Demand for in-game advertising is growing.
The global in-game ad market was valued at $6.8 billion million in 2021 and is forecast to hit $17.6 billion by 2030, with a CAGR of 11%. That’s according to a new report published by Allied Market Research.
The use of smartphones and other portable devices, coupled with the legions of internet fans, are driving the market. So did the pandemic. More people stayed home, which opened new opportunities for the industry.
However, the one caveat for advertisers is frequency. Too many ads annoy users, which could cause them to quit the game.
“Until the ads are seamless and accepted by gamers, we won’t see advertisers jumping fully into it,” Ashley Bolt, managing partner of gaming at Havas Entertainment, told The Drum. “There are places where ads are appropriate, like a sports game or a racing game where it is realistic and can enhance the game, but a poster ad for a fast-food restaurant in Elden Ring probably isn’t going to work.”
The in-game ad market is divided into three types: static ads, dynamic ads and advergaming. Allied Market Research. Well-known gaming companies include Alphabet Inc., Anzu Virtual Reality Ltd., Blizzard Entertainment Inc., Electronic Arts Inc. and Playwire.
Bidstack, which enables in-game ads and videogame monetization, finds sports titles especially fertile ground.
The company believes it could create a network in which brands select their desired audience via the game. For example, the demographics for games, such as Football Manager, are known: primarily 18-36-year-old men. Knowing the players makes ad targeting easier, gives advertisers the ability to measure campaign success in real time and maintains brand safety.
"Until the ads are seamless and accepted by gamers,"
Yeah, spoiler alert - that's never happening.
Fans who drop $90 on a sports or racing game aren't going to put up with ads anymore than someone playing Elder Ring.
A video game release can generate billions of dollars in a weekend release. Epic/Fortnite was generating $1 billion a month for in-game purchases by a rabid fanbase. You need to take a hard look at the publishers offering in-game ads, how they affect the gameplay, how they affect the psyche of the player, and also ask why a publisher would risk alienating its loyal audience to make a few million dollars which winds up being an accounting error based on total revenue generated.
There's a right way to do advertising and wrong way to do advertising and trying to force a TV model into gaming isn't going to benefit the gamer or the advertiser.