The Entertainment Software Association

In-Game Advertising

As the computer and video game playing population expands and diversifies, in-game advertisements and advergames are expanding as well. In 2006, according to the most recent statistics from Nielsen Media Research, $75 million was spent on this new way to reach potential customers. Nielsen estimates this figure will increase 14-fold by 2010 to $1 billion.

Static Advertising

The first examples of in-game advertising were static, or unchanging, consisting of virtual billboards or in-game product placements. These advertisements were placed directly into the game by artists or programmers and could not be altered. The first example came in the 1978 computer game “Adventureland” by Scott Adams, who inserted an advertisement for his then forthcoming game “Pirate Adventure.” The trend continued throughout the 1980s and 1990s when Anheuser-Busch, Inc. and Adidas Ltd., included advertisements in Bally Midway's "Tapper" and Moby Game's "FIFA's International Soccer." In 2002, South Beach Beverage Company (SoBe) paid Ubisoft Entertainment to have the main character in “Tom Clancy's Splinter Cell: Double Agent” reach for a SoBe drink when he got thirsty in the hope that gamers would do the same.

While these types of video game advertisements are static, they provide advertisers and developers with a variety of options not available in a traditional billboard. For example, Ubisoft's “Splinter Cell: Chaos Theory” features a large glowing advertisement for AXE deodorant that acts as an obstacle for the player's character to maneuver around.

Dynamic Advertising

Advances in technology have allowed in-game advertising to become more interesting and entertaining. Many of today's in-game ad campaigns use dynamic advertising which, unlike static advertising, can be altered remotely by the advertising agency. These ads can be tailored to geographical location or time of day, allowing more flexibility for time-critical campaigns, such as a movie or product launches. Because dynamic ads do not have to be hard-coded into the game by programmers, advertisers no longer need to formulate and insert their messages months in advance.

Dynamic advertising also allows ad companies to track and receive information from a player's console about the advertisement. Data -- such as time spent looking at the advertisements, the most viewed advertisements and viewing angles -- can be recorded by the advertiser to determine the most successful ads. This information can then be used to better formulate future campaigns.

Examples of dynamic in-game advertising include the 2005 computer game “SWAT 4” by Irrational Games. The first version of the game featured dynamic in-game advertisements delivered by Massive Incorporated to publicize upcoming television shows.

Advergaming

Advergaming, the practice of using a video game to advertise a product, is a term that applies to various free online games commissioned by major companies. The games usually feature the company's products prominently. According to Jupiter Media Metrix Research, 50 percent of recipients who receive an advergame will play it for an average of 25 minutes.

The automobile industry has built on the successes of yesterday's static advertisements to create big-budget 360-degree ad campaigns for video games. Toyota Corporation released a promotional video game for Xbox 360 to build awareness among 20-somethings about the company's new Yaris. Nissan Motor Company Ltd., eager to build a buzz around the GT-R sports coupe, unveiled the car to the public in downloadable computer games. Finally, Mazda Motor Corporation launched the RX-8 in Sony's “Gran Turismo 3” video game two years before the actual car debuted at the Detroit Auto Show.

Food and beverage companies also use video game advertising to attract customers. In 2006, Burger King produced and sold several games featuring the company mascot, “The King.” The fast-food chain reportedly sold 3.5 million copies of the $3.99 games. Frito-Lay developed several advergames starring the company's mascot, Chester Cheetah, to promote their snacks, available for Super Nintendo Entertainment System, Sega Genesis, and online gamers.

While this market is growing, it still remains small in comparison to other advertising venues. According to Parks Associates, in 2005, Internet gamer households in the U.S. received about 10 cents worth of ad-supported gaming content on a monthly basis, compared to $50 worth of ad-sponsored television content. Today, most in-game ads are aimed at so-called core gamers, males ages 18-34 and support the automotive, food and beverage, apparel and lifestyle industries efforts to reach this key demographic. In response to the growth of gaming overall, experts expect to see further expansion of these efforts in the coming years.

Go Figure

1 billion — Expected market, in dollars, for in-game advertising by 2010, according to Nielsen Media Research.
1983 — The year Anheuser-Busch, Inc. first included advertising in Bally Midway's game “Tapper.”
30 billion — The amount of hours American men between 18 and 34 years of age, a key demographic for marketers, spent last year playing computer games.
42 — The percentage of gamers between the ages of 6 and 44 who indicate they play online games one or more hours a week, according to the Entertainment Software Association.
$312.2 million — The revenue that the advergame industry is expected to generate by 2009, according to research conducted by a Boston research firm, the Yankee Group.