• by Joe Mandese  @mp_joemandese, April 8, 2004

In a move that could bring video games into the advertising mainstream, Nielsen today will release findings of a preliminary report on video game advertising and will unveil plans for a new service that will measure video game advertising exposure on an ongoing basis. As such, Nielsen once again will be expanding the definition - as well as the marketplace - of so-called "screen-based" advertising. Recently, the company launched services that measure advertising exposure in movie theaters and product placements in TV programming.

The new service, which is being managed by Nielsen Entertainment, also is the most visible sign yet that video games have become a significant enough factor that they merit a place in the media planning mix. On Monday, Knowledge Networks/SRI released new data from its multimedia usage studies showing that console-based video game systems now account for about 15 percent of the time teenage males and 6 percent of the time young adult males spend with media each day.

While those stats might seem surprising to some, they were no shock to agency executives who've been tracking the growing phenomenon.

"We've been tracking and trending it for at least five years and it's becoming quite significant," says Rob Frydlewicz, vice president-research director at Carat Insight.

By utilizing a little known database included in Nielsen Media Research's already existing Total Viewing Sources reports, Frydlewicz says agencies have been monitoring the amount of time TV households spend utilizing their TV sets to play video games connected to a gaming console. Significantly, he said those reports include demographic data derived from Nielsen's people meter sample. The data, he says, helps explain part of the controversy surrounding the erosion of viewing among young men to network TV programming this season.

"During prime-time, 30.3 percent of men 18-34 are watching something on TV, but 2.1 percent of men 18-34 are using video games. That means that something like 7 percent to 8 percent of men 18-34 prime-time usage is going to video games," says Frydlewicz. "For teens, it's about 15 percent during prime-time."

But while video games usage has been surging - especially for key young male demos - Frydlewicz says most media planners have yet to delve into the data and factor it into the planning process, mainly because video games have not been a mainstream media buy up until now. He says planning departments really only became cognizant of the issue this year due to the erosion of TV viewing and the role video games are playing in that.

While Nielsen's conventional TV ratings system does not provide data on advertising exposure within video games (in truth, it doesn't even provide data on advertising exposure within TV programming), the new Nielsen Video Games service is being launched to do just that, creating the data and metrics that will enable vide game marketers to pitch advertisers on the value of "in-game ad exposure." Among other things, the service will provide ad exposure, demographics and even audience recall of ad messages embedded in video games.

Not surprisingly, the launch of the service is being backed by a major video game producer and distributor, Activision, which is eager to cultivate a video game advertising marketplace.

During a press conference scheduled to be held this morning at the ironic location of the Museum of Television and Radio in New York City, the companies will reveal benchmark research showing that advertising in video games already is having a significant impact among hardcore gamers. The survey claims 27 percent of active male gamers noticed ads in the last video game they played. Interestingly, the survey also found that the heaviest users of video games are most enthusiastic about product integration, with 52 percent of heavy gamers saying they like games to contain real products and 70 percent saying that the placement of real products makes the games more "genuine."

More than a third (35%) of male gamers also agree that advertising in video games helps them decide which products to buy, suggesting that not only are ads salient to gamers, but they positively affect gamers' purchase decisions.

Media agency researchers undoubtedly will pore over these findings and the methods used to glean them. The study was based on telephone interviews with nearly 1,000 males between the ages of eight and 34 from a nationally representative sample of Nielsen TV households. The survey results were compared to actually TV usage data inside those households, and the companies said they also hoped to reveal relationships between the two potentially competing media channels. Based on the survey results, that competition may be significant: 29 percent of the respondents said they prefer playing video games to watching TV.

And in what has the earmarks of an entirely new Nielsen ratings competition, the report also breaks out TV viewing "shares" for the leading game consoles: Sony's PS2, Microsoft's Xbox and Nintendo's GameCube. The data shows a clear dominance for Sony, which is not surprising given PS2's greater market penetration, with Xbox a close second in most dayparts except for prime-time, where GameCube is a close rival to PS2.

Perceptions Of In-Game Ads Among Active/Heavy Gamers

                             Active Gamers       Heavy Gamers 
Make Games More Real              55%
70%         
Like Products In Games            43%                 52% 
Impact Purchase Decisions         41%                 46% 
Influence Products To Buy         35%                 40%

Should Not Have To Watch Ads      35%                 32% 
Interact With Ads In Games        17%                 30% 

Source: Nielsen Interactive Entertainment's Video Game Habits report.