• by Erik Sass  @eriksass1, July 23, 2008

SAN FRANCISCO -- Advertisers are notoriously cautious about the contexts in which their brands appear, but this runs counter to the logic of in-game advertising, including product placement, according to panelists speaking at the OMMA Gaming conference on Tuesday afternoon. That's because games, being interactive, are fundamentally different from other media where advertisers might do product placement.

Given their obsessive attention to game dynamics, gamers are sure to notice any tweaking of game play to protect a branded item from negative associations, according to David Edery, the worldwide games portfolio planner for Xbox Live Arcade at Microsoft. For example, an automaker might be concerned about players crashing a virtual version of its car in Grand Theft Auto, but Edery warned it would be counter-productive to modify the game in any way.

"The nice thing about product placement in a game is that you don't think of it as advertising, because you're just doing what's natural in the game," Edery said. However, "when people recognize that they're being advertised to, a little subconscious wall goes up." Thus, by calling the player's attention to the fact that it is an advertisement, the advertisers will defeat themselves, and their brand may even suffer negative associations.

Panelists agreed on the value of virtual realism for a number of reasons, even if it sometimes seems counterintuitive. For example, advertisers typically want exclusive product placement and display advertising, but this kind of exclusivity can actually damage the brand and even the game itself.

Moderator Dean Takahashi, digital media lead writer for VentureBeat, observed that allowing a single advertiser to dominate all the billboards and retail locations in a virtual cityscape, for example, damages the believability of the game and therefore the ad itself, lessening the ability of players to suspend their disbelief while making the ad fatally conspicuous. Instead, Edery said, "you want to be one of 15 advertisers, so it looks like a real city."