Grabbing the attention of the highly elusive 16- to 24-year-old male market has long vexed marketers, with most traditional forms of advertising failing to provide a secure route into male youth culture. But many believe help could be at hand, with the imminent arrival of the next generation of video game consoles.
One in four households in the UK has a games console – not far behind the number of households with cable or satellite TV, and by 2004 there will be 45 million console game users in Europe and the US, according to research by Datamonitor. This figure is nearly double the predicted penetration of PCs – 28 million.
Datamonitor also believes that by then the gaming industry’s revenue streams will come, not from the sales of consoles and video games, but from advertising and e-commerce.
And with such a mass audience, it’s no surprise that admen are already looking at ways to exploit the technology.
They won’t have to wait long – new consoles, offering a convergence of technologies including Internet access and DVD are on the way. Currently there is just one “next generation” system on the market. Sega’s Dreamcast was launched in the UK last year, and offers gamers a DVD and Internet access through its online gaming community, DreamArena.
But sales are reported to have been disappointing, although Sega refuses to confirm how many unites have been bought. Industry analysts believe most gamers are holding out for the long-awaited launch of Sony’s new PlayStation, PS2, available from November. And next year will see the launch of other challengers, including Microsoft’s X-Box and Nintendo’s GameCube.
To date, both the gaming sector and the ad industry have been slow to recognise the benefits of working together. Julian Ireland, director at youth specialist ad agency Target Media, says: “A lot of marketers outside the gaming industry simply don’t understand how important gaming is to youth culture. Likewise, those in gaming have tended to be blind to the potential of diversifying income streams.”
Ireland says it was the arrival of Sony’s PlayStation in 1995 that led to the rapport between youth subculture and the gaming sector. He says: “Prior to PlayStation, gamers were seen as geeks. But Sony came along and radically changed the market with a huge campaign which sold the console to trendy opinion-formers. It is now firmly rooted in youth culture.”
Ireland believes gaming provides huge potential for advertisers. He says: “If young males aren’t watching TV because they’re playing video games, it is easy to see why marketers need to catch on.”
Some have already started to exploit the medium, with many of the sporting games carrying banner advertising on perimeter boards. The appearance of real brand names and logos not only makes the game more realistic, but also gives advertisers direct access to young men.
Steve Gladdis, associate director at Mediacom, which holds the media account for video game manufacturer Electronic Arts, says: “Previously, games manufacturers put in perimeter board ads without thinking about their commercial value. They asked for permission to use the brands just to make the games more realistic.” Gladdis is now in negotiations with companies about buying ad space on Electronic Arts’ football title Fifa 2000. One of his greatest challenges is to convince clients that gamers are no longer a niche market.
He says: “Many of our clients still prefer to take out an ad in FHM, for instance, where they can use trusted Audit Bureau of Circulations (ABC) figures to monitor impact. Gaming, on the other hand, is still finding it hard to shake off its image as a past-time for anoraks.”
One promising sign has been the increasing number of licensing deals between record labels and computer game manufacturers. In the case of the Sony’s video game Wipe Out, the deal included the launch of a compilation CD based on the game.
Gladdis adds: “Wipe Out was designed specifically for young people wanting to relax after returning from clubs. The game used bright lights and music from artists, such as the Chemical Brothers and Prodigy, which would appeal to this particular part of youth culture.”
Ireland points out that such collaborations help record labels to target their core markets. He says: “The gaming industry is taking a lot of revenue from other traditional youth markets, such as music. If people are paying &£40 for a new game, that is &£40 they are not spending on three or four new CDs.”
He believes the interactive element of the next generation consoles is likely to win over more advertisers. And the fact that the majority of gamers will play and buy new games online, will allow marketers to offer inter-active ads.
Domino’s Pizza was quick to identify the way ahead when it accidentally stumbled across the possible marketing force of the interactive console. Marketing director Chris Moore explains: “After a few weeks of launching our online service we realised that three per cent of sales were from people ordering through Dreamcast consoles.”
This led to a partnership with Dreamcast, whereby games ordered online would be delivered by the company’s national fleet of pizza deliverers.
Moore is now setting up a project with an online game site owned by Leisure District. He adds: “When a gamer is nearing the completion of a level of the game, an interactive ad will appear asking if he wants to order a pizza.”
He believes that the launch of Sony’s PS2 will determine the viability of the console as an advertising medium.
“If the PS2 flies off the shelves, ad men will go crazy for it. So far, we have just scratched the surface.”
Moore points out that the medium is ideal for any product whose core audience is the youth market. He says: “For us it is perfect. Gaming and pizza delivery are part of the daily repertoire of many young men. The e-commerce route is an obvious choice for us.”
But one observer, who works closely with Microsoft, warns advertisers against bombarding gamers with brands. He says: “Advertising will be essential to the future of gaming, but it is about building a story or personality which fits into the game.”
He adds: “The youth market is highly fragmented, so a scatter-gun technique could be a total waste of money and could alienate those you want to attract. Instead marketers should look to well-targeted sponsorships or ways of spreading a message by word of mouth. The strongest brands in youth culture are always those which are part of the scenery.”