NEW YORK -- Video games continue to fast emerge as a new advertising platform and their prevalence will only grow in coming years, gaming executives said here Wednesday at the Forrester Research Consumer Forum.
"Video games are poised to become the next big ad medium," said Katherine Hays, chief operating officer of Massive Inc., which provides in-game advertising.
Hays projected $2.5 billion in video game advertising revenue by the year 2010 and noted that ads placed by Massive average $2.04 per unit sold.
Paul Jackson, principal analyst for Forrester said males aged 12-17 are an easy target. He said 55% of those who go online regularly would rather play video games than watch TV, according to studies.
David Fleck, vp of marketing for game programr Linden Lab, detailed some advertising experiences from his company's "Second Life," a user-created virtual 125-square mile reality world with 55,000 users who interact socially and buy and sell products at the rate of $2 million per month.
Fleck displayed "Second Life," which features "avatars" that take the form of people or animals. The avatars can move throughout the virtual world contacting others and participating in an endless amount of activities.
"There is a place for anybody to participate," said Fleck, "including big corporations."
Currently, Second Life has a program developed by Wells Fargo called Stagecoach Island, which features Wells Fargo ATM machines that give out "Linden Dollars" that can be used to buy products in "Second Life." The goal is to promote fiscal responsibility among people aged 18 to 24.
Fleck said he is currently in discussions with other brands about advertising in Second Life and is hopeful that additional deals could be reached by year's end. He mentioned he would even be open to the idea of using avatars as advertisements.
Meanwhile, Hays once again rejected the notion that commercial messages would interfere with the gaming experience. "For the gamer, advertising actually adds to the realism," she said. "They respond positively."
She used the example of the game "Splinter Cell: Chaos Theory," which features a vending machine emblazoned with the Sprite logo. She said that 80% of gamers surveyed responded favorably to these types of ads.
Furthermore, she said there was usually a 15 second impression time and 30%-40% brand recall for ads that appear on billboards, vending machines, cars or skateboards in video games.
"Part of the reason for these numbers is that the audience is actively engaged with the ads," she said.
By Alex Woodson
September 29, 2005
The Hollywood Reporter
