Why you need to know him: New York-based Massive integrates advertisements into video games -- a venture that could enable marketers to put their brands in front of consumers who have turned games into a $10 billion-a-year business.
|Mitch Davis' Massive is doing for games what the original ad-serving networks did for Web pages.
Credentials: Mr. Davis formerly was senior vice president at Britannica.com, where he managed the Britannica.com business, which included marketing, business development, editorial, ad sales and technology. He also ran the CD-Rom business and international offices. Before that, he co-founded Parcelhouse, an international software company that now operates in 14 countries, and Digital Rights, an Internet business that built and managed a range of destination sites and was sold to Liberty One, which acquired the rights to Excite Australasia.
What titles are currently employing the Massive Network in the games? “We’re currently serving advertising into five video-game titles: "Splinter Cell: Chaos Theory," "Anarchy Online," "SWAT 4," "Ski Resort Extreme" and "Mall Tycoon 2." We have commitments from our 12 publishing partners to have over 40 titles in the network by the end of 2005.”
In what form are the ads integrated into the games? “Advertising is seamlessly integrated into games [and] takes many forms: billboards, posters, branded messages on delivery trucks and computer and TV screens. We’re constantly innovating and will offer full motion video, sound, object replacement and other possibilities in the near future. The key thing that’s important to note is what we’ve spent the most time on: making sure that the advertising doesn’t interfere with game play in any way. That means that our technology doesn’t slow down game play at all. It also means that the advertising placement is relevant and contextual. That’s why we work so closely with the video-game developers on that piece of the puzzle -- it’s the developers, not Massive -- who choose where the advertising should go in any game in the network.”
How does the technology work? “During development, the Massive Ad Client software library is integrated into the video-game engine. Development teams mark all suitable locations in the game for future advertising. When the game is loaded into a connected PC or console, the AdClient communicates with Massive’s AdServer, allowing the advertisements to be downloaded into the game dynamically. The technology works across all platforms. Using texture replacement, the game engine blends the advertising into 2D or 3D game environments as part of the normal rendering and display process. This seamless delivery has minimal memory impact, so the game play is not affected. Those gamers that are playing with an unconnected machine see no difference in game play other than their game will show default ads or textures.”
What ad categories are proving most popular? Who's advertising the most? “We’re working with 30-plus blue-chip advertisers across all categories: entertainment [including film, music and cable networks], packaged goods, beverage, auto, quick service restaurants, financial services, technology and telecom. Some of our current advertisers include Coca-Cola, Paramount Pictures, Universal Music Group, Nestle, Dunkin’ Donuts and Verizon Online.”
What’s the appeal of in-game advertising? “We’re executing campaign-based ad buys and, with our technology, can serve ads that target gamers based on time of day, geography, etc. Prior to the Massive Network, advertisements were hard-coded into the game during the game’s development, 12 months before the ship date, and they never changed. It’s this window of time, and the fact that there is no measurement against these static ads, that limited [video games'] appeal amongst advertisers. With the Massive Network, there’s no need for expensive development time invested in creating static art. The ads are dynamically served into the pre-selected locations, so you could be playing a game on Wednesday and see a cell phone ad and on Friday it could be for an ad for a box-office event.”
What kind of audience are you reaching? “As a video-game network, Massive reaches the core gamer population, which is over 70% of the male audience, aged 18-34. Advertisers are reaching the trendsetters, the early adopters who are key influencers in their community. Gaming is a community based pastime, unlike TV, and word of mouth among gamers is one of the most powerful drivers.”
You've said that in-game advertising could be a billion-dollar ad-spending market in the next several years. How on pace is that figure so far? “It’s too early to say. I think two key things prove that this is going to be a major media: One, the response we’re getting from both the blue-chip advertiser community and the global video-game publishers. Folks like Coca-Cola don’t play around with their brands and their advertising dollars. And two, financial analysts from Harris Nesbitt, Goldman Sachs, Morgan Stanley, RBC Capital, CSFB, and others are all pointing to contextual in-game advertising as one of the key opportunities for video-game publishers to drive additional revenue for their companies.”
Your service can alter ads on the fly in response to gamers' reactions. How do you track reactions? “First, it’s critical to know that we don’t track individual gamers at all. What we monitor is the aggregate behavior of gamers who are playing at any given time. This information is really unparalleled in terms of what it can deliver to both our publishing partners and our advertising customers. Video-game publishers and developers can now see exactly where in a particular game players are spending the most time, or the least. As video-game development and marketing becomes more and more expensive, this insight into exactly how gamers move through levels is phenomenal information for them to feed back into their development cycle. We also conduct extensive play testing with individual gamers so we can work with an advertiser to see if a particular creative execution is working or not or what brand lift advertisers are getting. We can also monitor the effectiveness of a creative campaign by measuring the length of time gamers were exposed to it. In a video game, the gamer can stop and look at an ad. We can test multiple executions, and determine which has the greatest stopping power.”
What kind of feedback are you getting? “The feedback from gamers has been overwhelmingly positive. They say that it adds more realism to the game and has enhanced their game experience. In fact, there’s a funny anecdote: Anarchy Online took their advertising-supported model off the network for some routine testing in the first two weeks of deployment. They were flooded with complaints [like] “Where is the advertising?” That’s extraordinary! Would you ever expect that a TV viewer would call to complain if they didn’t see a 30-second commercial during Desperate Housewives?”
What types of ads work best? “This demographic is very savvy about media overall. When you’re talking about advertising in the context of a $50 game that gamers may play two to three hours a night, you need to be smart about how you execute. In general, ads that are clever, funny or irreverent work well.”
Which ones don't? “At this point, it’s too early to say that any of the advertising we’ve run hasn’t worked well. We’ve worked very deliberately with our publishing partners and our advertisers to make sure that all of our ads make sense in the context of the game. We’re at the cusp of a major shift in advertising and video games. Everyone wants to do it right.”
What types of games are proving more attractive to advertisers? “Any game that takes place in an urban or contemporary environment is a great fit for advertising. Sports titles, first person shooters, strategy games are a great match. Games that are set in the '70s or '80s or even in the future make sense, too. If you remember some of the great stuff that the movie Minority Report did with funny, clever advertising even though the movie was set in the future -- that’s a great idea for many game titles. On the other hand, advertising in a medieval game setting makes no sense at all.”
Are you a gamer? What games do you play? “Absolutely, though game time is pretty restricted these days! I like "Splinter Cell," "Grand Theft Auto" and racing games like "Burnout." I love the PSP, too. What a fantastic device, with the ability to watch movies, listen to music and browse the Net.”