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Apologies to John Adams for paraphrasing his famous quote, but his saying is particularly relevant today considering the number of media reports about in-game advertising I’ve read that have been filled with inaccurate information and wild speculation. So taking a page from the Founding Fathers of the US, I want to set the record straight by divulging five basic facts about in-game advertising.

Fact #1: In-game advertising is thriving.

Industry reports indicate that in-game advertising will continue to rise with research from Screen Digest estimating the global in-game advertising market will reach billion by 2014.

For our 2009 fiscal year, Massive achieved an impressive double-digit year-on-year revenue growth in the face of one of the worst economic crises of the last century. We’re seeing light at the end of the tunnel and Massive already exceeded first quarter sales targets by more than 100% just one month into our new fiscal year.

Massive also recently booked its 1,000^th client campaign, a sign of our continued momentum since selling our first dynamic ad four years ago. In-game advertising remains an important part of Microsoft Advertising’s offerings to agencies, advertisers and publishers and we’re extremely excited about our prospects for the future.

Fact #2: Gaming connects brands to valuable audiences.

Gaming is one of the fastest growing global entertainment forms and marketers recognize the unique opportunities it presents to reach the holy grail of advertising – the elusive male 18-34 demographic who spend less time watching TV and more time playing video games. Nielsen recently reported that that videogame console usage was up 21 percent in June over the previous year with gamers spending an average of 12.8 hours playing games in the month. While the recession has impacted new game sales, time spent playing games – and seeing dynamically inserted ads – continues to increase.

Combine that mass game consumption with Massive’s reach to over 40 million Xbox and PC gamers in 31 countries worldwide and marketers have tremendous opportunities to engage this key audience.

With the maturation of the industry, we’ve seen the brand categories incorporating in-game advertising expand into virtually every vertical. Massive has run campaigns for Quick Service Restaurant (QSR), Consumer Packaged Goods (CPG), Auto and Entertainment brands to name a few. In fact, Barack Obama even utilized Massive’s in-game advertising solutions as part of his “Obama for America” campaign.

Fact #3: In-game advertising works.

Research in North America indicates that in-game advertising is a highly successful medium for brands. Since 2006 Interpret Research and Nielsen Research have conducted over 80 studies across more than 30 clients’ campaigns in 15 different industries on the Massive network. Using the data collected from this research we’ve created in-game advertising norms on brand recommendations and recall. We’ve continuously seen positive trends on these norms and 2009 is no different:

• Average brand recommendation lift scores are currently 29% ahead of the 2008 norms.
•  72% of gamers recall seeing ads for brands in-game – a 20% increase in average ad recall from a year ago.
•  65% of gamers agree that in-game ads stand out more compared to other forms of advertising (online, print, TV), an 18% increase from 2008.

We attribute this sustained positive trend to better publisher integration, more premium placements within games, leveraging past research data and analysis to develop more effective creative and increased audience reach, among others.

Fact #4: In-game advertising is measurable, inexpensive and easy to do.

As with other forms of digital advertising, in-game key metrics available to advertisers include reach and impressions, time and duration of exposure, day part and geography. For the second consecutive year, ad impression processing and reporting across the Massive network has been accredited by Interactive Media Services Group Ltd. Massive was the first in-game advertising network to undergo a third party audit process and we remain focused on responding to market needs for more accountability. The industry is focused on driving the development of standards in collaboration with the IAB Games Committee to drive this progress and have just released In-Game Advertising Measurement Guidelines.

In-game advertising is an inexpensive medium with CPMs in line with cable TV rates for young demographics. The insertion process for in-game creative is also uncomplicated, as ads can essentially be popped into a game, with minimal customization. A campaign can be turned around in a matter of days and ads can be changed while in flight. This becomes increasingly beneficial for existing digital campaigns, as the quick turnaround time for in-game ads can easily extend a campaign to another screen. 

Fact #5: Gamers like it.

In order for an ad to be incorporated into a game, the ad needs to enhance the entertainment value of the overall game experience, never detract from game play, and add realism to the game – meaning, ads in games are integrated in locations where one would expect to see ads in real life. Our process of integrating ads is done with gamer satisfaction being the most important criteria, and Massive makes sure that every new in-game ad goes thru extensive testing with gamers prior to placement.

Our research indicates that most gamers like advertising in the game because it adds to the realism. Imagine playing a Major League Baseball game with no ads behind home plate, next to the scoreboard or on the outfield wall – not very realistic. Now imagine the outfield with up-to-the-minute ads you just saw on television or read in a newspaper – the latest movie release, television show, or a new car model. That is much more realistic.

Gamers are consuming the experience with the ads. The ads add to and enhance that experience, which our research shows is highly effective for both game play and advertisers.

I hope this post has given you some helpful insight into in-game advertising and shows it as an effective, scalable, accountable, engaging medium that brands are increasingly including as part of their media mix. With a blockbuster video game lineup for fall and winter, we expect more marketers will turn to in-game advertising as a cost effective way to reach and engage their audiences. Game on.

Thanks

JJ