Who wants to be a player?

Third-generation consoles, multi-player games and more people attracted by new formats have combined to raise marketing interest. After all, games offer an arena where players – who favour in-game advertising – can interact with each other and brands. By Nathalie Kilby

Labelled by some as the “third generation of advertising”, in-game product marketing is beginning to attract attention as it gathers momentum.

This week Orange announced a month-long in-game sponsorship of snowboarding game Stoked Rider, to coincide with the Orange British Snowboard Championships, in Switzerland next month. Games publisher Codemasters recently launched Toca Race Driver 3, which featured a game strand dedicated to the new Honda Civic marque (MW February 9). Meanwhile, T-Mobile has signed a six-figure deal to promote its Mates Rates tariff across the IGA Worldwide online games network.

Yet the union of branding and games is not a new phenomenon. GlaxoSmithKline’s Lucozade teamed up with Tomb Raider icon Lara Croft seven years ago (MW April 22, 1999), even going so far as to change the name of the drink to Larazade for a promotional campaign. These days, both the advertising industry and Croft are embarking on new adventures, as the games industry scales another level.

Third-generation consoles, massive multi-player online games (MMOG) and a conscious effort by the industry to attract new types of players all mean more people have access to games. Genres are moving beyond the classic “shoot ’em up” to lifestyle formats such as Sony’s Singstar, and brainteasers, such as Nintendo’s recently launched Brain Training (MW January 26). They offer an arena of participation where players can interact with each other – and now with brands.

In-game advertising is seen as a logical next step and is finding legitimacy as more marketers endorse the medium. Video games are no longer the preserve of adolescent boys. Instead, they entertain a generation of young, affluent men and the games audience demographic is broadening. The industry is growing, too/ in 2005, the global games industry was worth an estimated $25bn (14m) and, according to PricewaterhouseCoopers, is set to be valued at $55bn (32m) by 2009. In the UK, according to Screen Digest, software sales alone reached 1.2bn in the UK last year.

Whether it’s Nick Kang from Activision’s “True Crime: Streets of LA” kitted out in Puma clothing, or a poster advertising the new series of Channel 4’s Lost in Anarchy Online, more brands are making their way into video games. Coca-Cola, McDonald’s, Sony Ericsson, T-Mobile, Universal Music – the list goes on. Games such as the one that will feature a virtual Vin Diesel racing the streets of a modern city offer excellent opportunities for in-game campaigns.

Massive Inc and IGA run online games networks over which they can dynamically deliver advertising via the internet to the numerous titles on their networks, and reach over 6 million gamers between them. They target demographically and geographically, and run campaigns in real-time in several languages. Not surprisingly, they have signed up big brand advertisers, including those mentioned above.

A willing audience

IGA vice-president Europe Ed Bartlett says the opportunities for brands to interact with a willing audience offer huge potential. Cross-promotion with video games, especially for clothing brands, bring reciprocal benefits for advertisers and publishers. He says many advertisers are eyeing the medium: IGA has done consultancy work for Procter & Gamble.

“It was very difficult initially to attract business,” he says. “Brands want to do it, but often agencies don’t have the specialist knowledge. Many agencies are also very reluctant to look beyond television.”

But as TV’s ability to reach mass audiences dwindles, advertisers – as demonstrated by Honda’s deal with Codemasters – are forced to look to new communications channels. Ian Armstrong, customer communications manager at Honda, says of the deal: “If effective it would be foolish not to look at the medium again.”

Most of the major games publishers are dabbling with in-game ads. In December, US-based Activision published research conducted with Nielsen Entertainment. Some 70% of gamers favour in-game product placements, and brand awareness is raised significantly by it. Last week, Midway Games signed up to Double Fusion, another dynamic games agency, while Electronic Arts, Atari and others are all looking at in-game ads to boost revenues.

Bart Michels, managing director of global clients at Added Value, says: “The audiences for computer gaming are growing with people of all ages and both sexes, so products reach more people. The technology allows gaming networks and online gaming groups so the potential audience is vast. Also, gamers tend to trust the gaming channels so marketers can feel they are getting on the inside by placing their products. And while people play games they are likely to consume soft drinks and snacks which they see in the games.”

There are about 101 million units of PlayStation2, and 30 to 40 million Xboxes globally. This adds up to a lot of eyeballs. The market in pre-owned games has burgeoned, while release prices are falling as publishers and retailers fight a bitter battle. This is an industry that can only grow, not least as the online networks can track who sees what, when and how long they linger at an ad site.

Make an impression

The pricing model for the dynamic networks are based on impressions or, in the case of Massive, sites viewed for ten seconds or more. The rates for inclusion in console games are a little less standardised, but can be comparable to TV budgets. However, Codemasters director or business development Matt Davies explains: “Whether an advertiser has millions or thousands to spend, there is always a solution.”

Massive chief executive Mitch Davis says the key to a successful in-game strategy is to ensure gamers are not disrupted. “We want to engage gamers, and players say advertising enhances a game; it brings a further element of realism. We’ve had players crowd around in-game billboards to watch the ads. But it is important that the advertising is not intrusive.” He adds that while in-game ads are proving popular for consumers, “third-party auditing, tracking systems and valuable data about each campaign mean we can demonstrate the effectiveness of the medium”.

Starcom Digital director Nigel Sheldon believes that metrics and the evolution of games have helped the medium grow, although he concedes that it is a nascent area of his agency’s business. “A few years ago, advertisers had to be involved from the start of a game’s development,” he says. “Now, with the ability to feed ads into games dynamically, you can measure effectiveness and use activity that relates to a current campaign. Advances in online gaming and content has made the proposition more attractive for advertisers.”

Lucrative source

Not only advertisers benefit. Bartlett says: “The publishers need in-game advertising. Production budgets are rising. When I was a developer, 12 people worked on producing a 200,000 game. Now, more than 100 people are working on games that cost anything from 5m to develop.”

Davis agrees that game budgets mean developers have no choice but to tap into this lucrative revenue source. “But rising marketing budgets are pushing up costs,” he adds. “As publishers try to reach a wider market, their advertising becomes more sophisticated and costs rise.”

Codemasters’ Davies says: “Brands can be confident that with third-generation gaming they will get a good representation in a game. And, most importantly, gamers are a captive audience.”

Latest from Marketing Week

PLEASE SIGN IN OR REGISTER. IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and inspiration that will help you develop as a marketer and leader.

Register and receive the best content from the only title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work, so we can make Marketing Week more relevant to you.

Register now

THE BEST CONTENT

Our award winning editorial team and columnists will ask the biggest questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we will be your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Dedicated to developing your skills and helping you achieve marketing excellence. Find guidance on leadership, professional development and the latest industry jobs.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here