I Want to Buy in-Game Ads. Why Are So Many Parties Involved?

Your Questions Answered: Gaming

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You've got your video-game publishers -- folks like Activision, Electronic Arts and Ubisoft, to name a few -- who create the titles. Then you've got your consoles -- the actual systems on which the games are played, including Xbox, PlayStation and Nintendo (most games also can be played on PCs).

Then you've got in-game ad sellers -- any number of companies who have made a business brokering deals between video-game publishers and advertisers.

Alliances and exclusive partnerships abound among these three relationships, so if you want to advertise on Xbox Live, you have to go through Microsoft-owned Massive. For ads in PC games, there are brokers Double Fusion, Google-owned Adscape and IGA (Massive also works with PC games). Beginning this year, Sony will be opening its PlayStation Network to all comers (with the obvious exception of Microsoft-owned Massive). In addition, Sony has hired an internal in-game-ad executive, Darlene Kindler, to oversee all aspects of its open-ended PlayStation Network.


In-game advertising will experience the highest growth rate among the various categories of game advertising methods forecasted, increasing to more than $800 million in 2012 from $55 million in 2006, according to Parks Associates. Specifically, dynamic in-game advertising in PC, console, mobile, and casual games will grow to 84% of the in-game-advertising market in 2012 from 27% in 2006 .


There are two kinds of in-game ads: static ads, which are built into the game at the development level, and dynamic ads, which can be switched in and out of games via an internet connection. Thanks to the online capabilities of PS3 and Xbox 360, the PC is no longer the only domain for dynamic ads. Marketers can update in-game ads through an online network so that when a new car model comes out, for instance, the older model can be eliminated.


Internet-connected console games have lobbies and chat areas where brands can be integrated seamlessly into the overall experience without detracting from the play. While a brand may not work within the framework of a game such as "Halo 3" or "Call of Duty 4," it could work around Xbox Live or PlayStation Network.


The 10 million subscribers to Blizzard Entertainment's massively multiplayer online game "World of Warcraft" aside, the future of online gaming is free. Disney Online has had success with its free "Pirates of the Caribbean Online" game and hopes to replicate that success with its coming "Faeries" game this fall. Sony is releasing the family-targeted "Free Realms" for PC and PS3 later this year. Electronic Arts is taking its best-selling "Battlefield" franchise online this year for free with "Battlefield: Heroes." All of these offer the ability to generate revenue through microtransactions.


These are add-ons gamers can buy. But marketers also can get involved. Gamers are receptive to ads as long as they do not take away from their game-playing experience. They also like free things. Marketers can step in and sponsor, much the same way they do with TV, exclusive downloadable tracks and vehicles for racing games on Xbox 360 or PS3, for example. In addition, a brand can cover the cost of microtransactions in a game world or even offer branded clothing or items for a particular game.


Data from research company Interpret show that 85% of casual gamers prefer ad-supported free games to paying for downloadable games. Between third-quarter 2007 and fourth-quarter 2007, average time spent per week playing casual games increased 28% to 5.1 hours from 4 hours.


As more people pick up PS3s and Xbox 360s, there will be a huge mainstream market to tap into via online games. Nintendo is even starting to offer online game play on new games, although whether that company will allow outsiders to market brands in its closed system remains to be seen. But for Microsoft and Sony console owners, there are plenty of opportunities to target specific gamers through genres such as sports and action games (the mainstay of males) and casual games (which tend to attract females and older gamers).
Numbers rounded. Source: Forrester Research's
'U.S. Interactive Marketing Forecast, 2007 to 2012,' October 2007

Source: NPD Group's 'Kids and Digital Content' report (2007 edition)


March means one thing to millions of college-basketball fans around the country: the road to the NCAA Final Four. Pontiac and 2K Sports are entering the third year of a partnership that combines 2K Sports' "College Hoops 2K8" with Pontiac's overall sponsorship of the NCAA men's basketball tournament. The two created a contest that allows online gamers the chance to win a trip to the Final Four (April 5-7 in San Antonio) and a 2009 Pontiac Vibe GT.

The third-annual Pontiac Virtual NCAA Final Four tournament is open to Xbox Live gamers who have the new 2K Sports college-hoops game.

"Last year more than 6,500 people registered for the tournament, and over 230,000 online games were played during qualification to get into the tournament," said Mark Goodrich, marketing manager for basketball at 2K Sports.

Matt Story, director at Denuo Play, which works with Pontiac on video-game integration, said the program involves integration of real-world variables in "College Hoops 2K8," such as 2008 team lineups and digitized CBS sportscasters; the virtual tournament, which culminates in a live event with more than 60,000 fans at the Pontiac Garage in San Antonio; and distributed content delivered contextually via relevant channels.

"Touching nearly every media contact point, the [program] uses media/creative executions in broadcast, event, gaming, internet and sports platforms to drive participation in the tournament amongst hard-core gamers and, more importantly, deliver college-basketball entertainment content to the general NCAA men's basketball fan," Mr. Story said in an e-mail interview.

'An institution'
While Pontiac wouldn't release any numbers to show the competition's impact on car sales, Mr. Story did say that each year has seen more positive brand exposure, and he expects this year to be no exception.

"No other marketing program in history has made such a concerted, effective and broad-based effort to leverage a game experience and the content it generates as a brand message," Mr. Story said. "The brand impact and buzz that the Pontiac Virtual NCAA Final Four produces every year has in turn made this program into an institution that players and basketball fans alike will actively seek."

Mr. Goodrich added that 2K Sports, which has the highest-rated and best-selling college-basketball video game on the market, gets a lot of coverage in print and online media, on TV, and live at the final event.

"Microsoft also has helped to promote the tournament on Xbox Live," Mr. Goodrich said. "It all really meshes well together with the cultural phenomenon that the NCAA tournament has become."

This could be 2K Sports' last year with the contest. The company has broken off talks with the Collegiate Licensing Co., which handles the NCAA sports license, and canceled its "College Hoops 2K9" game, which was due out this November. EA Sports, which makes rival "March Madness 08" and the 09 game, is a potential future partner for Pontiac.
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