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In the second part of our interview, IGA Worldwide's Ed Bartlett discusses the consumer reception to in-game ads and how they're perceived by developers, publishers and platform holders.

To read part one of this feature, click here.

Ed Bartlett: We've done a significant amount of our own research. There's also significant third party research by people like Nielsen Interactive Entertainment which shows that gamers actually prefer to see real brands in their games to improve the suspension of disbelief.

Nielsen has reported that around 70 per cent of core gamers actually like to see these brands. There was a particular comment on a forum discussing GTA where somebody was saying that you have this amazing city with an incredible environment, but you see these made up shops like Zip instead of Gap. It reminds you that you're in a game, whereas in a film you're seeing real streets with real stores and it really improves immersion.

Stopping the game to show a character drinking a particular brand of drink, or anything which interrupts the gameplay in that way, is a definite no-no for us. We would certainly never advocate that type of advertising.

However, I've seen particular integrations done in creatively compelling ways which actively add to the game experience. We did a particular placement with Red Bull whereby completing the game unlocked not only a new bike but a new game mode. Many people actually said that this was the best part of the game and that it doubled its lifespan.

That's giving gamers new content and I think we'll see advertisers picking up on ways to use this medium to give benefits to gamers, which in turn reflects positively on the brand.

How important is in-game advertising likely to be for console games as the next-gen battle kicks off?

We've been talking to all the major platform holders now for around 18 months and they're all very keen to look at new models, especially with 360 and PS3. With the audience they're targeting, along with the services which they're offering through their online systems, this will be something which will be very important to them.

I think you also need to remember that the third party publishers really need this new revenue stream, and they drive an awful lot of what happens. The platform owners really need those third party titles as well as their own first party franchises.

With Massive being bought by MS, you've seen that it'll be a big part of the future for 360. Whilst Sony are concentrating on their platform launch at the moment I think this will be something which will be a major strategic move they'll make in the future.

What are the biggest concerns about in-game advertising for publishers?

I think the biggest worries they have are about fragmentation, something whcih has been the main problem with TV advertising over the last few years. You've gone from having 4 or 5 channels with a high, focused viewership to having 50 or so channels with lower audiences.

This has really complicated the advertising strategies for a lot of advertisers, and complicated how they reach certain audiences. They can no longer just buy a slot after Coronation Street on ITV and reach 15 million people. You have to buy across a number of channels, it's all very fragmented and at every extra stage there is a degree of wastage.

I think there is a danger of this happening to in-game advertsing. If an advertiser has to go to massive to buy the 360 version, us for the PC and us or another company for the PlayStation version and somebody else for mobile, then it's creating a fragmentation effect - and that can be quite damaging. I think there will be a way found for that not to happen.

You've mentioned the PS3 and the 360 there, but not the Wii. Do you think that in-game advertising will have a role to play when it comes to Nintendo's new console?

My girlfriend was playing Mario Kart on the DS at the weekend and there are even billboards around the track on that; it's pretty amazing. There are certain games where advertising just fits in and it should be there. Racing games, sports games - obviously these aren't going to be the focus for the Wii but there will be franchises where they will fit.

Where there's relevance and substantial intellectual property I don't see why it shouldn't apply.

What's next following your deal with EA? Are you in talks with other third party publishers?

Sure. We've already signed up Codemasters and Atari, and several leading independent developers. Really we're in talks with every major publisher and every major third party developer.