"Right now it's a nascent market-between advergames and in-game static ads-it was an $80 million market in 2004," said Michael Goodman, senior analyst at research and consulting firm Yankee Group. "But by 2009, we anticipate this will be a little bit under a $900 million market."
WildTangent has struck a licensing agreement for 24/7 Real Media's online ad-serving technology and will push ads into and around online games that conform to Internet Advertising Bureau standards. Ads will be served dynamically, meaning they can be added or changed at any time across the lifespan of the game. Massive gaming network and IGN Entertainment also recently announced initiatives designed to integrate ads into video games.
"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, exec VP-sales, marketing and business development, Wild Tangent. The ads, which will be served onto billboards or as signs in the games, are priced on a cost-per-thousand basis ranging from about $16 per CPM to $25 per CPM. WildTangent provides user tracking and behavioral reports to the advertiser.
Marketers Jeep and Oakley were the first advertisers to sign up and will sponsor billboards on the course in WildTangent's 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 HP computers or a broadband service provider like Verizon or Comcast. Users can play for free for a set period of time and then must buy the game.
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 these boxed games and loads it into his PC. These ads, too, can be switched or altered on the fly when the user goes online. Ads are served across the 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 play.
In the 2003-2004 season, video games were directly responsible for a 7% decline in TV ratings among 18-to-34-year-old males, Yankee's Mr. Goodman said. "If your eyeballs are going to video games, as an advertiser, you need to be there," he added.
At least three others are testing similar waters, said Mr. Goodman. 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.
It's no accident gamers are chasing advertisers. The cost to develop games-which can be as high as $15 million a game-is expected to rise by 25% to 50% and advertising is an added revenue stream.