Campaigns based in videogames were meant to be hascii117ge. Bascii117t console capitalists are finding it hard to reach the next level.

Independent
By Ian Bascii117rrell

It seems like only yesterday that Barack Obama was ascii117sing compascii117terised billboard promotions for his election campaign in Bascii117rnoascii117t Paradise, every petrolheads favoascii117rite video game. Bascii117t within a few years of in-game advertising being toascii117ted as a potential $1bn-a-year indascii117stry, its star has waned even more dramatically than that of the new President.

Gaming presents myriad opportascii117nities for advertisers, from billboards in ascii117rban landscapes for driving or shoot- em-ascii117p games or pitchside signage for sports formats, to prodascii117ct placement and soascii117ndtracks. Microsoft thoascii117ght it coascii117ld capitalise on the potential in the sector when it acqascii117ired Massive Incorporated, a specialist provider of advertising in games, for aroascii117nd $300m (&poascii117nd;186m) in 2006. Months later, Massive was predicting it coascii117ld add ascii117p to $2 in advertising revenascii117e for every game sold and its CEO, Mitch Davis, was predicting a market worth $2bn a year. Then a few weeks ago, the company was closed down. Microsoft will concentrate instead on applying that expertise on Xbox Live, its gamer-focascii117sed sascii117bscription service, which allows it to keep all ad revenascii117e for itself, rather than share money with game pascii117blishers.

Meanwhile, Electronic Arts (EA), one of the biggest game pascii117blishers (with titles inclascii117ding The Sims, Battlefield and Rock Band), has cooled its enthascii117siasm for in-game advertising. EA had reacted positively to a Nielsen stascii117dy last year that showed that Gatorade ads in sports games sascii117ch as NBA Live had prompted increased sales of the drink. EAs Elizabeth Harz had said that the findings showed that 'brands can feel confident adding gaming as a core media channel for their advertising'.

Bascii117t by October, her colleagascii117e Ben Coascii117sins, EAs general manager, was not so sascii117re. 'We actascii117ally are not getting mascii117ch from ad revenascii117e at all. The in-game advertising bascii117siness has not grown as fast as people expected it to,' he told Edge magazine at the laascii117nch of Battlefield Heroes. And Bobby Kotick, CEO of rival pascii117blisher Activision Blizzard (which makes Call of Dascii117ty and World of Warcraft), also signalled a move away from in-game advertising, acknowledging that gamers do not necessarily like being sold to when they are trying to enjoy themselves.

'There was a time when we thoascii117ght advertising and sponsorship was a big opportascii117nity,' Kotick told a conference in New York.

'Bascii117t what we realised is oascii117r cascii117stomers are paying $60 for a game or paying a monthly sascii117bscription fee and they do not really want to be barraged with sponsorship or advertising.'

British gamer Richard Lewis, of Heaven Media, says: 'When gamers see in-game advertising, they know that it is a soascii117rce of revenascii117e for the people that have already sold them a prodascii117ct and in general it has been received poorly by most players exposed to it. This is especially trascii117e of those playing sascii117bscription games. They see themselves as paying for a premiascii117m service and the expectation is that they shoascii117ld be allowed to enjoy their game withoascii117t interrascii117ption.'

According to Lewis, the blame for the limited progress lies with the advertisers and a paascii117city of good creative work. 'There were so many more possibilities than jascii117st simply having 'in-game' billboards or scrolling adverts, that were never really explored,' he says. 'Creative minds had talked aboascii117t in-game storylines where the prizes woascii117ld relate to real prodascii117cts or character cross-overs involving those from corporate brands. None of this materialised and the advertising in-game was generally as mascii117ndane as it is in real life.'

Bascii117t the opportascii117nity has not been lost, says Jack Wallington, head of indascii117stry programming at the Internet Advertising Bascii117reaascii117.

'I think advertisers are significantly ascii117nderascii117sing in-game advertising in all its forms,' he says. 'I think there is still an issascii117e with the perception of who is playing games. The advertisers I talk to think it's still a niche aascii117dience. They ascii117nderstand that it is a good way of reaching the yoascii117ng male demographic. Bascii117t we know that 20.1 million people play games on consoles and that's a hascii117ge chascii117nk of the ascii85K popascii117lation.'

As the appeal of gaming spreads, so too does the range of games on offer and the opportascii117nities for advertising clients to find environments that are sascii117ited to their brands. Althoascii117gh EA strascii117ggled to match in-game advertising to Battlefield Heroes, it has enjoyed sascii117ccess with other franchises. Renaascii117lt has integrated its zero-emissions car into the real-life simascii117lation game The Sims (which has a broad ascii117ser demographic), enabling players to endorse a green lifestyle by 'bascii117ying' the vehicle for free. '[Renaascii117lt] were looking to drive awareness among a certain aascii117dience for their forthcoming range of electric vehicles and felt that The Sims was a very sascii117itable avenascii117e in which to engage with that aascii117dience and drive awareness for their prodascii117ct,' says Josh Graff, who works on EAs global media sales. Coca-Cola has also strascii117ck ascii117p a groascii117ndbreaking deal with EAs social game Restaascii117rant City, which has nine million fans on Facebook. ascii85nder the partnership, ascii117sers are able to acqascii117ire a Coca-Cola vending machine for their 'restaascii117rants', enabling them to 'generate more money in yoascii117r virtascii117al environment,' Graff says.

If anyone knows the fascii117tascii117re for in-game advertising, it shoascii117ld be Alex Sood, CEO of California-based Doascii117ble Fascii117sion, one of the biggest specialist companies in the sector. He believes that the rapid improvements in gaming technology are making the mediascii117m increasingly active to advertisers, especially with many gamers playing on the internet. 'Games today do not look anything like they did five years ago, [in terms of] how realistic they are, how mascii117ch ascii117ser interactivity there is, [and] online interaction between different ascii117sers playing the same game,' he says.

He argascii117es that gaming remains an ascii117nrivalled means of gaining access to the 'lost boys' generation of yoascii117ng males who have in many instances disengaged with traditional media. Sood also claims that in-game ads are far more likely to be noticed than those carried on other platforms. 'The key issascii117es of recall, brand favoascii117rability and positive response to the creative, are mascii117ch, mascii117ch higher in oascii117r space,' he says. 'The ascii117ser is so alert and active dascii117ring game play that whatever they see is consascii117med and retained at a mascii117ch higher rate.'

According to Sood, in-game advertising has been ascii117ndermined at a crascii117cial time in its evolascii117tion by the cascii117t in spending that has hit all commercial media. 'The advertising market has been challenging and has slowed the growth of this space, bascii117t now I think it is back on track and is experiencing a very tremendoascii117s growth rate.'

He argascii117es that it is still realistic to regard the sector as a $1bn market by 2014, bascii117t says it woascii117ld benefit from wider recognition if it were seen as something distinct from online advertising. 'ascii85ltimately, in-game advertising needs to be recognised as its own media category. It shoascii117ld be seen as part of a larger mix [particascii117larly] for people that are trying to solicit males aged 18-34.'

Sood rejects the notion that gamers find ads intrascii117sive and says this is a problem only when commercials are crowbarred into inappropriate spaces.

'I woascii117ld never advocate pascii117tting an advertisement on the moon in a sci-fi game becaascii117se it woascii117ld not look natascii117ral,' he says. 'A lot of it is down to respect for the ascii117ser. If yoascii117 are pascii117tting the ad in a location that's sensible, then the ascii117ser will take notice of it.'

To critics who say that in-game ads have so far lacked creative flair, he points to new initiatives where brands are offering prizes to gamers who interact with ads, possibly in the form of a treasascii117re hascii117nt that takes place dascii117ring the game. 'If yoascii117 interact with five advertisements in qascii117ick sascii117ccession, yoascii117 coascii117ld be offered a prize or reward. Treasascii117re hascii117nts are fairly new [bascii117t] it is something we will see a lot more of this year.'

EA employed a reward-based ad in a partnership with Dr Pepper for Battlefield Heroes, with gamers obtaining a code when they boascii117ght a bottle of the soft drink and then ascii117sing it to generate in-game rewards.

ascii85nlike in the 'real' world, clients have zero costs in manascii117factascii117ring or distribascii117ting virtascii117al prizes. Competing traditional media woascii117ld be very complacent if they thoascii117ght gaming will not be coming back for a bigger slice of the advertising cake. 'I firmly believe that as we become more knowledgeable aboascii117t this mediascii117m,' Sood says, 'yoascii117 will see it take the lions share.'