In-game ads not very effective, says St John
Despite pioneering in-game ads, Wild Tangent has found them ineffective and switched to a different model
Wild Tangent founder and CEO Alex St John is no longer a believer in in-game advertising.
"I think a lot of the perception out there - the rest of the state of the market - thinks the advertising opportunity is in in-game advertising," he said during the annual Wedbush Morgan Securities Management Access Conference.
"And in-game advertising - Wild Tangent has patents on it, we did it very early on, we have a lot of in game ads, we sell them - is not a very effective way because you've got to plumb the game, you've got an unproven method of measuring the value of that ad, that unit is not trackable..."
In retrospect, St John says that it is a huge mistake to ever interrupt a game while somebody is playing it. He is no longer thinks injecting ads into console games is a "bright idea or where the market opportunity is."
"I have to say - after brilliantly pioneering the space and being a huge advocate of it - we've actually shifted models to one that works a hell of a lot better and is remarkably simple," St John remarked.
That model is advertising supporting gaming on a per play basis, where users decide if they want to spent their own money or have a company such as Coca Cola pay for their session for them.
"And if you say 'I'll take the free play from Coke,' Coke plays a little 30 second video ad while the game is loading - that's the time you are sitting there waiting for the game to load anyway, it plays the Coke ad. It's not doing anything else. Then you go into the game and play it for free," he explained.
"We average USD 140 CPMs putting that ad unit in front of any kind of game without modifying it, without bothering developers, without crapping it up. We serve it with a standard double-click ad server.
"You sell it with standard media sales force, part of a standard IAB ad unit. It sells great, it's easy to scale, it is easy to explain, it is easy to measure, and it works for any kind of game."
Wild Tangent's ad revenues went up 400 per cent the minute they switched to this model in 2007.
"I came to the opinion that a lot of the in-game and some of these variations you've heard of out there - they're a lot of work, they take too much explanation, they actually don't make sense," St John said.
"Something as very simple as selling a game on a per session basis, and playing a pre-load video, works fantastically well for any kind of game."