In-game Advertising

An article wrote by Rik Groenland

Imagine playing a game of football on your laptop. But instead of playing with the classic white ball with the black hexagons on it you are playing with an Adidas or a Nike football. That is in-game advertising in a nutshell. Ten years ago no one ever heart of advertising in a game and nowadays companies spent around $78 million on it. And a Yankee Group study estimated that worldwide spending on in-game advertising will exceed $971 million in 2011.

This data tells us that in-game advertising is a booming market. It all took a flight with the start of Linden Lab’s ‘Second Life’. Second Life is an online digital community where each player can create his or her own dynamic content. This creation of own dynamic content gives companies the opportunity to create their own shops and advertising in this digital world. Toyota, Sony, Nissan, ABN Amro, Adidas, Reebok and even Duran Duran are a small selection of companies with dynamic content in Second Life. And that is where there’s an opportunity for O’Neill. With a still growing community of nearly 10 million players world wide, Second Life is an ever growing virtual market waiting to be reached.

Google and Microsoft also woke up and smelled the coffee. Both of these big players have jumped into the in-game advertising train. February this year Google bought the in-game advertising company Adscape Media costing them about $24 million. With this knowledge within the organization, Google is outlining a plan for a new system called ‘AdSense for Games’. AdSense already is the successful formula for advertising on Google. ‘Adsense for Games’ will be an advertising system for webbased games.

Microsoft bought the company Massive for about $200 million last year. Massive also specializes in placing dynamic advertisements within video games. But Massive initially focusses on Microsoft’s Xbox Live system and MSN Games site. Where Sony’s Playstation 3 is talking with Microsoft’s opponent Google. So there is a war to be won between two teams. At one hand we have Sony and Google and at the other hand we have Microsoft and Massive battling for millions of dollars revenue.

From the last two examples we see that in-game advertising is becoming a big business. But the biggest question is whether in-game advertising works. Because the translation from in-game advertising into sales has yet to be measured successfully. This means that developing better measurements of success is a crucial next step for the industry.

Sources:
The Hollywood Reporter – In-game advertising It’s all in the game
http://www.hollywoodreporter.com/hr/search/article_display.jsp?vnu_content_id=1003123903

Marketallica – In game advertising getting serious
http://marketallica.wordpress.com/2006/10/12/in-game-advertising-getting-serious-part-one/

The future of media – Google to buy In-game Ad Company
http://blog.ipglab.com/?p=84

Seattle PI – Google takes its ad system into the video-game market
http://seattlepi.nwsource.com/business/324213_googleads19.html