Gaming boomed amid the pandemic, giving people a way to stay entertained and connected amid lockdowns. And even as restrictions eased and activities resumed, gaming has continued to be at the forefront of media diets, creating new opportunities for marketers to reach and engage with younger consumers. 

But there’s certainly an art to advertising to gamers, who are sensitive to intrusive brand messaging. Navigating the nascent world of in-game advertising will be an important strategy for brands, especially amid the rise of Web3. 

“Gaming's ever-increasing influence on culture, coupled with the promise of the metaverse, has created limitless opportunities for marketers and advertisers,” Dan Holland, executive VP and gaming lead at Dentsu, wrote in an email.

Read more: Metaverse glossary for brands

Below, Ad Age unpacks the nuances of the gaming audience, opportunities for brands to reach them and how to measure the success of in-game campaigns. 

What is the makeup of gaming audiences?

There’s long been a misconception that the epitome of a gamer is a teenage boy, holed up in his parents’ basement, eating junk food and guzzling soda. According to Anzu, an in-game advertising platform, more than 226 million people play video games in the U.S. and 55% of those people “most definitely” identify as gamers. 

But the number of gamers may be even higher, with millions of people playing more casual mobile games like “Candy Crush” or “Bejeweled.” These types of games tend to skew female, with 81% of female gamers surveyed by Anzu saying they play a mobile game. But female gamers drop off when it comes to PC and console games, with 39% and 44% of female respondents playing those, respectively. Around 70% of male gamers play PC and console games.

More than 80% of U.S. gamers are over 18 years old, and 55% are over the age of 35, according to audience research firm Nielsen. The number of people around the globe who play video games has grown from 2.03 billion in 2015 to 2.96 billion in 2021, according to a report by Newzoo, a gaming analytics firm. The number of players is projected to hit 3.32 billion by 2024. A survey by Newzoo found that 16% of U.S. gamers identify as LGBTQIA+, 15% as Black, 20% as Latinx, and 5% as Asian American.

“There used to be this notion that brands had that gaming inventory won’t hit their customers,” said Jeff Sue, general manager of the Americas at Mintegral, a mobile advertising platform. “But there are plenty of people playing games, not just younger men. The key is to find the titles your audience is playing.”

It’s also a misconception that gamers are opposed to advertising. Anzu found that 75% of U.S. gamers are positive or neutral towards in-game advertising. Half of gamers ages 25 to 44 say that ads enhance the gaming experience, while 50% of U.S. gamers say it's important to see their favorite brands in games.

Opinion: Why gaming will be the next huge advertising channel

How big of an ad marketplace is gaming?

According to Newzoo, the global gaming market was worth $175.8 billion in 2021, with North America accounting for 24%. The popularity of mobile gaming is starting to attract more attention. In the U.S., mobile gaming ad revenues are on the rise, from $5.49 billion in 2021 to $6.26 billion in 2022, according to eMarketer. It also forecasts that mobile gaming revenues will hit $7.78 billion in 2024.

What are the hurdles for brands looking to advertise in games?

Gamers are notoriously picky when it comes to ads. In 2020, EA had to backtrack after placing a full-screen, in-game ad in its UFC 4 game. The ad for the Amazon show “The Boys” appeared during replays. Players were furious that the ad was introduced after the game’s initial release so that it wouldn’t be included in reviews, and appeared in a $60 game.

Roblox has been accused of deceptive marketing by Truth in Advertising (TINA), an ad watchdog group, with the Federal Trade Commission. In a letter, TINA said what is considered advertising within Roblox is not clear. Roblox’s official stance is that ads cannot contain content for players under 13 years old, but little is done to enforce this policy. There are dozens of unlicensed brand games and avatars selling branded goods.

Read more about the Roblox marketing complaint

In general, marketers are concerned with advertising around more violent games or more adult content. But Itamar Benedy, CEO and co-founder of Anzu, says that there are other brand-safety issues around non-gaming ad experiences. “Think about a football game. There are people who are drunk, maybe they are shouting or being rude,” he said. “Maybe there are non-brand-safe activities happening outside of a stadium, but brands don’t mind advertising in those settings.” Violent or war video games can be viewed the same way.

How are in-game ads measured?

For now, there is not a standardized measurement for in-game ads. The Interactive Advertising Bureau is in the process of updating its standards, which date back to 2009. For many, the update is a signal of gaming as a viable marketing channel.

“It’s exciting to see in-game ads moving to be seen as a real medium with its own standards, rather than pulling from other measurement standards,” said Natalia Vasilyeva, VP of marketing at Anzu.

Some game advertisements are easier to track, like click-through rates or a video ad being tracked by completion. When it comes to mobile gamers, 51% would watch an ad to play a mobile game for free, Agatha Hood, senior director of customer success at Unity, a cross-platform game engine, said during last month’s IAB Playfronts, an event for media buyers and marketers to learn about advertising and partnership opportunities in the gaming industry.

Other companies have worked to prove ad measurement on their own. In March, Anzu partnered with Oracle Moat, part of Oracle Advertising and Customer Experience, for their own viewability measurement on mobile and PC games. Frameplay, an ad platform for video games, recently introduced a metric called “intrinsic time-in-view” to help brands measure the amount of attention ads get in video games. The metric was backed by two separate studies and Dentsu.

Getting used to in-game ads, and agreeing on measurement standards, can help set the foundation for advertising in the metaverse or other VR settings.

“The metaverse will have ads, but they might not show up the way we think of now,” said Vasilyeva. “We might see more advertising in action.”

Read more: A guide to metaverse marketing

Where can advertisers buy in-game ads?

There are several options when it comes to in-game ad inventory. 

In mobile games, advertisers can buy banner ads, interstitials that appear between levels and ads that let players unlock in-game boosts or currency. These can often be found in free-to-play games as a way to keep players interested without making an upfront purchase in the app store. Brands can also create their own branded mini-games.

For online games, brands can buy digital billboards or posters, as well as placements usually found in traditional sports settings, such as courtside, fieldside or stadium spots. 

Microsoft and Sony are reportedly working on a program that will let brands place non-disruptive ads in free-to-play Xbox games, according to Insider. Microsoft plans to build a private marketplace to let select brands advertise as a way to not irritate gamers. 

In February, NBCUniversal partnered with Anzu to open up video game inventory for brands trying to reach younger audiences. NBCU’s clients will have access to Anzu’s inventory of gaming partners, including Microsoft Xbox and Ubisoft.

The key for brands is to blend into the gaming content and not disrupt gameplay. Examples could be a billboard ad in a racing video game or a banner ad on the bottom of a PC game. 

“Most players welcome in-game ads, as long as they don’t prevent them from playing or interrupt game play,” said Vasilyeva. She notes that especially with free-to-play games, most players are open to watching an ad for continued play or game boosts. 

So far, several brands including Vans, Nike, and Ralph Lauren have turned to Roblox as a way to get in front of game players. Other brands and athletes have made their way into the battle royale game Fortnite as player skins, including Balenciaga, the NFL, and Naomi Osaka. Coca-Cola made an island in Fortnite called “Pixel Point” in honor of the beverage company’s new “pixel-flavored” drink.

Read more about NBCU betting on video game ads

How much does advertising in video games cost?

Like traditional ad campaigns, in-game advertising costs vary based on the standard cost per thousand impressions (CPM) and depend on the length, placement and budget of a campaign.

CPMs can be cheaper for network buys, or more expensive for individual games and targeted placements, according to Sarah Stringer, executive VP and head of U.S. media partnerships at Dentsu. Placements can also be bought programmatically or through direct agreements with game publishers.

Lewis Hadley, VP of marketing at Bidstack, says that mobile inventory can have a CPM of roughly $6, while PC or console placements can have a CPM of around $12 to $13.

Read more: Ad spending is decreasing

How are ad agencies building for in-game advertising?

Similar to agencies developing TikTok production studios, they have also started bulking up their gaming offerings. In January 2021, Publicis announced it would launch Publicis Play, an end-to-end gaming solution for clients. Dentsu kicked off its own gaming division in October 2021 and has since worked with brands including KFC, Foot Locker and Subway.

What is the connection between gaming and the metaverse?

For many brands, finding their way on gaming platforms is one of the initial steps of their overall metaverse strategy. Exploring a branded experience on Roblox or Fortnite is a much lower barrier of entry when compared to setting up a crypto wallet to buy an NFT or creating an experience that requires a VR headset. 

“Gamers inherently understand digital economies, using avatars, navigating digital worlds, and using digital goods,” said Sue. “They have a head start [on adapting to the metaverse] and will have a shorter ramp-up period than other user segments.”