In-game advertising
Encyclopedia
In-game advertising refers to advertising
in computer and video games
. IGA differs from advergaming
, which refers to a game specifically made to advertise a product.
The IGA industry is large and growing. In 2009, spending on IGA was estimated to reach $699 million USD
and is anticipated to grow to $1 billion by 2014.
The earliest known IGA was the 1978 computer game Adventureland, which inserted a self-promotional advertisement for its next game, Pirate Adventure. The earliest known commercial IGA occurred in 1991 when a spot for Penguin biscuits appeared in James Pond - RoboCod
.
IGA can be integrated into the game either through a display in the background, such as an in-game billboard or a commercial during the pause created when a game loads
, or highly integrated within the game so that the advertised product is necessary to complete part of the game or is featured prominently within cutscenes
. Due to the custom programming required, dynamic advertising is usually presented in the background; static advertisements can appear as either. One of the advantages of IGA over traditional advertisements is that consumers are less likely to multitask with other media while playing a game, however, some attention is still divided between the gameplay, controls, and the advertisement.
in the film industry, static IGAs cannot be changed after they are programmed directly into the game (unless it's completely online). However, unlike product placement in traditional media, IGA allows gamers to interact with the virtual product. For example, Splinter Cell has required the use of in-game Sony Ericsson
phones to catch terrorists. Unlike dynamic IGAs, static IGAs are not limited to a developer and publisher determined pre-programmed size or location and allow the advertiser to customize the advertisement display.
A number of games utilize billboard
-like advertisements or product placement to create a realistic gaming environment. For example, many sports games incorporate these advertisements to simulate the heavy advertising within professional sports. Similarly, many games employ brand-name products such as guns and cars as in-game status symbols. These brand references may not be advertisements and are instead placed in the game purely for plot or design reasons. However, trademark owners sometimes object to unlicensed references to their trademarks. See, e.g., E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc.
Dynamic advertising campaigns allow IGA to be part of a time-sensitive advertisement campaign because they do not need to be designed months or years before the game is finished. Dynamic advertisements can be purchased after a game is released to the general public are featured in a developer determined in-game location. For example, in October 2008, billboard advertisements were purchased in 10 swing states by then-US Democratic
Presidential
candidate Barack Obama
in numerous Xbox
games.
and free-to-play
games are typically playable online and provide a free basic game with options for players to purchase advanced features or additional items. They operate under the theory that a gamer will pay for additional in-game features after investing enough time in the game. In freemium games like Farmville
, these transactions are typically one-time payments for specific in-game goods (micro-transactions). Free-to-play games like Age of Conan instead try to induce players to enter into a pay-to-play relationship for premium content. While typically generating income though these other revenue sources, freemium and free-to-play games often feature advertisements as well via splash advertisements or advertiser sponsorships of virtual-good giveaways as additional income.
and Anarchy Online
both use dynamic IGA in an urban game setting to mimic real world stimuli. In contrast, fantasy games such as EverQuest II
and World of Warcraft
may not include IGA when real-world advertisements do not fit contextually. Blizzard
has previously remarked that it would not consider using IGA within World of Warcraft; conversely, SOE
experimented briefly with an in-game command-line function allowing players to order food delivery from Pizza Hut
in EverQuest II.
Virtual worlds
and MMORPGs
may host persistent online advertisements by allowing marketers to purchase virtual real estate. Aside from establishing a brand presence, companies can use it to test future real-world locations. For example, Starwood Hotels & Resorts Worldwide
established the aloft hotels within Second Life
prior to the completion of its real-world counterpart.
branched out into the IGA space by announcing a video games ratings service, GamePlay Metrics, to serve in-game advertisers and measure IGA effectiveness.
Several advertising agencies
or ad networks
specialize in IGA, and even more traditional advertising agencies have experimented with IGA. However, many advertisers do not embrace video games as a viable advertising medium because of the continuing difficulties in measuring IGA’s effectiveness despite the implementation of GamePlay Metrics, uncertainty about how many viewers the game will reach, and the long development cycle inherent in video games.
It is also difficult to plan in-game advertisements because game development
generally takes longer than the development and implementation of an advertising campaign; typically, most static advertisements must be disclosed to the developers at least eighteen months before a game is released. This timing discrepancy can be solved though use of dynamic advertisements, which are available for purchase at any time in-game space is available, but this choice constrains the advertisement to the in-game predetermined spaces and sizes and does not allow for highly integrated static ads.
profits have increased by an extra $1–2 per game unit sold (in addition to the typical $5–6 profit per unit). Some mobile phone games have replaced charging fees to gamers with IGA, and it is an important source of income for browser-based and other Internet games that do not feature micro-transactions or pay-to-play. Some publishers see IGA as a way to offset growing game development costs, while others believe IGA will allow them to experiment with gameplay by reducing the financial risks associated with game development.
However, not all publishers have found IGA successful. In 2008, Sony Corporation expressed doubts about advertisement-funded games because of limited advertiser dollars and gamers’ skepticism of IGA, although Sony completed an IGA deal 5 months later. However, in 2010, an Electronic Arts representative remarked, “We actually aren't getting much from ad revenue at all. The in-game advertisement business hasn't grown as fast as people expected it to.”
Another issue publishers and developers must deal with is integrating IGA into games without alienating or frustrating players. The general goal of IGA is to insert advertising that gets noticed while not interrupting the player's enjoyment of the game. Developers need some creative control of the IGA to ensure it fits the virtual setting, which can be an issue because advertisers usually want to project a certain image and protect their brand image. Game companies worry that they may be forced to change the game as requested by advertisers if IGA becomes a predominate revenue source, and face a possible backlash from consumers. In some games it may be easier to rely on revenue from sales of virtual goods, as they may provide a more reliable and greater stream of income than advertising while having the advantage of being directly incorporated into the game experience and being under the complete creative control of the developer.
Gamers may feel that IGA is invasive and in some cases have dubbed IGA-supported software as spyware
. Some gamers choose to remove advertisements from the game experience, either by paying more for an advertisement-free copy or disabling the advertisements through exploits
.
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
in computer and video games
Computer and video games
A video game is an electronic game that involves human interaction with a user interface to generate visual feedback on a video device. The word video in video game traditionally referred to a raster display device, but following popularization of the term "video game", it now implies any type of...
. IGA differs from advergaming
Advergaming
Advergaming is the practice of using video games to advertise a product, organization or viewpoint. The term "advergames" was coined in January 2000 by Anthony Giallourakis, and later mentioned by Wireds "Jargon Watch" column in 2001...
, which refers to a game specifically made to advertise a product.
The IGA industry is large and growing. In 2009, spending on IGA was estimated to reach $699 million USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
and is anticipated to grow to $1 billion by 2014.
The earliest known IGA was the 1978 computer game Adventureland, which inserted a self-promotional advertisement for its next game, Pirate Adventure. The earliest known commercial IGA occurred in 1991 when a spot for Penguin biscuits appeared in James Pond - RoboCod
James Pond 2
James Pond 2: Codename RoboCod, also known as Super James Pond, is a platform video game and sequel to James Pond. The game was developed by the same British video game developers as the original game...
.
IGA can be integrated into the game either through a display in the background, such as an in-game billboard or a commercial during the pause created when a game loads
Loading screen
A loading screen is a picture shown by a computer program, often a video game, while the program is loading or initializing.-Loading times:Loading screens that disguise the length of time that a program takes to load were common when computer games were loaded from cassette tape, a process which...
, or highly integrated within the game so that the advertised product is necessary to complete part of the game or is featured prominently within cutscenes
Cutscene
A cutscene is a sequence in a video game over which the player has no or only limited control, breaking up the gameplay and used to advance the plot, strengthen the main character's development, introduces enemy characters, and provide background information, atmosphere, dialogue, and clues...
. Due to the custom programming required, dynamic advertising is usually presented in the background; static advertisements can appear as either. One of the advantages of IGA over traditional advertisements is that consumers are less likely to multitask with other media while playing a game, however, some attention is still divided between the gameplay, controls, and the advertisement.
Static in-game advertising
Similar to product placementProduct placement
Product placement, or embedded marketing, is a form of advertisement, where branded goods or services are placed in a context usually devoid of ads, such as movies, music videos, the story line of television shows, or news programs. The product placement is often not disclosed at the time that the...
in the film industry, static IGAs cannot be changed after they are programmed directly into the game (unless it's completely online). However, unlike product placement in traditional media, IGA allows gamers to interact with the virtual product. For example, Splinter Cell has required the use of in-game Sony Ericsson
Sony Ericsson
Sony Ericsson Mobile Communications AB is a joint venture established on October 1, 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to manufacture mobile phones....
phones to catch terrorists. Unlike dynamic IGAs, static IGAs are not limited to a developer and publisher determined pre-programmed size or location and allow the advertiser to customize the advertisement display.
A number of games utilize billboard
Billboard
Billboard is a weekly American magazine devoted to the music industry, and is one of the oldest trade magazines in the world. It maintains several internationally recognized music charts that track the most popular songs and albums in various categories on a weekly basis...
-like advertisements or product placement to create a realistic gaming environment. For example, many sports games incorporate these advertisements to simulate the heavy advertising within professional sports. Similarly, many games employ brand-name products such as guns and cars as in-game status symbols. These brand references may not be advertisements and are instead placed in the game purely for plot or design reasons. However, trademark owners sometimes object to unlicensed references to their trademarks. See, e.g., E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc.
Dynamic in-game advertising
Increasing Internet connectivity and bandwidth has increased the use of dynamic IGA, which allows the game manufacturer or its advertisement vendor to deliver advertisements remotely, update advertisements after the game is launched, and target advertisements based on time or geography. This approach combines the customization of web banners with the functionality of traditional billboards and posters as most in-game advertisements do not link to a website outside the game. Dynamic IGAs allow the game manufacturer or its advertisement delivery service to track advertisements in real time and capture viewing data such as screen time, type of advertisement, and viewing angle. This information may be used to improve future advertisement campaigns and to correct copy problems or make a current advertisement more appealing to players.Dynamic advertising campaigns allow IGA to be part of a time-sensitive advertisement campaign because they do not need to be designed months or years before the game is finished. Dynamic advertisements can be purchased after a game is released to the general public are featured in a developer determined in-game location. For example, in October 2008, billboard advertisements were purchased in 10 swing states by then-US Democratic
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
Presidential
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
candidate Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
in numerous Xbox
Xbox
The Xbox is a sixth-generation video game console manufactured by Microsoft. It was released on November 15, 2001 in North America, February 22, 2002 in Japan, and March 14, 2002 in Australia and Europe and is the predecessor to the Xbox 360. It was Microsoft's first foray into the gaming console...
games.
Advertising in online-only games
Freemium and free-to-play
FreemiumFreemium
Freemium is a business model that works by offering a product or service free of charge while charging a premium for advanced features, functionality, or related products and services...
and free-to-play
Free-to-play
Free-to-play refers to any video game that has the option of allowing its players to play without paying. The model was first popularly used in early massively multiplayer online games targeted towards casual gamers, before finding wider adoption among games released by major video game...
games are typically playable online and provide a free basic game with options for players to purchase advanced features or additional items. They operate under the theory that a gamer will pay for additional in-game features after investing enough time in the game. In freemium games like Farmville
FarmVille
FarmVille is a farming simulation social network game developed by Zynga in 2009. It is similar to Happy Farm, Farm Town,, and older games such as the Harvest Moon series...
, these transactions are typically one-time payments for specific in-game goods (micro-transactions). Free-to-play games like Age of Conan instead try to induce players to enter into a pay-to-play relationship for premium content. While typically generating income though these other revenue sources, freemium and free-to-play games often feature advertisements as well via splash advertisements or advertiser sponsorships of virtual-good giveaways as additional income.
Pay-to-play
Pay-to-play games charge players to access the game content. Depending on the game environment, some pay-to-play games feature IGA. For example, City of HeroesCity of Heroes
City of Heroes is a massively multiplayer online role-playing game based on the superhero comic book genre, developed by Cryptic Studios and published by NCsoft. The game was launched in North America on April 27, 2004 and in Europe on February 4, 2005 with English, German and French language...
and Anarchy Online
Anarchy Online
Anarchy Online is a massively multiplayer online role-playing game published and developed by Funcom. Released in the summer of 2001, the game was first in the genre to include a science-fiction setting, dynamic quests, free trials, and in-game advertising. The most ground breaking feature in...
both use dynamic IGA in an urban game setting to mimic real world stimuli. In contrast, fantasy games such as EverQuest II
EverQuest II
EverQuest II is a 3D fantasy massively multiplayer online role-playing game developed by Sony Online Entertainment , based on EverQuest, and shipped on 8 November 2004...
and World of Warcraft
World of Warcraft
World of Warcraft is a massively multiplayer online role-playing game by Blizzard Entertainment. It is the fourth released game set in the fantasy Warcraft universe, which was first introduced by Warcraft: Orcs & Humans in 1994...
may not include IGA when real-world advertisements do not fit contextually. Blizzard
Blizzard Entertainment
Blizzard Entertainment, Inc. is an American video game developer and publisher founded on February 8, 1991 under the name Silicon & Synapse by three graduates of UCLA, Michael Morhaime, Allen Adham and Frank Pearce and currently owned by French company Activision Blizzard...
has previously remarked that it would not consider using IGA within World of Warcraft; conversely, SOE
Sony Online Entertainment
Sony Online Entertainment is a game development and game publishing division of Sony that is best known for creating massively multiplayer online games, including EverQuest, EverQuest II, The Matrix Online, PlanetSide, Star Wars Galaxies, Free Realms, and Vanguard: Saga of Heroes, DC Universe...
experimented briefly with an in-game command-line function allowing players to order food delivery from Pizza Hut
Pizza Hut
Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo wings, breadsticks, and garlic bread....
in EverQuest II.
Virtual worlds
Virtual world
A virtual world is an online community that takes the form of a computer-based simulated environment through which users can interact with one another and use and create objects. The term has become largely synonymous with interactive 3D virtual environments, where the users take the form of...
and MMORPGs
MMORPG
Massively multiplayer online role-playing game is a genre of role-playing video games in which a very large number of players interact with one another within a virtual game world....
may host persistent online advertisements by allowing marketers to purchase virtual real estate. Aside from establishing a brand presence, companies can use it to test future real-world locations. For example, Starwood Hotels & Resorts Worldwide
Starwood Hotels & Resorts Worldwide
Starwood Hotels and Resorts Worldwide, Inc. is a hospitality ownership and management organization, headquartered in White Plains, New York. One of the world's largest hotel companies, it owns, operates, franchises and manages hotels, resorts, spas, residences, and vacation ownership properties...
established the aloft hotels within Second Life
Second Life
Second Life is an online virtual world developed by Linden Lab. It was launched on June 23, 2003. A number of free client programs, or Viewers, enable Second Life users, called Residents, to interact with each other through avatars...
prior to the completion of its real-world counterpart.
Advertising industry reaction to IGA
The advertising industry has generally embraced IGA and advergaming as effective ways to reach 16 to 34-year-old males. IGA is seen as an important means of gaining access to a generation of young males who use gaming as their relaxation activity instead of watching television. Advertisers may also appreciate IGA’s economic returns; a 2010 Nielsen Company study showed that IGA had a return on investment of $3.11 per dollar spent. In 2007, Nielsen Media ResearchNielsen Media Research
Nielsen Media Research is an American firm that measures media audiences, including television, radio, theatre films and newspapers...
branched out into the IGA space by announcing a video games ratings service, GamePlay Metrics, to serve in-game advertisers and measure IGA effectiveness.
Several advertising agencies
Advertising agency
An advertising agency or ad agency is a service business dedicated to creating, planning and handling advertising for its clients. An ad agency is independent from the client and provides an outside point of view to the effort of selling the client's products or services...
or ad networks
Advertising network
An online advertising network or ad network is a company that connects advertisers to web sites that want to host advertisements. The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand...
specialize in IGA, and even more traditional advertising agencies have experimented with IGA. However, many advertisers do not embrace video games as a viable advertising medium because of the continuing difficulties in measuring IGA’s effectiveness despite the implementation of GamePlay Metrics, uncertainty about how many viewers the game will reach, and the long development cycle inherent in video games.
Reducing advertiser risk
Viewer numbers are hard to estimate because it is difficult to gauge the popularity of a game before its release; however, advertiser risk can be partially mitigated through benchmark-based advertisement payments on game units sold or a refund agreement if a certain number of game sales are not reached. This may not, however, protect the advertiser from an unwanted association with a poorly performing game or advertisement.It is also difficult to plan in-game advertisements because game development
Game development
Game development is the software development process by which a video game is developed. Development is undertaken by a game developer, which may range from a single person to a large business. Mainstream games are normally funded by a publisher and take several years to develop. Indie games can...
generally takes longer than the development and implementation of an advertising campaign; typically, most static advertisements must be disclosed to the developers at least eighteen months before a game is released. This timing discrepancy can be solved though use of dynamic advertisements, which are available for purchase at any time in-game space is available, but this choice constrains the advertisement to the in-game predetermined spaces and sizes and does not allow for highly integrated static ads.
Game industry reaction
Game publishers have mixed feelings about IGA. IGA can create new revenue streams; in some cases publishers’Video game publisher
A video game publisher is a company that publishes video games that they have either developed internally or have had developed by a video game developer....
profits have increased by an extra $1–2 per game unit sold (in addition to the typical $5–6 profit per unit). Some mobile phone games have replaced charging fees to gamers with IGA, and it is an important source of income for browser-based and other Internet games that do not feature micro-transactions or pay-to-play. Some publishers see IGA as a way to offset growing game development costs, while others believe IGA will allow them to experiment with gameplay by reducing the financial risks associated with game development.
However, not all publishers have found IGA successful. In 2008, Sony Corporation expressed doubts about advertisement-funded games because of limited advertiser dollars and gamers’ skepticism of IGA, although Sony completed an IGA deal 5 months later. However, in 2010, an Electronic Arts representative remarked, “We actually aren't getting much from ad revenue at all. The in-game advertisement business hasn't grown as fast as people expected it to.”
Another issue publishers and developers must deal with is integrating IGA into games without alienating or frustrating players. The general goal of IGA is to insert advertising that gets noticed while not interrupting the player's enjoyment of the game. Developers need some creative control of the IGA to ensure it fits the virtual setting, which can be an issue because advertisers usually want to project a certain image and protect their brand image. Game companies worry that they may be forced to change the game as requested by advertisers if IGA becomes a predominate revenue source, and face a possible backlash from consumers. In some games it may be easier to rely on revenue from sales of virtual goods, as they may provide a more reliable and greater stream of income than advertising while having the advantage of being directly incorporated into the game experience and being under the complete creative control of the developer.
Gamer reaction
Gamer reaction to IGA has also been mixed. A 2009 study by an advertising company found that 80% of consumers correctly recalled an advertiser and 56% had a more favorable impression of the advertiser because it allowed them to play a free game. However, companies have found that gamers do not want distracting advertisements when they have already paid the retail price and/or a monthly subscription fee. Gamers have shown a distaste for advertisements that distract them while they are trying to enjoy themselves. A small, 100 participant, 2010 study suggested that gamers may be more likely to favorably respond to advertisements and products which are congruent with the game environment.Gamers may feel that IGA is invasive and in some cases have dubbed IGA-supported software as spyware
Spyware
Spyware is a type of malware that can be installed on computers, and which collects small pieces of information about users without their knowledge. The presence of spyware is typically hidden from the user, and can be difficult to detect. Typically, spyware is secretly installed on the user's...
. Some gamers choose to remove advertisements from the game experience, either by paying more for an advertisement-free copy or disabling the advertisements through exploits
Exploit (online gaming)
An exploit, in video games, is the use of a bug or design flaw by a player to their advantage in a manner not intended by the game's designers. It is often colloquially abbreviated sploit. Exploits have been classified as a form of cheating; however, the precise determination of what is or is not...
.