• by Jonathan Blum , January 5, 2006

LAS VEGAS--Advertisers trolling the desert sands here for life beyond linear television, print, and radio may find the future of media in digital games.

Console, PC, and casual video games aren't dogged by complicated distribution issues, rights, a lack of standards, and regulations that impede progress for other consumer technologies. Though there are concerns about measurement, appropriate brand management, and technology, opportunities appear to abound for advertisers in gaming, according to panelists speaking at the Game Power Showcase and Forum at the Consumer Electronics Show.

There is plenty of evidence to support demand for in-game advertising. Jack Dearnbarger, vice president of business development at Blockdot, said there are 120 million gamers over 13 years of age globally, each playing a game for about an hour per day. Gaming also cuts across all demographics and shows solid revenue growth. Spending on video games is expected to hit $875 million by 2010, according to Dearnbarger.

Shawn McMichael, director of advertising sales and marketing for Microsoft Casual Games, noted that gaming has shifted out of the experimental phase as more blue-chip advertisers like Wal-Mart, Target, and Procter & Gamble are spending real dollars in the space.

Monika Madrid, strategic sales and partnerships at Ubisoft Entertainment--who develops titles like "Splinter Cell"--explained that CPMs [cost per thousands] are increasing for in-game ads. In fact, so-called "dynamic" in-game ads, where users interact with a brand or play with a sponsored object like a virtual test car, can command much higher rates than static hard-coded banner ads like street signs or billboards mounted in virtual architecture.

Creative is reaching new heights. Madrid described a product placement for Cingular Wireless in the new "Need for Speed" game. Apparently, gamers receive e-mail pop-up messages as they create automotive mayhem. "The concept is subtle and it adds to game play. It really worked," Madrid added.

But there are challenges, particularly with measurement. Garry Kitchen, president and CEO of Skyworks--an online games publisher specializing in custom games for marketers--said that measuring in-game ad effectiveness is now the ultimate question for marketers and agencies. "You can't point to cases of beer moving from an ad in a game," said Kitchen. "There is plenty of work to be done."

Brandon Berger--senior strategist, digital innovation at Ogilvy Interactive--had a softer view of the measurement problem. Berger maintained that the quantification issues were manageable, noting that existing television metrics were far from perfect. "Factor in time-shifting and other new platforms, and in fact, gaming offers some great opportunities for measurement," he added.

But the panelists appeared to agree that the biggest risk for marketers was a lack of monetary commitment to games as an ad medium.