HOT SHOT MARKETING

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Nick Kang is the ultimate action hero. Taking on the Russian and Chinese crime syndicates in the City of Angels, Kang drives, fights and shoots his way across 240 miles of Los Angeles area real estate. Crime in progress? Kang is on the way. It's a Puma truck heist at the 3rd Street Promenade flagship store in Santa Monica. Nick Kang kicks butt and heads back to the streets for more adventure.

Kang is the virtual hero of "True Crime: Streets of L.A.," a videogame from Activision. And Puma is one of Activision's marketing partners. Kang wears Puma clothing and occasionally drives past Puma billboards or benches in the virtually real L.A.

Players could watch videogame trailers on the Puma Web site and even buy Kang`s clothing or footwear on a co-branded site when the game was released in November. Promotional winners could pick up Puma merchandise, and pre-release copies of "True Crime" were available at Puma stores.

"Companies are starting to understand the power of this medium," says Dave Anderson, Activision senior director-business development. "They're realizing videogames are not only mass-market entertainment that reaches an elusive male demographic, but can be done in an integrated ... way without bludgeoning the consumer with message."

Forward-thinking marketers playing in this field include Levi Strauss & Co., Nike, Coca-Cola Co., BMW of North America, Nokia, Callaway Golf Co., Kraft Foods, DaimlerChrysler's Jeep and Sony Ericsson.

While it's true that product placements have been included in several generations of videogames, new advances in graphics and online connectivity, as well as the ongoing desire to reach ever more elusive consumers, are pushing game advertising even further.

linking thousands

Interactive gaming has become its own ad-supported mass medium. Interactivity ranges from a gamer being able to compete against the game itself, to several players competing against one another, to the new world of games that are inspired by the MMO initials-for massively multiplayer online-which have the potential to link thousands of players on the same game.

While any true mass medium must appeal to both genders, videogames have been traditionally associated with young men. The Electronic Software Association, however, says women account for 39% of computer and videogamers. Industry insiders maintain that many women have already immersed themselves into online gaming. "It's not just the boys' territory anymore," says Geri Gordon Miller, festival director of New Orleans Media Entertainment, an annual convergence conference for the advertising, gaming, film and music industries.

"Videogames are starting to steal time and attention from other media. Advertisers want to be where the viewers are," says Michael Goodman, Yankee Group senior analyst.

Tim Harris, VP-partner at SMG Play, the year-old game-focused unit created by Publicis Groupe's Starcom MediaVest Group, adds: "At every single client we go to and say, `You should be in this space, ' there are always lots of nodding heads. We're just on the cusp of people ready to throw down real dollars for it."

As in any mass ad medium, the ability to measure popularity will be crucial to interactive games (see story on Page S-6), though Julie Shumaker, director-ad sales at Electronic Arts, points out that videogames represent a technology leap and the metric will eventually be there. What's more important is finding marketing partners that want to be involved in games and get the right fit, she says.

Think outside the product-placement box. Beyond such tactics as simple contextual product placement, advertisers can build an entire level for a player to pass or create a whole game around one product.

"Signage and product placement are certainly valuable executions of advertising, but that's not the whole story," Mr. Harris says. "The silver bullet is really doing custom solutions for clients."

One way to take the well-traversed idea of product placement further is through dynamic brand placement. Similar to product placement, but with connectivity to the Internet, this emerging technique can be used to update, change and add messages with any frequency desired.

Connecting to the outside, "real" world is another popular developing idea. On There.com, gamers can try on Levi's jeans or Nike shoes; on Ubisoft's console game "Tom Clancy's Splinter Cell," players can use a Sony Ericsson phone or camera. But the use is limited to the confines of the game or online environment. Breaking through to the sale or offline use is still limited.

One tactic is to reward players with product or points. General Motors Corp.'s Cadillac ran a game that rewarded the winner with an Escalade SUV. But as gaming expert Marco Brambilla says, that concept is more of a lottery approach.

It should really be "more about creating an award that everyone can attain," says Mr. Brambilla, creative director of Medium, a venture between commercial and music production house HSI Productions and Immaterial focused on innovations in gaming and advertising. For example, a wireless marketer might run a downloadable game contest on its phones where the top 10 scorers for the month win free phone minutes.

"When this thing matures, there will be the opportunity to launch products in videogames," says Craig Rechenmacher, director-global brand management at THQ. "I don't know if it'll be songs or music videos or clothing lines, but it will happen."

As the videogame medium evolves, both software publishers and marketers will have to be wary of the fine line between advertising that makes sense and advertising that alienates gamers.

can't annoy customers

"We're never going to overblow the advertising opportunity, because the last thing we want to do is annoy our consumers," says Carolyn Feinstein, VP-marketing and communications at EA. "Our philosophy is very much about the integrity of the gaming experience. If we stick to that, we're not going to oversaturate."

Mr. Brambilla has put the priority on game before advertising by coining the term "game-vertising." Unlike the commonly used "advergaming," game-vertising denotes that the entertainment experience comes first. Mr. Brambilla believes the next step in advertising and gaming will focus on original games tied closely to specific consumer brands. His company is currently working with a wireless carrier, a sports company and a retailer on doing just that.

"What if you could download a videogame and play in a universe that's very much about the attitude and style of the brand?" he says. "It's very much akin to what BMW did online with BMW Films-branded entertainment as part of the experience."

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