Interactive

When discussing advertising within videogames, we must first identify two distinct segments: In-Game ads (essentially product placement within a game) and Advergames (branded entertainment – the game IS the ad). Some of the next generation in-game ads are actually dynamically served up while users are connected to online game networks like Xbox Live – meaning new ads can be served up in games (a whole new media network!).

The reasons behind the movement towards this type of advertising are quite simple. A combination of dwindling returns on more traditional advertising venues and the swelling of the video-game playing market have opened the door for marketers. According to a 2004 report released by the Yankee Group, the 108 million US gamers 13 years and older in 2003 will swell to over 126 million by 2008. That same report estimates the size of the video game industry to grow from $7.4 billion in 2003 to over $8.3 billion by 2008.

A new study release from Nielsen Entertainment finds that ads in video games can have a major influence on whether people buy products and recommend them to friends. The study, which included over 1,300 male gamers aged 13-44, found that when ads are relevant to the game they could remain on screen longer, resulting in an elevated rate of brand awareness. Players questioned approximately 20 minutes after playing the game also indicated they would be highly likely to recommend an advertised product to a friend.