The Interactive Advertising Bureau, in association with the Games Committee, has introduced the first in a series of papers that outlines a detailed overview of the various game platforms, primarily "console" and "personal computer (PC) online." Subsequent reports are expected to address audience demographics, behavior, and best practices.
Video Games have emerged as a main-stream entertainment medium that generates worldwide revenues of about $25 billion in hardware and software sales. Surpassing box office revenues, movie rentals, book and music sales, Video Game revenues reached $12 billion in the US in 2006.
DFC Intelligence estimates that:
The integration of online games across all hardware platforms has resulted in the emergence of advertising as a significant revenue driver for the games industry. Analyst predictions vary, but they all point to big numbers. Parks Associates believes overall game-related ad spending will grow from $370 million in 2006 to more than $2 billion by 2012.
In-game advertising expenditure is widely expected to accelerate the fastest. Parks Associates predicts it will amount to more than $800 million in spending by 2012, a conservative figure compared to Yankee Group's prediction that global in-game advertising spending will reach $971 million by 20113.
Projections for increased revenues could be well justified based on the results from a recently released study conducted by Nielsen Entertainment on behalf of Microsoft-owned in-game advertising specialist Massive Inc.. The research showed that:
This medium represents an opportunity for advertisers, however it is somewhat fragmented and can be difficult to navigate, says the report. Advertising opportunities may vary from platform to platform, and certainly demographics will vary based on platform and game type. A basic understanding of the game platforms and available advertising formats is an important piece of mastering the Interactive landscape.
Generally, advertising opportunities are either in-game or around-game and can be further described as "environment" or "immersive." Around-Game ads are displayed in conjunction with, or alongside a game while in-game ads are elements of the game itself whether by display or interactive in nature.
Typically, web-based games are played within a "traditional" website environment where ad units can be displayed around the game window during game play. On the other hand PC-based downloadable games are typically housed in an HTML environment and are played in full-screen mode.
Advertising can be displayed both before and after gameplay, in the launch and exit windows, with digital video ads running while the game is loading. This format also allows for game patching, digital rights management, and commerce.
Ad Formats For Web and PC Based Games
Custom-made games specifically designed around a product or service (e.g. Burger King - Sneak King)
Advertising elements within a connected game itself, that can be dynamically changed depending on location, day of week and time of day (e.g. vending machine fronts, billboards and posters)
Display or digital video ads shown during natural breaks in gameplay, such as between levels ("inter-level") or between rounds of play.
Includes game sponsorship of display units around the game, and/or custom branding integration into the game
Integrated brand messaging, sponsorship and/or products into a game (e.g. beverages, mobile phones and cars)
Advertiser owns 100% share-of-voice in and around an existing game, such as sponsorship of a tournament, zone (level), or session of gameplay. Advertiser might also sponsor the release of new exclusive content associated with a game.
Advertising elements within a game that may not be changed. These may reside within game play itself or on menus, leader boards, etc. This type of ad format is also referred to as "Hard-Coded" advertising.
Ads shown following completion of the game
Display or digital video advertisements shown before gameplay begins as the game is loading
Source: Interactive Advertising Bureau, October 2007