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The Advertiser's Context

Supermassive's Pete Samuels gives us his thoughts on the state of in-game advertising

In-game advertising is set to be one of the hottest subjects of 2008 and while most people seem to agree that there's a lot of potential new money to be made for videogames publishers, quite how that will be realised is still debated.

Here Pete Samuels, managing director of Supermassive Games, offers his thoughts on the subject.

The success of anything new takes twice as long as you expected and ultimately becomes twice as big as you initially imagined. If you don't think that in-game advertising is still new, then you're talking to different people than I am!

Analysts at the Yankee Group recently announced that their initial estimates of USD 2 billion annual sales of in-game advertising by 2011 may have been overstated, and revised the estimate to less than USD 1 billion. The fact is that the benefits of using games as an advertising medium, that seem so logical to some of us, require exceptional levels of justification to those within the advertising industry that make the spending decisions. As time passes, and we are able to justify these benefits, we can expect that the demand will grow exponentially.

So, why is it taking twice as long as anybody expected, and why did Jonathan Epstein, president and CEO of Double Fusion, recently advise anyone entering the in-game ad business to "Gird your loins"?

The first issue is that there's currently no universally accepted formula for either price or value.

Forget, for a moment, that the three big sellers of aggregated in-game ad space don't even have the same measure for what constitutes an 'impression' (the oft-used number on which the advertiser gets billed). We are all very aware that videogames are still, and will probably be for some time to come, a fast changing and rapidly diversifying form of entertainment.

The entire gaming landscape changes year on year, and there are fundamental differences between one in-game advertising opportunity and the next. Those working within the industry may see these changes as small, logical progressions, but for those outside it can seem like the industry undergoes a revolution every couple of years.

Take a look at more traditional advertising media such as TV, print and outdoor, and from an advertiser's perspective they probably see the same rate of change every ten or twenty years. As a result, the more traditional media that competes for advertisers' budgets has the benefit of years of stability, with research and trend analysis that the advertisers have become used to working with.

It will be a long time before videogames reach that level of stability. New and therefore unproven opportunities will continue to emerge, and so value, which really can't be adequately summarised by anybody's method of counting impressions, will still need to be justified on a case-by-case basis.

While new reports on the effects of in-game advertising, which are seemingly published every other week, certainly help to raise some awareness of value, the reports themselves are seldom seen as truly independent studies, and often lack credibility as a result. One of the more recent reports, a study into the effects of advertising in Battlefield 2142 conducted by EA and IGA perhaps retained more of its credibility as being conducted in conjunction with 3 advertisers (Unilever, Diesel and Nike) and their agency, MindShare.

The fact remains that most advertisers still prefer to spend their money on 'tried and tested' media.

Despite frequent acknowledgement that some of the more traditional advertising media no longer works as well as it once did, newer vehicles, like in-game advertising, are seen by many as advertising spend with unpredictable reward, and for some, it is 'better the devil you know'.

Don't get me wrong, it is not that advertisers and their agents are closed to the concept of using games as an advertising medium - in fact many have appointed specialists within their organisations to assess such opportunities on their behalf. Apart from within these few though, there are many assumptions made about the games audience that we know to be dated, and even many of the advocates that work directly for the advertisers have a tough time promoting the medium within their own companies.

When explaining to advertisers that the average age of a gamer is 30 plus, I'm frequently met with a look of disbelief, and when describing the demographic for certain in-game opportunities, I hear a startled reply: "What, women play videogames too?"

Despite this, most big advertisers do find money from somewhere in their budgets to have their own casual games developed - it seems that everyone wants to be a game developer!

The amount of free games available on the web with advertising sponsorship, or advergames designed to sell a specific product, is huge and rapidly growing. Most advertisers have their own game on their own site, and some have taken it a stage further, setting up specific sites for their own promotional games. These are relatively cheap for advertisers to commission and publish, and some get millions of hits, although these games are served to a very specific subset of the gaming population and engage on a different - not necessarily worse, just different - level to big budget game titles.

A lot of big advertisers still remain unconvinced about what in-game advertising can do for them.

We've all seen advertising in our videogames, and can see the types of products, and even the companies, that have grasped how in-game advertising can work for them. We typically see advertising for men's hygiene products, technology, men's fashion and sports, and automotive, right? But what about the rest?

We are seeing increasing diversity in console gaming environments, with the growing 'social genre' of videogames and advertising opportunities above and beyond the value of aggregated banner impressions into dynamic product placement, sponsored game content, and the potential for advertisers to tap into, and even to create their own game-playing communities.

The advertisers that are getting involved currently are a small proportion of the total market, capitalising on a small proportion of the available opportunities, and as the realisation of the expanding demographics of gamers and the breadth of available opportunity grows, much more of this potential market will be realised.

Of course, there's a limit to how many new things any advertiser can get involved in at the same time, and those making the decisions on behalf of advertisers are inundated with new opportunities being driven by web development and advances in mobile technology, and there is a very real fear of taking a leap that results in negative advertising.

Believe it or not, this is as much of a barrier with the advertisers as it is with game developers and publishers. There seems to be a common belief that advertisers donât care too much about the context, just as long as their advertising gets delivered. This simply isn't the case. They are at least as sensitive to their advertising being delivered in context as game publishers and developers, and will shy away if they fear that their advertising might invoke resentment in the player.

Where in-game advertising is done badly, it often provokes angry and vociferous responses from gamers, and makes advertisers even more wary of entering the arena. Couple this with acrimonious blogs from seriously disappointed gamers wherever they see ads in their games without a visible benefit to themselves, and I think it's fair to say that there's much work still to do to win hearts and minds on both sides.

So what's needed in the future for advertisers to forge positive relationships with a gaming audience? Well, with consumers becoming more and more savvy, and with many more entertainment choices available to them, promotion of products or brands needs to be seen to be part of the entertainment, and provide a real and obvious benefit to the player.

Such promotion should do much more than simply be 'acceptable' in the context of the game, it needs to add value in some way that makes the player feel positive about its inclusion, not negative and not even neutral. That's the challenge for both advertisers and their agencies, and for the game developers and publishers and their agencies, and unless it's a game where the consumer wins, then nobody will.

Pete Samuels is the managing director of Supermassive Games.

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