videogame usage. More likely 65/35 favoring males---but that's only an estimate. Perhaps you can provide a study for all of us to ponder on this subject?
As I mentioned, the gaming industry does not do itself any favors due to the kinds of studies it provides...and traditional media agencies are lax in asking questions and diving deeper into the space. I do think the research is getting better, but it's not being presented in a more useful manner for agencies and brands to take more advantage of the space.
Also, just like there is not one demo that represents the TV viewing audience, there is not one demo that represents the video game market. Just like TV, there are several formats and nuances to video games ...long-form vs. short-form, epic vs. serial, and a ratings system that works very similar to movie ratings for the level of maturity. The gaming industry and agencies tend to paint the opportunity with a wide swath which does everyone a disservice. This is why I take issue when you state that the industry appeals to mainly young men and boys...but again, the industry does a terrible job in how it approaches and presents research.
Finally, on one hand I appreciate the increased attention esports and video games are getting as of late, but on the other hand, admittedly find it incredibly frustrating when article like this come out like the author has stumbled onto something new when many of these engagements have been available at scale for well over a decade.
Dan, I did not say that the videogame "industry" appeals mainly to boys and young men, I said that a properly conducted study which measured time spent with videogames in their totality would find that the male side is the dominant one. That does not mean that every videogame is only for boys or young men. As for "linear TV" the same point applies. In terms of time spent, people aged 55+ outview 18-34s by a huge margin. Sometimes as much as five- or six-to -1. In some studies the margin is even greater. That does not mean that every TV show and every TV channel caters only to older adults, nor does it mean that any advertiser who is targeting only those under the age of 50---and even younger---should avoid TV. There are plenty of ways to zoom in to a fair degree on younger adults via TV---but not nearly as many as those that go in the opposite direction. You may have noted my comment about the videogame user being an active participant, not just a spectator as with most TV content. That's a very strong selling point for advertisers in my opinion---even if you are targeting mainly females ---or both sexes equally---assuming that you can find the right games to utilize.
Dan, I totally agree with your points about the need to find ad formats that take advantage of the super high engagement of gamers with games. I do think that moving from passive biolard and banner ads to full-screen, full involvement ads will be part of the solutoin. Of course, they need to be entirely opt-in, skippable and rewarded. Watch to earn advertising could be a big part of the solution.
Dave - part of the issue is economics - many of these games incorporate a free to play model with micro-transactions to pay for upgrades.
Using Fortnite as an example here - at its peak in 2019, the publisher was raking in close to $1 billion per month in micro-transactions. It would require a great amount of effort and resources to hire an ad sales force, incorporate ad technology, and find the right model of messaging that isn't going to piss off a highly engaged audience that just wants to play...and arguably for minimal gains in revenue.
I do see an opportunity for a sponsor to come in and say "hey watch this or scan this and we'll pick up X transaction in your video game," but as you've already surmised, running traditional display and/or videos ain't gonna cut it.
Finally, at least right now, most agencies and brands don't want to use resources to figure it out either. It's a massive marketing opportunity, but arguably, there are not as many progressive agencies and brands that would take the initiative to figure this out - most will likely wait for the publishers - and they'll be waiting a long time.
Dan, you've nailed the key issues. Making this happen rquires one or more third parties that can "platform-ize" gamer-friendly, high engagement ad formats that can conform and integrate with premium video ad demand scalably and efficiently. I do believe that the time is right for this to happen - the shift to free-to-play games creates incentives for publishers to find complimentary revenue models to the live services econoimies they are buidling. The audiences looses in linear TV and shortage of ad-suported streaming ad inventory creates incentives for advertisers and marketers to experiment if they can do it with formats that comply with TV and CTV measurement metrics.
And, most importantly, everything has to revolve around the gamer first. Fortunately, gamers like getting free stuff, so finding rewarded formats that deliver not only game currencies by product incentives as well are probably key parts of the solution. Given the scale of the industry, those who can solve these issues well, soon, could find a lot of scale very fast.