As young eyeballs vanish from television, marketers put on their game face
According to analysts at the Yankee Group, marketers spent $117 million last year on "advergaming" — a term that describes the integration of advertisements with online and console video games — and that figure is expected to jump to $874 million by 2009. That's small potatoes compared with the $3.5 billion that marketers are estimated to have spent on all product placement last year, but advergaming dollars reach a highly targeted market.
Gaming is still associated most strongly with first-person shooters and fantasy role-playing. But savvy marketers — spurred by a rapid rise in the amount of time the average U.S. teen devotes daily to online or console video games — are quickly adapting the most unlikely of products to what has become the most popular form of interactive activity.
Meanwhile, TV viewership among teens and twentysomethings also fell nearly 3% from 1999-2004, according to Nielsen Media Research. That drop is attributed largely to a shift in attention by those demographics: The average U.S. teen spent 12 hours a week gaming during that span but only nine hours a week watching television.
"It's becoming harder and harder to reach consumers through usual media," Yankee Group analyst Michael Goodman says. "You need to go where the audience is."
In the realm of online games, Kotex maxi-pad/tampon maker Kimberly-Clark recently created "Closet Chaos," which offers free personal advice to preteen girls, and in June, male-deodorant manufacturer Axe and game publisher WildTangent launched "Mojo Master" — the goal of which is to "conquer" 100 virtual babes. Among console games, Electronic Arts' "NASCAR 2005: Chase for the Cup" features a Mr. Clean-logoed pit crew, while the hero of Ubisoft's "Tom Clancy's Splinter Cell: Chaos Theory" confronts a Coke machine, among other obstacles, while attempting to save the world.
It's a win-win situation for marketers and game developers, industry watchers believe, because in-game advertising will grow in amount and relevance once upcoming consoles such as Xbox 360 and PlayStation 3 can link to the Internet. At that point, dynamic ads can change every day to hawk movies and promotions.
Game publishers could use such a cash infusion because development costs jump by about 50% during each industrywide console upgrade, according to the Yankee Group. The average game title costs $5 million-$15 million to develop during the current console cycle, but Goodman says those numbers will jump to $7.5 million- $22.5 million for PlayStation 3 and Xbox 360.
The rub, though, is that players who pay as much as $60 for a game are not interested in traditional ads, pop-ups or overt product placement. In response, the industry is working to incorporate ads into game action.
"Gamers don't like fake advertising; they like real ads," says Mitch Davis, CEO of online-gaming network Massive. "If it's a racing game or a cityscape, you expect to see billboards or posters."
On the flip side, advertisers want more than billboards — so Massive is experimenting with video to accommodate them. One of the network's games, Funcom's "Anarchy Online," features a character who walks up to a Panasonic billboard; if the character stays in place, then a 15-second ad plays on the billboard.
That type of placement works, says Davis, because it does not interrupt game action. "You can't do interstitials or pop-ups or anything," he says. "That interferes too much with game play."
September 27, 2005
The Hollywood Reporter
