|Massive's system is designed to aggregate online gamers into a single audience for advertisers.
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The company said it has so far signed game publishers UbiSoft, Atari, Universal and Konami as partners in its system, which enables marketing messages to be projected into the digital fabric of their online games.
According to the company, the new technology will enable marketers to place and change gamescape marketing messages in real time. For instance, advertisers could schedule ad placements for certain blocks of days or weeks or even "day-parts," when ad are run during certain periods of the day.
10 million gamers online
There are 10 million PC gamers who play online, and another 3 million who are connected to the Internet via their consoles, according to industry estimates. According to Massive, the number of console players connected to the Internet is doubling every 12 months and likely will grow faster when the next generation of Internet-ready gaming hardware is released in 2005 and 2006.
In the 1990s, the rise of the first Internet ad-serving networks, such as RealMedia, was the event that unified the World Wide Web as a coherent advertising venue across which marketers could execute and coordinate broad campaigns on vast numbers of individual Web sites.
On the Internet, ad-serving networks functioned as central databases able to "push" graphic banner ads into pre-set spaces at the top and sides of Web site pages. The Massive's new game ad-serving system is similarly designed as a central database able to push graphic materials at standardized areas of "texture maps," or the grids that make up the three-dimensional landscapes of video games.
"Let's say that in the cityscape of a typical game there is a billboard," a Massive spokeswoman explained. "We can target the texture map that makes up that billboard and then serve any image we want at it. It could show one real billboard ad today and a totally different one tomorrow."
"Another example," she said, "is that there is a Blockbuster store that shows up in the cityscape of a game and its front windows show ads for that week's real video specials. We can then make it change every week to reflect the chain's real specials. It's marketing messaging that is directly part of the graphical interface of the game yet is seamlessly a part of it."
Mitch Davis, CEO of Massive, said, "Statistics show that young guys are not watching Desperate Housewives, they're playing video games. We think this could be a billion-dollar ad-spending market in the next several years."
Mr. Davis was a former senior vice president at Britannica.com, where he headed the ad sales team and managed the consumer Web site and international offices. He was the co-founder of Digital Rights, which was acquired by Liberty One, both dot-com boom companies, and founder of Parcelhouse, a software developer whose clients include FedEx, DHL and Ikea.
Mr. Davis said U.S. marketers spent $12 billion on TV ads in 2003 designed to reach the elusive 18- to 34-year-old demographic at the same time they spent only $10 million for advertising within video games.
The Entertainment Software Association reported that there were 239 million computer and video games sold last year, or nearly two for every U.S. household. Young men spent billions of hours last year playing video games, Nielsen Entertainment reports.
Not very marketer-friendly
Video games have become so wildly popular that the industry overtook the Hollywood box office at $10 billion in sales in 2003, according to the software trade group. But, despite its size, the video-game industry has not been a particularly friendly place for advertisers. Its various platforms function as separate silos that haven't done a good job at quantifying ad impressions even when they have managed to sell inventory to marketers.
"We need to provide a metric that advertisers understood," said Jay Cohen, vice president of publishing at game publisher UbiSoft, which just signed a long-term deal with Massive. "It has to translate into their language. Now that it does, we can move forward."
Much of the ad exposure in console games, by far the most popular, has been confined to product placement, in which a brand is hard-coded into a game. That means a brand is placed in the game and appears there in the same setting every time the game is played.
Targeting dayparts, geography
Massive's technology, because it is included in the game's development phase, allows for tactics such as changing ad campaigns and targeting times of day or parts of the country. Audit reports come back in real time, so marketers can see when and for how long a gamer was exposed to their ad.
By pulling together a number of video-game publishers, Massive can aggregate content from multiple game titles and sell across it, similar to what current Internet ad-serving networks like DoubleClick or Accipiter do with Web sites. By next year, Massive executives say they hope to have the network set up in nearly 30 video-game titles, reaching an estimated 2 million players a week.
In addition to Ubisoft, closely held Massive has already signed deals to embed its ad-inserting and -tracking technology into games from several big publishers including Vivendi Universal's Vivendi Universal Games, Infogrames Entertainment's Atari and Konami. Massive has signed its first advertiser, Real Networks, and Mr. Davis said he has had additional talks with automotive marketers, Hollywood studios and retailers.
"It's a company I'm watching because their technology is wholly different," said Rob Sebastian, a talent agent at Endeavor, Los Angeles, who specializes in the video-game area. "It's still early, but I think advertisers will be willing to pay for this."
Those marketers looking for elusive young men, who seem to be eschewing TV and much of traditional media, should be particularly interested, said Shari Anne Brill, vice president and director of programming at Carat USA.
Keeping pace with technology
"Advertisers have to keep pace with all the venues their target is embracing," Ms. Brill said. "As technology evolves, they have to leave no stone unturned."
Ms. Brill imagines that any "hip and trendy" categories looking for me 18-to-34 are prime for this medium. In a different effort but to a similar end, game giant Activision Inc. and VNU's Nielsen Entertainment announced an alliance earlier this year to create ad-tracking tools. The service, still in development, is intended to track details such as ad recall in real time in console games.