Advergames, content role juice up marketer's game

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Fire up Electronic Arts' "Arena Football" video game that launches this week and you'll see Champs Sports at every touchdown, punt and pass. The retailer's logo is everywhere, from the virtual athletes' helmets to the end zone, pumping its "Where sport lives" tagline.

The integration also extends into the real world, with promotions for the video game in Champs' 600 stores, where employees will be given copies of EA Sports games as sales incentives, in-store monitors will show EA game highlights, and kiosks will allow shoppers to play "Arena Football" and win Champs merchandise. The two companies will aggressively co-market throughout their media mix.

To reach the elusive 13-to-34-year-old male demographic, marketers are making deeper integration deals with video game publishers, becoming pivotal parts of the game play and offering their real-world assets, like media spending and uncluttered real estate, to hype the titles. Microsoft Corp., with its new Xbox 360, is bringing advertisers further into gamers' lives with chances to build low-cost advergames, and offer rewards and downloads to juice up game play.

The $10 billion U.S. video game business continues to grow-it already eclipses the domestic box office-as does the interest from blue-chip marketers across fast-food, automotive, wireless, movies, music and other big-spending categories. Game developers have formed in-house divisions specifically to deal with the business, as Nielsen Entertainment projects that ad spending will jump from $75 million in 2005 to upwards of $800 million by the end of the decade.

"Advertisers looked at the last few years as a trial," says Julie Shumaker, Electronic Arts' national director-sales. "Now, they're putting real dollars behind it."

Though she wouldn't give specific figures, Ms. Shumaker says her ad sales have been increasing 50% each year since 2001. She expects to see comparable or larger increases this year.

Advertisers have seen that young males, specifically 18-to-24-year-olds, are increasingly turning their backs on TV and multiplexes in favor of video games and the Internet. Making the area even more attractive, a recent study from Nielsen and game publisher Activision shows that gamers not only accept brands embedded into games but can be persuaded to buy the products if the integration is relevant and authentic.

Advertising in videogames has been attractive for years to a core group of marketers like McDonald's Corp., PepsiCo, General Motors Corp., Samsung, Procter & Gamble Co. and Nike. With the launch of Xbox 360 and the upcoming release of Sony PlayStation 3, the medium is likely to draw in more advertisers because those systems link up easily to the Internet. Currently, about 10% of gamers play online, but that is expected to jump to at least 50% this year.

Paramount Pictures quickly became the first film studio to tap into Xbox 360's capabilities, premiering a high-definition trailer for this summer's "Mission: Impossible III." Microsoft executives, who say Xbox 360 is on its way to selling 3 million units worldwide, are in talks with numerous marketers that want to explore advergames, dynamic product placement, downloads, sponsored tournaments and other ad-friendly features of the new console. Some of those opportunities existed only on PCs before.

"Because it's a living machine, advertisers have more flexibility and options," says Chris DiCesare, director-product marketing at Microsoft Game Studios. "We're seeing marketers that want to develop content and programs specifically for this platform."

Executives at Activision, which has worked with Kraft Foods, AT&T, Burger King Corp., Motorola and Hewlett-Packard Co., say marketers are becoming partial to franchise properties that have new titles coming out year after year. They want to sew up category exclusivity, making long-term deals with the publisher. Those alliances mean the two partners have a close ongoing relationship, allowing the game publisher to better understand the brand and how to incorporate it into game development.

"When you nurture the relationships, the partners will take you everywhere they go," says Paula Cuneo, senior manager of in-game licensing at Activision. "That's a huge advantage and a significant addition to our own marketing for a title."

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