Games: A Developing Market for Advertising

“Even though it may seem counterintuitive for a company to be motivated by profit to give away their product, new techniques involving advertisement that viewers cannot avoid can serve the interests of both gaming companies and advertisers toward the end users’ benefit.”

With the approach of games on mobile devices such as Apple products and other smartphones and tablet computers, games become something that can have an incredibly close relationship to people especially for the younger generation. While so many game companies are trying to get people to play their products, competition gets even more intense. As a result, many games are offered to people free. But free? People will probably wonder how these games can make profit for the company. The answer is quite simple and common: free games are supposed to be sponsored by advertising.  

An ad for another iPhone App placed on the top of the free iPhone game Unbolck Me

        In-game advertising, which means placing advertisements inside of the game where players can see as they play, started around 2004. It was not very big at that time, however, in 2006 when Microsoft decided to pay a big amount of money to Massive which was a company that could get others ads in games, things changed. Microsoft put itself in a position to cash in both from the games sales and from the revenue generated by the inserted ads by buying Massive (Terdiman, 2006). Soon the effective and innovative strategy was picked up by other rivals such as Google, and the modality of putting advertisements in games, was gradually accepted by the public as a new way of how consumers receive messages.  

        Games (including video games, computer games and mobile games) have many elements that make them ideal platforms for advertisements. In the golden age of advertising, the job of the advertiser is more complicated because now there is endless clutter that distracts consumers from receiving information. Also people often have shorter attention spans and cynical views of advertising. To add to these factors, digital video recorders are reducing the visibility of television advertising by allowing viewers to fast-forward over commercials (Glass, 2007). Unlike those other forms of advertisement, advertising in games is technically designed to make it difficult to skip advertisements and the players will always receive messages while they enjoy playing games. Zachary Glass’s study shows people tend to rate higher for a brand that appeared in a video game. That human psychological effect directly resulted in Obama’s favorability after his team ran campaign ads on billboards inside of a racing game for him.  

Jalopnik/Electronic Arts

A screen grab of a Barack Obama billboard in the Xbox Live version of 'Burnout Paradise.'

         I randomly interviewed a student at Syracuse University who currently is using an iPhone with data plan from AT&T. Queenie, a sophomore from Arts & Science department, told me that  she started using her iPhone two years ago. For the last two years, Queenie nearly has been playing games on her iPhone on a daily basis. In her experience, people like her are more than a few and have gradually become the social norm as she can always find people around her to play games together in competing mode. With the prevalence of mobile devices, it allows people to have access to games really easily and conveniently. Just see from those people, you can imagine how potentially big the market can be. As Queenie also mentioned, when she played a game, an advertisement would always catch her eyes if it was placed right, to the right target, right direction and in the right position. Generating profits from those advertisements therefore seems very accessible; there will be big chances to gain huge amounts of money not only for the advertising company but also for the company that possesses physical or virtual goods (Takahashi, 2009).     

H&M virtual goods

         Market reports indicate more advertisers are moving more of their ad dollars to the games. The ads spend on game advertising in the U.S. was at $370 million in 2006 and this is expected to expand to $2 billion by 2010, and it is casual/PC/mobile an in-game advertising that will reap this revenue. In 2006 this accounted for 27% of the game advertising market, and by 2012 it will account for more than 80%. This is big money and big business and represents another stage in social advertising that can potentially transform advertising as we know it (Fisher, 2010). When the potential of in-game advertising as making profits will be fully discovered, the whole structure of the gaming industry might change and the revenue that comes from the industry could be boomed. It is the only source of moving and developing the industry since game developing needs much money to cover things such as a strong server, related hard wares also labor fees. That means, consider yourself as one of those game developers, advertisers, game player and even phone users, the tactic will definitely create a new trend for you to keep up with.  

References   

Fisher, L. (2010, October 17). Trends in In-Game Advertising. Retrieved from

http://www.simplyzesty.com/advertising/trends-ingame-advertising/

Glass, Z. (Fall 2007). The Effectiveness of Product Placement In Video Games. Retrieved from http://74.125.155.132/scholar?q=cache:XPIluCexCHEJ:scholar.google.com/+advertising+placement+in+games&hl=en&as_sdt=0,33

Nielsen (2010, November). Top 10 Video Games. Retrieved from http://www.nielsen.com/us/en/insights/top10s/video_games.html\

Queenie (2011, February). Interviewee.

Takahashi, D. (2009, May 15). The Top 12 Trends of the Video Game Industry. Retrieved from http://venturebeat.com/2009/05/15/the-top-12-trends-of-the-video-game-industry/

Terdiman, D. (2006, April 25). Microsoft said to be buying Massive. Retrieved from http://news.cnet.com/8301-10784_3-6065125-7.html

Various (2008, October). Recent Articles on Ads and Video Games. Retrieved from http://www.frankwbaker.com/videogameads.htm

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