In-Game Advertising Poised for Explosive Growth

bart_scriv writes "A new study from Yankee Group predicts a fivefold increase in the in-game advertising market over the next four years. The market, which grew from $34 million in 2004 to $56 million in 2005, is expected to reach $732 million by 2010. Although in-game advertising is currently controlled by a small number of independent networks (IGA, Massive, etc.), the study suggests that the larger game companies will eventually dominate the market by bringing ad serving in-house."

Comments

So how would an in-game ad-blocker work?

[Paul Bristow]

Inquiring minds want to know!

Which is it?

[cpirate]

So which is it 732 million or 2 billion?

http://games.slashdot.org/article.pl?sid=06/04/14/ 1510238

I can see it now....

[Ugly American]

"This headshot brought to you by Barrett Rifles."

So who actually thinks this is a good idea?

[JWallyR]

I'm too lazy to look up and link, but I'm sure lots of other regulars around here have read about the horrible failures of most modern advertising to really do anything other than annoy and frustrate the "target audience". I'm not a big fan of the GTA series, but I've been around people who were, and listening to the parodies of actual radio advertisement and seeing the parodies of billboards was a clever and fun way to make the game world more interesting. On the other hand, basically every "real world" advertisement put into a game is hideously overdone. I remember somebody commenting on the spammed billboards for some company or other in a recent racing game, and the "dnL" vs 7up thing is just ridiculous.

The way that things look to me is that two things will end up happening:

1. The only advertisement that will really continue to flourish are the sorts of things that make it to the Super Bowl commercials, which is to say that they'll actually be entertaining.

2. "Advertising" as an industry will basically keel over and die, because products will eventually reach a point at which they will stand or fall on their own merits. The internet means that the exchange of information is certainly possible; all that remains is for people to realize that 99% of advertisement has nothing to do with the product and everything to do with making as much noise to get as much attention (negative OR positive) as possible.

I really don't care about the advertising industry; I'm not the sort to know or care what's in fashion, I just buy what I want (or need) and any advertisement aimed at me beyond the introduction of new products is doomed to failure.

Re:So who actually thinks this is a good idea?

[MobileTatsu-NJG]

" I'm not a big fan of the GTA series, but I've been around people who were, and listening to the parodies of actual radio advertisement and seeing the parodies of billboards was a clever and fun way to make the game world more interesting. "

Funny you should mention that because one of the most lauded features of Vice City was the use of real songs in the sound track. One of the other laudable features was just how similar to the cities they were portraying the levels were. GTA is one of those games that I think would have benefitted from in-game advertising. Just another step closer to being in the game. Then again, I'm talking about the soda machines advertising Sprite, not CJ stopping to pump up his Reebok shoes.

"1. The only advertisement that will really continue to flourish are the sorts of things that make it to the Super Bowl commercials, which is to say that they'll actually be entertaining."

This is a diverse market. One has to be careful about using the word 'only' when making generalizations like this. It's difficult to picture something like Google's text ads going anywhere any-time soon for the simple reason that they're relevent and the message is short and clear.

"2. "Advertising" as an industry will basically keel over and die, because products will eventually reach a point at which they will stand or fall on their own merits. The internet means that the exchange of information is certainly possible; all that remains is for people to realize that 99% of advertisement has nothing to do with the product and everything to do with making as much noise to get as much attention (negative OR positive) as possible."

VERY unlikely. Sure, you can go looking for stuff on the internet. Sure, you can go find it and read reviews. Fine, great, perfect. The problem is that there is SO MUCH STUFF to go out and buy that there will ALWAYS be a market for advertising. All an advertisement has to do is make you aware that a product exists. That's it. The work is done. When it's time for you to solve a problem that a particular product can solve, you'll remember it and look it up. This will not go away.

"I just buy what I want (or need) and any advertisement aimed at me beyond the introduction of new products is doomed to failure."

I find that rather unlikely. It is inevitable that you are going to find yourself with a problem that a commercial product can solve. Maybe it's a clogged drain. Maybe it's a new video card. Maybe it's dinner time. You're going to call up a list of solutions, and gee golly gosh, an advertised product is going to pop into your mind. Sure you'll do your omework on it. Sure you'll read 'honest' reviews. Sure you'll search for the best deal, as opposed to buying it at Circuit City where it was advertised. Doesn't matter. Advertising still made you aware of it.

Advertising isn't going anywhere. As long as there are products to sell, there'll be advertisements backing them up. The mode of advertisement might change (i.e. pop-ups, pop-unders, pop-reacharounds...), but the industry isn't doomed to death.

In other news, I'm going to put on my Nostradamus hat and predict that with the explosion in blogging lately, we'll see more companies offering referall rewards to people who write reviews of their products. I also see the demise of that system happening a year or two later.

Re:So who actually thinks this is a good idea?

[Oldsmobile]

2. "Advertising" as an industry will basically keel over and die, because products will eventually reach a point at which they will stand or fall on their own merits. The internet means that the exchange of information is certainly possible; all that remains is for people to realize that 99% of advertisement has nothing to do with the product and everything to do with making as much noise to get as much attention (negative OR positive) as possible.

This I think is an interesting point, as there is a Spanish clothing retailer called Zara that is a huge success story and is continuing to grow and make tons of money. The interesting part? Zara has never run an ad-campaign!

So is advertising dead? Perhaps not completely, we still need people to design and manage brands, those brands probably won't lean on traditional advertising as much tho. Last bit was just my uninformed opinion.

More realistic

[cl191]

I actually like seeing real life ads in games, games like SWAT4 with real movie posters or real coke machine makes it much more realistic IMO. But then of course it will get annoying if it's too intrusive, like flyers/posters everywhere on the wall and floor. On another note, I found it interesting that in SWAT4, most of the computers in the game are destructible, while the one with ads on the screen are indestructible.

if game makers make money on advertising...

[masterpenguin]

Whats the chance that they'll make more money on the advertising and just give the game away. I think this would be a great method of product placement. Worked great when the US Armed Services gave away 'america's army'. They could also update the ads either on a regular basis over the internet, or through patchs.

Heck, why not include some form of google ad sence that ties in with your brousing and PRESTO your new faverate video game not only sells you products but products specificly marketed to you.

Although I wouldn't play a game like this for free, people will soon be PAYING to be sold advertisements. Like when you sit and watch the newest pop film in the theater.

So what about non-modern games?

[AndyTheSayer]

It'd be interesting to see them try to sneak an ad for Coca-Cola or whatever into something like Oblivion. ;) I don't see how they could advertise many products in a fantasy setting. It'd ruin the immersion. Unless they have Ye Olde Coca-Cola ale for sale in a tavern or something... But even then, someone would doubtless quickly mod the game to replace it with something non fourth-wall breaking.

Insiders view

[korpique]

It's really nice to be able to support a user base of millions very few of whom ever choose to put any money into the game. At least in our platform, however, the advertisers have to be hand-picked to fit our "world", and the advertisement method and material have to be tailored by hand. It's hard to see what the role of a mediator would be in this kind of setting. Maybe consultant, but probably only before our platform is chosen as the channel.

Wait and see

[caffeination]

We're all talking about it as if it'll definitely remain in the same form as it's in now: ads merged into the environment in the form of textures.

I think "explosive growth" means logos and adverts during loading times and the like. If there's one thing we can count on, it's corporate greed.

No kidding.

[PhrostyMcByte]

I hope this "explosive growth" will be tasteful.

I don't mind seeing a Burger King sign in a racing game if it's in a place you'd usually see them like on a highway.
I don't want to come across a bard in the next Neverwinter Nights telling me how he got his iPod accessories at his local Best Buy.

So....

[jasen666]

Since the game will now generate ad revunue, that means they can sell them a little cheaper right?

*cue game company execs staring idly at the ceiling tiles

er, pay the hardworking programmers and developers a bit more?

*more tile counting

Oh, line executive coffers and retirment plans?

*CEO and CFO highfive

Ads in games

[ofcourseyouare]

The advertising industry in a state of panicked paralysis. Lots of smart guys who've had a great ride for 30 years are terrified that it's going to end. Product placement, whether on TV, in films or in ads, is one solution they cling to, like Leo di Caprio clutching that bit of wood at the end of Titanic. Didn't do him much good, and it won't do them much good either...

Key issues include:
* does the user pay for the content? If not, as on TV, and users perceive that they are getting good content for nothing because it;s paid for by ads, then users will put up with it, as on TV; they may skip the ads, but they don't necessarily complain about it too much.
* is the user getting the content for less because of the ad? Again, if so, then users will put up with it - and a lot of the slashdot posts reflect this.
* does the ad make the content more real? e.g. ads on the side of football pitches; don't think many people would object.


* BUT - if the user IS paying for the contect, and its price is not coming down because of the the ad, and it's not adding to the realism of the content - then you have a situation where users will start increasingly to rebel at being forced to watch ads, and cease buying products because of them.
* another poster wisely commented that corproate greed will win - but not necessarily in the ad's favour. As I recall, someone from EA (I think in an IV in Edge magazine) pointed out that their revenue from ads is under 2% of their total revenue. They are not going to risk failing to sell Halo X for $XXX because they want to squeeze in a couple of ads which will generate a tiny amount of extra revenue.
* Stories about product placement's huge future are generally fuelled by people in the ad industry who need it, to save their industry. That does not mean it's going to happen.

Advertising = Bad Thing

[MaWeiTao]

These companies want advertising in games to make extra money above and beyond what they make now. There's no way in hell they're going to lower prices because they've crammed a game full of ads. If they did that they might as well not have advertising in the game at all.

The last time I checked cable and satellite television is getting more expensive despite more advertising than ever before. The same goes for movies, which have absurd amounts of product placement despite ever increasing ticket cost.

These companies don't care about preserving immersion, they care about making a few extra bucks. GTA Vice City took place in the 80s, San Andreas took place in the 90s. If they put in real ads rest assured they wouldn't be advertising from each game's respective time period. We'd see big flaming ads for Dell XPS computers, Subway sandwiches, bad ringtones, some new SUV and lord knows what else. And then the best part is when they throw these ads in a player's face and force them to watch it. We'll have a game with completely destructable environments except for advertisements. And entire town will be obliterated but all the billboards will be pristine.

And for every one creative, well-designed ad there are 10,000 awful ones. This entire venture is about making money. These jerks aren't going to spend on anything if they don't need to which means we're going to see low quality garbage everywhere. Look for high quality advertising in the style of lowermybill.com.

I never liked advertising and I never will.

Fantasy games

[Lord_Dweomer]

While ads certainly have their place in games like GTA, The Matrix Online, even CoH...I have to say I am DYING to see what attempts will be made to breach the ad market with fantasy games. Because honestly there is no clean, natural and non-disruptive way to do so without completely borking the setting.

Of course what that means is we will start seeing less ads in the actual game world, and more ads in the interface, similar to the whole "ordering pizza through the command line" deal. Or possibly showing spots during zone loads. Of course then you have angry players who would rightly be suspicious that their uberfast connection and computer should load the zone quicker and that they are delaying the zone loading process just to show ads.

And lets face it...since the most popular (for the moment) game online is WoW...you KNOW someone will attempt it. Whether Blizzard will bite or not is another question. Would you object to seeing a food vendor selling chicken suspiciously labeled "K'ntuckee Fried Chicken"? I actually think that is one option advertisers have...parodying their brands. People can easily make the connection and see the joke, it would definitely be fitting in the setting...AND people would still make the same connection to the brand, and perhaps even appreciate that they didn't try to make a hugely flashing ad that completely broke the theme of the game world.

You have found...

[TylerChambers]

the Mountain Dew Broadsword of Uleharm. Bonus +5 to stamina, 10% chance to cast Berzerker Rage on self during melee combat. Do the Dew!

Sometimes Advertising Works Well in Games!!!

[Swimmin' Pants]

Pikmin 2 is full of in-game advertising, and it actually kind of adds to the game's narrative. Modern-day Earth products are lying around everywhere, implying that the game takes place on a post-apocalyptic Earth, after the entire human race got so fed up with ubiquitous advertisements that it killed itself just to get away from it all.