Will In-game Advertising Ever Realize Its Potential?
While product placement in video games is almost as old as video games themselves, there has been general exasperation for both game manufacturers and advertisers alike that in-game advertising has not lived up to its extraordinary promise. Consumers are demanding ever more sophisticated and life-like gaming experiences, but game producers with ever-tighter budgets are struggling to meet their demands without a new source of income. In-game advertising was lauded a decade ago as the answer to everybody’s prayers, but games producers have not been able to command the sums of money that TV and movie producers have for advertising spaces. While in-game advertising is a growing industry estimated to reach US$2.67 billion in value by 2017, that is still a paltry sum as compared to other advertising mediums.
The question is how can advertisers and game producers work together to create an advertising system that creates a win-win-win situation for consumers, advertisers and game producers? Here are just some of the methods games producers are trying to use to increase profits while providing concrete benefits for consumers.
Subtle product placement versus brand partnership
Product placement supposedly works best subtly, and because of this the video game industry adopted the practice of casually dropping logos and billboards in the background of games in a manner similar to product placement in movies. How users consume video games and movies however is completely different: while the latter allows people to take in the entire picture (and therefore notice ads), the former encourages concentration on gameplay (and therefore ads are ignored). Because of this brand partnership is emerging as a better way to engage with gamers, who often contain the key 16-35 male demographic that advertisers are keen on scooping.
Product placement does not need to be subtle to be a draw for advertisers, a fact that EA have used to their advantage for several years. EA successfully monetised their hit game ‘The Sims 2’ by bringing out inexpensive ‘stuff packs’ where consumers could buy extra clothes and furniture for their sims. EA then made the intuitive leap of having brands sponsor their own stuff packs, creating revenue for EA and easy advertising for the brand. EA’s first branded stuff pack ‘H&M stuff’ was a radical move in 2007, yet it was a move that paid off for the Swedish fashion chain, EA and Simmers alike.
EA’s move to partner with brands from IKEA to Diesel was surprising because unlike most in-game advertising, it was brazen. Instead of trying to make the product placement as subtle as possible, EA banked on a transference of brand loyalty in the hopes that consumers would want to buy even virtual items made by their favourite brands. It worked, and other producers should take note of it. Instead of trying to hide advertising, engaging gamers with advertising works better simply because it is honest.
Interrupted play (for a lower price)
Much noise was made in the gaming world last year when it emerged that Sony had patented an advertising delivery method similar to what we already see in television. Under Sony’s plans, gamers would see their games pause for a few minutes while an advertisement was played, and then their game would resume. The almost universal backlash to the idea well sums up the dilemma for game makers, who need to draw in more advertising revenue to meet rising costs but are afraid to tamper with user experience. Pausing games to play advertisements is not a new idea, but in a world of realtime online multiplayers it seems practically unworkable. One way many gamers have suggested to make interrupted play more palatable is lower prices: gamers could pay less to have an ad-supported game or pay premium for an ad-free version.
Exactly how to incorporate ads into mobile games has caused a real headache for game designers who do not want to lose limited screen space. Popular games like Angry Birds usually have a small banner ad at the top or bottom of the screen, but more often than not this leads to gamers accidentally hitting the ad during gameplay. This isn’t just annoying for the players but bad for a creative agency or advertiser, who often pay per click.
Advertising in computer or console games is a trickier business than free-to-play internet games simply because consumers have already paid for the gaming experience. TV is theoretically free to view, so it is understandable that our viewing is interrupted at intervals for advertising that supports the TV programmes and allows us to watch for free – and the same logic works for free games. When consumers pay for a game, they want advertising that does not interrupt their experience. In a sentence, that is exactly the lesson advertisers and game producers need to learn.
The lesson to learn
To sum up, in-game advertising will realise its potential when it learns to trust consumers and their choices. If gamers pay premium for a game, then they deserve to have that experience uninterrupted. However, for free or cheap games, they are more likely to stomach (or even enjoy) advertising if it is targeted and useful. Only when the industry learns this lesson will they truly be able to realize the potential of in-game advertising.
Kate Simmons is a freelance writer and blogger and an avid computer game fan. She likes to write about digital marketing, gadgets and social media.