• by Tom Hespos , March 12, 2002

Remember what the advertising marketplace looked like a few years back? The dot-com explosion fueled huge demand for ad space and demand skyrocketed. Quite a few latecomers to the game found it difficult to secure space at all and had to move to alternative media. That’s when all sorts of kooky ideas for reaching people with commercial messages began to make sense: Graffiti on sidewalks, screens at supermarket checkout counters, shrink-wrapped cars. For me, I knew things were out of control when I took a bathroom break at my favorite bar and found ad posters right above the urinals.

While many of these alternative media couldn’t sustain their success in the subsequent economic slowdown, the experimentation with alternative media during the dot-com explosion reinforced a fundamental tenet of advertising that we should always keep in mind: Ad dollars follow eyeballs.

Why then are we slow to capitalize on ad opportunities within a medium that reaches more than half of all Americans? I’m talking about video games.

Video games have come a long way since the days of Atari 2600 Pac Man, a game that helped usher in the home video gaming industry. (When I got Pac Man for my birthday as a kid, I didn’t leave my house for a week.) These days, both console-based (e.g. Playstation 2, Xbox, etc.) and PC-based games offer realistic and immersive 3D environments that are perfect for virtual sponsorship. Given the time that people tend to spend with these games, I think gaming environments are ripe for ad opportunities. One popular game played online by thousands of people is EverQuest, a game that has earned the nickname “EverCrack” for its addictiveness. EverQuest charges a monthly fee to users for playing the game online, much like an ISP. EverQuest players create characters that interact with each other in an online fantasy world reminiscent of Tolkien’s Middle Earth. Some EverQuest players take this game so seriously that they are willing to pay real American currency for virtual pieces of platinum that they can use within the game. (Search eBay with keyword “EverQuest” and you will find people selling EverQuest game currency to other gamers. Ten thousand pieces of platinum will run about $75 U.S. If you purchase game currency, the seller has to meet your character within the game’s environment at a predetermined place and time to complete the transaction.)

As a gamer who spent over 100 hours to finish Diablo II – another popular PC game title - I’ve got to wonder why advertisers wouldn’t want to reach consumers through a medium that holds consumers’ attention for so long. Consumers spend around 30 hours with the typical console game. A typical console game has a distribution of 250,000 to 300,000 copies, with the most popular titles selling anywhere between 1.5 million to 6 million units.

There are quite a few ways to execute advertising and sponsorships within video games to tap into this dedicated audience.

First, there’s virtual product placement. An advertiser can pay a game developer to place the advertiser’s product within the gaming environment, such that characters within the game can interact with the virtual product. For instance, if Coca-Cola wanted to get in front of people who play Unreal Tournament, they might pay the game developer to make all the health power-ups in the game look like cans of Coke. In such a scenario, players who have taken a beating from other players’ assaults can pick up a can of Coke to heal their characters. The soft drink would literally save their life within the game, which can’t be bad for reinforcing a positive brand image.

Then there’s virtual signage and other virtual ads. During the dot-com boom, I made the acquaintance of the gentlemen at Online Athletes, a company that ran servers that hosted games of Quake III for gamers all over the world. The company was able to customize the games played on their servers by inserting virtual billboards into the game environment. As game characters ran past buildings, they would be exposed to billboards on the sides of those buildings that appeared to be 100 feet high and 150 feet across. Software kept track of how many times characters ran past the billboards, and thus tracked impressions.

An advertiser might also consider paying a developer to construct a game that can be distributed via the web or any other channels the advertiser might have access to. My agency developed a game called “Pooch Poker” for one of our clients, based on the popular “Dogs Playing Poker” poster. The client’s brand was prominent within the game, and we distributed it via the web, informing consumers by placing a link within an e-mail that went out to our house mailing list. Since the game was constructed in Flash, we were able to track the time that consumers were spending with it. Not only did consumers spend significant time with the game when it first debuted, but there was also plenty of repeat visitation, as well as a few e-mails asking whether the game could be purchased at retail.

One company that can assist interactive planners with executing advertising in video games is InGame Media. InGame can execute on any one of the scenarios I’ve outlined above, as well as license older games for distribution by an advertiser.

“Sure, it’s a neat channel for reaching people,” you’re probably saying, “but how can we measure this stuff?”

Costs for these types of programs are usually based on conservative assumptions about title distribution, time spent, pass-along and other variables, which are based on actual sales data and solid research. In the case that a game is distributed via the web, online measurement metrics can apply as well. Advertisers are getting more exposure than they pay for in the overwhelming majority of cases.

Personally, I think video games are an underutilized channel.