IN-GAME ADVERTISING

In-Game Advertising

Introduction

Purpose

A study commissioned by NeoEdge Networks, a Mountain View, CA-based casual gaming advertising network, says (surprise, surprise) that video advertising within online games is more effective than TV advertising. Preliminary results of the study, which will conclude at the end of this month, seem to indicate online gaming audiences are more inclined to remember and positively percieve brands who experiment with pre, mid and post-roll video advertisements inside Web-based games.

Of course, studies ordered by commercial companies with a clear stake in the subject of the research like this one always need to be taken with a grain of salt, but the results are interesting nonetheless, and deserve a closer look. After all, major companies like Google and Sony are eyeing in-game advertising revenues in a big way, and for good reason: depending on which research organization you trust, spending on in-game advertising is supposed to grow to between $732 million and $1.8 billion by 2010, although I personally believe the current economic climate might prevent spending to reach even the more conservative prediction by the end of next year.

Scope

For more context: some say in-game advertising will ruin the video game industry altogether, others believe standards will spur industry growth, and a recent article on our sister site Crunchgear (based on another study) suggested gamers don't have a problem with in-game advertising at all.

Anyway, going back to NeoEdge's study, which was conducted in conjunction with research agency Frank Magid Associates, this is how they came to their conclusions:

The research goal was to determine both the value of online video advertising inside of casual games and the most efficient use of video advertising in casual games. In partnership with advertiser Zappos.com, casual game players across the NeoEdge Network were intercepted with a survey request after game play. Consumers saw one of ten different online video advertising scenarios, which varied number of ads seen, frequency of ads and additional ad products. Over 2,000 consumers participated in the research study and over 1 million ad impressions were used to conduct the comprehensive research.

According to Vicki Cohen, Executive Vice-President at Frank Magid Associates, the preliminary results show a 5x increase in unaided brand awareness over TV advertising where a game included a Zappos.com ad. Other key findings according to the release: over 80% correctly linked Zappos.com as the advertiser who “allowed them to play the game for free” (who knew gamers were such a grateful lot?), while 56% had a more favorable impression of Zappos.com because of their trade-off of watching an ad for free game play.

I am skeptical that the reported uplift in percentages and absolute numbers can be generalized across all in-game advertising and more extensive research would be welcome for backing up the statement, although I am inclined to believe the notion that in-game advertising is generally more effective than TV advertising.

Assumption

The expansion of the video and computer game industry has made advertisers aware of the potential of video and computer games as an advertising vehicle (Kelly ...