Why gaming will be advertising's next key channel

Gaming has been on the radar of advertisers for some time, but it seems to have become a more intriguing prospect in the collective consciousness of the industry over the past year or so. This may be down to technological advances that enable better quality, immersive advertising in-game or a wider reflection of the gaming market’s size, which is expected to reach more than $152bn this year.

High-profile brand activations within games such as Fortnite, the rise of influencers and increasing celebrity involvement in gaming have all propelled the industry into the limelight, but it has been a part of mainstream culture for years and comfortably outstrips both film and music in terms of revenue.

Recently the proliferation of streaming services such as Twitch and the popularity of video game content on YouTube has grabbed the attention of many advertisers. However, the launch of cloud-gaming platforms such as Google Stadia and Microsoft’s xCloud later this year are likely to represent an inflection point where brands start to view gaming as an important marketing channel that will be a part of their plans.

[More: Fifa, product placement and the future of ads in video games]

Gaming will future proof the digital ad industry

Digital ad spend hit a staggering £13.4bn in the UK last year against a backdrop of falling audiences in traditional channels such as TV and radio, and a growing appetite for more transparency, tracking and reporting. Evidently the future of advertising lies in the digital world and that is precisely why gaming is such an appealing prospect – 86% of global internet users play games on at least one of their devices, whether that’s a smartphone, PC or console. This figure increases to 92% among 16-24 year olds – a demographic that is notoriously difficult to reach via traditional routes.

Gamers spend, on average, seven hours and seven minutes per week gaming, which represents a valuable window of opportunity for brands to share clear and engaging content with a captive audience. Interacting with gamers when they are fully immersed in play has a number of benefits.

First and foremost the target audience isn’t distracted. They aren’t split screening or scrolling through news feeds at breakneck speeds – they are focused and engaged on the activity at hand. The audience also can’t block ads that are served directly into a video game and brands have greater control over when and where their creatives are served, meaning they appear in a brand safe environment.

Provided ads are placed into natural ad spaces within a game, they offer highly viewable creative that can make an impact without disrupting or intruding on the user’s experience. For some gaming environments such as sports stadiums and racetracks, the native in-game ads actually make the backdrop look more realistic because players expect to see some sort of advertising in the billboard spaces and trackside hoardings, as they would in real life.

Gaming is for everyone

An important string to the bow of gaming is the diversity of its audience – in the UK the average gamer is 43 years old, a woman and highly educated – a far cry from the outdated stereotypes many people hold of teenage boys holed up in their bedrooms.

With cloud gaming on the horizon, we are expecting to see new types of gamers interacting with the medium, as gaming in general becomes more affordable and accessible. All people will need to access high fidelity gaming is an internet connected device, a stable connection and a controller. The smartphone is already the most commonly used device for gaming, and it is anticipated that cloud-gaming platforms will dramatically increase accessibility across all game genres, including those suitable for native in-game advertising.

Influencers are the rock stars of gaming

Influencers have played a major role in boosting the popularity of gaming and raising its profile in the mainstream, with massive secondary audiences watching live streams and gaming videos featuring their favourite personalities. To put this into perspective: videos and streams watched via Twitch and YouTube have bigger audiences than Netflix, HBO, ESPN and Hulu combined. Celebrity gamers such as Ninja and Pewdiepie have been known to attract 320,000 concurrent viewers across single streams, although this still falls short of the 600,000 achieved when Ninja took on rapper Drake last year.

When you add in the enormous reach that esports events offer, a wider picture begins to emerge of the traditional world we know being taken on by a new digital one. Traditional sporting events such as the Super Bowl (98 million viewers) for example are beginning to be outstripped by events such as the League of Legends World Championship (100 million viewers) which demonstrates, in quite a powerful way, where advertisers should be focusing when looking for the next big opportunity.

In-game advertising already offers brands a valuable opportunity to reach engaged users, whether they are fully immersed in the gaming experience themselves or watching their favourite esports events and influencers in action online. And cloud-gaming platforms will take that experience to the next level, making it more affordable and accessible for players and opening the door for advertisers to an ‘unreachable audience’ in numbers that have never been seen before.

James Draper is chief executive officer at Bidstack

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