USA Luge targets faster runs Colleges gain insights on merch sales Do online video views measure up? Unilever uses data to tidy up campaigns A new take on sponsor exposure The data explosion in sports Inside the NFL's injury database What drives team loyalty? The data specialists Behind ticketing's last-minute offers
In-game advertising continues to grow, but industry backs off meteoric projections
Published July 27, 2009
In-game advertising, widely seen earlier this decade as the next big thing for marketers, has predictably felt the pinch of the recession.
But while other forms of advertising have seen retraction in sales volume, and in some cases historic reductions, in-game advertising has experienced a slower but still existent growth curve.
Estimates of the size of the developing market for in-game advertising vary widely depending on individual measurement agencies; there exists no de facto industry standard system of measurement. Consensus figures point to the market being worth $120 million to $150 million per year, up from $80 million two years ago. The meteoric projections of growing to $1 billion in total revenue by the 2010-12 time frame, however, are being scaled back.
“The category continues to grow, but the clock is definitely being set back a bit on hitting that $1 billion mark. It may be another couple years beyond ,” said Jonathan Epstein, president and chief executive of Double Fusion, a San Francisco-based agency working extensively in in-game advertising. “But sports in particular still lends itself very strongly to in-game advertising given what’s happening out in the real world with sports and advertising.”
Similarly, London-based market research firm Screen Digest is projecting a 2014 time frame to hit the $1 billion mark.
Though the pace of growth appears to be slowing, in-game advertising hit a cultural touchstone last fall, when Barack Obama’s presidential campaign purchased ads in “Madden NFL 09” and several other Electronic Arts titles, with the ads served to connected consoles within 10 swing states including Ohio and Florida.
A pre-election filing indicated the campaign spent less than $45,000 on the placements, but the small amount of marketing expense — representing a tiny fraction of the $250 million estimated to have been spent by the Obama campaign on TV advertising — garnered nationwide press coverage and a late jolt of affinity among younger voters.
“It wasn’t necessarily a turning point for the industry, as the growth for in-game advertising had started long before Obama, but it definitely was a great moment,” said Jack Koch, head of marketing research for Massive Inc., the Microsoft-owned company that works with EA, among others, on in-game advertising sales, including the Obama buy. “That effort clearly showed the kind of effectiveness and recall that in-game delivers.”
Much like more traditional forms of media, in-game advertising agencies are now pushing to expand their category reach beyond more traditional buyers such as automobile, soft drink and telecommunications companies. In particular, spending in the space by consumer packaged-goods companies has more than doubled in the last year, according to Massive research.
In addition, advertising for gaming within browser-based games and social networks such as Facebook is quickly assuming heightened importance.
“The big things we’re excited about now are placement in downloadable content, online gaming, tournament sponsorship and the like,” Epstein said. “These are things that are additive [to console-based gaming] and make the whole gaming space that much more appealing.”