The rise of In-game advertising (IGA) (the use of computer and
video games as a medium in which to deliver advertising) has been driven by 2
key factors – the increase in the number of children paying video games and the
time spent on each video game as plots game offerings become longer and more
intricate. According to DFC Intelligence, video game spending has risen more
than twice what it was in 2011; from $3.1B to $20B. There is a growing
opportunity for in-game advertising because it is the only platform where
people are completely immersed in one activity. When gamers play a game, they
tend to only play the game. Trends indicate that players do not do much
multi-tasking which would split their attention away from the game.
In-game advertising has even replaced purchase price as a revenue
model for some mobile phone games.
Advertisers see in-game advertising as a prime way to target the male
18-34 demographic, who are increasingly neglecting television in favor of
computer and video games. Companies like Google and Microsoft have already
joined the bandwagon and are offering interesting propositions of in-game
advertising. Microsoft, which bought Massive in May 2006, is a leader in
placing dynamic advertising in games. The market is filled with many smaller
players, such as a company called Double Fusion. But it’s also attracting other
big technology names, including Google, which bought AdScape Media for $23
million in 2007.
Unlike other platforms that have seen an inundation of Google and
Facebook ads, gaming platforms are required to maintain a higher focus on user
interface, user design and user experience. The threat off drop off following a
poor single user experience is far too high of a risk for these companies who
rely on network effects among customers, particularly for multi-player games.
However, within the confines of these design parameters, the scope for
monetizing ad revenue remains very high and relatively under-explored.
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