|Wild Tangent, headquartered in Redmond, Wash., is a major producer of online games.
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The move makes WildTangent the latest entrant into the new market for dynamic in-game ad-serving services. Such ads can be changed at will or according to schedule, much the same as ads served into Web pages. 24/7 Real Media is one of the pioneers of the ad-serving networks that are now the backbone of much of the Internet's commercial messaging activity.
“This makes it easy for a media buyer in New York to pop $60,000 or $100,000 into a game and treat it like standard Internet ad buying,” said Dave Madden, executive vice president of sales, marketing and business development at WildTangent. The ads, which will be served onto billboards or other signage in the games, are priced on a cost-per-thousand-viewer basis ranging from about $16 per CPM to $25 per CPM. WildTangent provides user tracking and behavioral reports to the advertiser.
DaimlerChrysler's Jeep and Oakley, a California-based marketer of sports sunglasses and other sporting accessories, are WildTangent’s first advertisers, buying billboards within "Snowboard Super Jam" game.
WildTangent’s games are offered free on a number of Web sites or as part of the software that comes with Dell or Hewlett-Packard computers or a broadband service provider such as Verizon or Comcast.
|Photo: Hoag Levins|
|Alex St. John, CEO of WildTangent, said the new ad-serving capabilities make it easier to include games in an integrated ad buy.
Massive and IGN Entertainment are two of WildTangent's competitors that have recently announced in-game ad-serving initiatives for video games. Over the last several years, the sales of digital computer games have exploded.
In the 2003-04 season, video games were directly responsible for a 7% decline in TV ratings among 18- to 34-year-old males, said Michael Goodman, senior analyst at research and consulting firm Yankee Group. “If your eyeballs are going to video games, as an advertiser, you need to be there,” he said.
130 million players
Yankee Group estimates there are 130 million U.S. residents playing digital games. Demographically, that audience includes about 80% of all adolescent males, 50% of adolescent females and 70% of males 18 to 34.
Mr. Goodman said $80 million was spent for dynamically inserted or static ads in games in 2004. He said his company estimates that spending for in-game advertising will grow to $900 million by 2009.
Massive this month contracted with 12 major advertisers, including Coca-Cola Co., Paramount Pictures and Verizon, to integrate their brands into games. Massive’s technology downloads the advertising images directly to a PC game after the player purchases one of the boxed games and loads it onto the PC. These ads, too, can be switched or altered on the fly when the user goes online. Ads are served across a network of 10 game publishers, including Atari, Ubisoft, Vivendi Universal Games and Take-Two Interactive Software. Four games, including Ubisoft’s "Splinter Cell Chaos Theory," lead Massive’s initial game content offering.
Do-it-yourself ad serving
Gaming information company IGN Entertainment, whose high-trafficked Web site IGN.com provides reviews and news, also announced an ad-serving offering last week. IGN’s software enables game developers and publishers to execute the ad campaigns themselves.
Along with audience migration, the rapid move to in-game ad insertion systems is being driven by the escalating cost of producing more sophisticated games. Per-game development budgets now go as high as $15 million per game and are expected to rise by 25% to 50% during the production cycle of the next generation of game consoles, which is currently in progress for some games now.