Ad recall for in-game ads at 56% :Initiative study

Cross-media comparisons of in-game ads, reveal ad recall for in-game ads at 56%, versus TV at 32%, or online and print at 17% and 18% respectively – Hall & Partners Research for all massive in-game campaigns .This is the key finding from ‘In-Game Advertising’ a report by media, marketing and digital company Initiative, on the rise of this important digital platform. “In-Game Advertising” highlights the phenomenal growth of video games and the huge market for in-game advertising this has created.

Commenting on this emerging phenomenon, Mr. N.P. Sathyamurthy, CEO, Karishma Initiative, said, “This is the next generation of advertising that we should be looking forward to. Its impact as we can see from the study is already proven. We will move towards incorporating the same into our media recommendations as may be necessary. ”
In-game advertising

Video games are no longer the preserve of geeks and hardcore enthusiasts. Gaming is now a huge global entertainment phenomenon and presents a great opportunity for advertisers. In-game advertising – essentially the practice of serving ads into a game’s virtual environment – is an effective and relevant way to reach audiences that spend an increasing amount of time with games. In-game ads can be targeted based on location, demographics, or time. They are effective at increasing awareness and purchase intent. In the future, there will be direct response mechanisms built into the formats, and the level of integration will become even deeper.

Put simply, in-game advertising is serving ads into a game environment, but the nuances vary dramatically. For some 3D games, in-game ads appear as posters or billboards in the virtual world. For online 2D casual games, in-game ads can replace an object in the game with a branded product, or even serve a branded quest into the game for a week long run.

In-game ads can be “static” or “dynamic.” Static in-game ads are baked into the retail version of the game, such that every player will be exposed to the ads throughout the existence of the game. Static ads can be delivered to offline gamers, and the level of integration exceeds dynamic ads. However, the static format is not generally recommended – except for simple product placement – as it involves a complicated and costly buying process which is unable to meet specific deadlines and there is also a lack of measurement.

When people in the industry refer to “in-game advertising” today, they are usually talking about “dynamic” in-game advertising. Dynamic in-game ads can be served-in on the fly to predetermined inventory positioned in the game environment.

That inventory can be as simple as a billboard in a sports stadium or as complex as a plot hook leading to a branded quest. Depending on the party serving the ads, dynamic in-game ads can be targeted based on user demographics, geo-targeted, and day-parted. Impressions can be measured and reported. Unfortunately, dynamic ads require the game to be played online to work. This issue becomes marginalized as consoles become increasingly connected and distribution skews toward digital distribution and downloadable content. For casual and social games, there is substantial opportunity for in-game advertising due to the inherent connectedness of the platforms. However, the space overall is still fragmented, so while some properties have in-game ad solutions, not all casual games offer this. For details look to pg 2 & 3 of the report.

The global gaming phenomenon

Video gaming is a massive industry. In 2009, the industry posted worldwide revenues of $57bn according to DFC Intelligence. The industry is divided into two broad groups: casual and core. Casual games are easy for a new gamer to pick up and play. They are usually on the PC, although they are also available for mobile phones, handheld devices, and Nintendo’s Wii. Core games – the more traditional types of games with steep learning curves and complex gameplay – are on both the PC and consoles, though the market share between the two depends on geography. For more details look to pg 3 of the report, section titled, The Global Gaming Phenomenon.

The benefits of in-game advertising

There are substantial benefits to be gained by a presence in-game, including awareness and purchase consideration lifts, but the core argument to be made in favor of in-game advertising is that of attention shift. As video games take on an increasing role in consumers’ lives, brands that engage in the medium become increasingly relevant. Additionally, as the space is still evolving, it hasn’t yet become overrun by advertising. Increased relevancy and greater share of voice should be very attractive to brands.

When considering in-game advertising for a given market, figuring out the specific behavior and demographics is clearly crucial. Also, it is important to bear in mind that in-game advertising capabilities don’t always extend across geographies for a given platform.

Social games present a very exciting opportunity for marketers. Traditionally, gaming has been treated as a silo in media plans, but this is changing. Now, a mobile or search call-to-action can drive activity to other media channels, and content or messaging can unify in-game elements and separate platforms. Because most social games utilize Facebook as a core platform, they are adjacent to one of the major touch-points in many social media campaigns. The social gaming market is still quite nascent, but it can be expected to evolve quickly to allow for ad formats that bridge in-game units with Facebook fan pages and social content, delivering true cross-media integrations. For more details look to pg 4 of the report, section titled, The benefits of in-game advertising

In-game advertising delivers breakthrough results

In-game ads are effective at increasing brand awareness and purchase intent, and especially effective at priming audiences for engagements and sponsorships within associated gaming environments. Consumer sentiment regarding in-game ads depends on how naturally they fit within a game environment. Microsoft’s Massive, an in-game ad serving company for the PC and Xbox 360, has regularly performed research with Interpret around their in-game ad services. Across over 85 studies from 2006, the performance of in-game ads has been found to increase purchase intent by 24%, brand recommendation by 23%, and overall brand rating by 32%.

Joint research led by Initiative and Microsoft has found interesting comparisons between Xbox LIVE dashboard ads and TV. The research found that while TV spots have fixed lengths of 30 or 60 seconds, interaction with the Xbox LIVE dashboard ads nears or exceeds 300 seconds. This has obvious benefits. For one brand, unaided recall for the Xbox LIVE dashboard ad was 90%, whereas recall for the TV ad was only 78%. The Xbox LIVE dashboard ad also resulted in higher levels of cognitive and emotional response than the TV ad.

For cross-media comparisons of in-game ads specifically, Hall & Partners Research for all Massive in-game campaigns sees ad recall for in-game ads at 56%, versus TV at 32%, or online and print at 17% and 18% respectively. For details look to pg 5 of the report, section titled, In-Game advertising delivers breakthrough results.

When brands should consider in-game advertising

If you are looking to reach an 18- 34 year old audience and want to avoid clutter, then you should consider in-game advertising. It is also a great platform to reach children and when they are most engaged. You should also consider in-game advertising when there is contextual relevance. If your brand or creative is aligned with the theme or environment of the game, then you are likely to be able to achieve meaningful exchanges with a high concentration of your target. For details look to pg 5 of the report, section titled, When you should consider in-game advertising?

Categories those are big in in-game advertising

Entertainment brands have a natural fit with the gaming environment. However, there are a wide range of categories that are seeing the benefits of in-game: if your audience are active gamers or your category fits in the environment of the game then it could be for you. Automotive, beverages, fast food brands, and a host of packaged goods advertisers have all seen the benefits of in-game advertising. But if you are financial services brand, it’s probably not for you. For details look to pg 5 of the report, section titled, What categories are big in in-game advertising?

Type of communication that is most suited to in-game advertising?

Gamers are focused on their game, so you need to keep messages simple and direct. This makes it ideal for awareness campaigns. It is also effective at increasing purchasing intent and especially effective at priming audiences for engagements and sponsorships within associated gaming environments. You can use in-game to support other media when you are looking to achieve frequency against a hard-to-reach audience with a brand awareness campaign. If your wider campaign is static and highly visual, in-game can be a great medium to boost awareness. For details look to pg 5 of the report, section titled, What type of communication sis most suited to in-game advertising?

The future for In-game ads

The future of in-game advertising is a bright one. The opportunities on the horizon could easily move in-game advertising into a must do for activating social engagement or creating immersive brand experiences.

The growing social games movement should be of particular interest to advertisers. Whereas traditional games only offer passive ad engagements on a one-to-one basis, social games allow for direct response and are built on the premise of viral growth. These games are built from the ground up as viral engagements that keep users coming back frequently, and as such are well positioned to deliver results for advertisers. Expect to see in-game ad formats and opportunities being built around integration with a brand’s social media strategy. The possibilities include: in-game content that unlocks based on user engagement on a Facebook page, or brand engagements in the game being seeded out to an individual’s social network. For more details look to pg 8 of the report – The future for in-game advertising.

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