Brands are always looking for new opportunities to reach their audiences. And yet, even as digital advertising is set to overtake spending on traditional ads, gaming and its global audience of 2.7 billion remains largely untapped as an advertising channel.
The last couple of years has seen an unprecedented rise in the market size of video gaming and esports. Consider this: it's predicted that the video gaming industry will generate over 160bn USD in 2020. The monthly size of competitive esports gamers is expected to touch 276 million by 2022. While gaming and eSports are making money, advertising has remained a relatively small source of income for developers. Largely, this is due to the fear of intrusive ads and a lack of scalable tech solutions--both on the advertisers and game developers sides.
But advertising in games doesn’t necessarily have to be intrusive. When done right, in-game advertising has many benefits for all sides involved: advertisers, game developers, and gamers.
Let’s take a look at some of the most common myths around in-game advertising.
Myth 1: Gaming is not profitable for a brand’s audience
The traditional image of teenage male gamers bent over their gaming remotes in a basement may have contributed to this myth. For years, brands did not consider gamers as part of their core audiences. All of that has changed. Today’s gamers are sophisticated users who hold much more purchasing power than ever before. Gen Z, the largest user group among all gaming audiences, is the population with the highest purchasing power, an estimated $143 billion. This has changed the perception of brands and has also led to increased investment in video gaming and esports.
Brands have shifted their mindsets and now want to reach out to this formerly-elusive audience group. They also recognize that in order to connect with this audience of the future, old advertising methods will simply not do. Today’s gamers are young users who look for more interactivity and expect authenticity from brands. For these users, the real and the virtual co-exist, and brands need to not only be present where these users are, but to do so in new and creative ways.
Even brands not traditionally present in gaming worlds are taking notice. Take the example of Louis Vuitton who, in 2019, designed the League of Legends trophy case followed by a line of Louis Vuitton League of Legends apparel. Inside the game, gamers can choose custom Louis Vuitton skins and interact with the brand in other ways, too. This collaboration represents a new level of cross-pollination between brands and games, and sets the stage for more bigger, even more surprising collaborations.
Myth 2: In-game advertising is intrusive and disrupts user experience
Yes, bad advertising exists and that is certainly intrusive. But it doesn’t have to be so. Technological innovations in ad tech are creating a completely new advertising ecosystem, one in which ads can be introduced directly into the gameplay without harming game sessions. When done right, in-game advertising is similar to the ads we see every day in our environment — be it billboards or brand logos that “interact” with us all around us in our natural day-to-day space. Gaming today is more than just entertainment. Brands are beginning to realize that it represents a new way for young audiences to socialize. By using innovative advertising formats within the game, brands can explore opportunities to create attractive marketing that is non-intrusive and highly viewable.
In-game ads can provide a new canvas for both brands and game developers. Non-intrusive advertising blends naturally within the game environment, such that creatives are consciously placed within the content, creating an immersive experience for the gamers. These unique placements create real-world brand ads that allow the user to make more personalized connections, enabling advertisers to reach a whole new set of audiences that have thus remained elusive.
For game developers, allowing in-game purchases or content add-ons without disrupting the pure gaming experience is an intelligent way to achieve the balance between opening their games to new revenue streams without changing the gaming environment that users are sensitive to. In fact, recent studies also suggest that when ads are placed in a conscious environment that is sensitive to user experience, exposure to brand messages in games can increase brand awareness and perception.
Myth 3: In-game ads don’t offer measurability and viewability
Digital advertising experiences many issues such as ad fraud and ad blocking. Advertisers are always looking for more insights into campaign behavior and customer action. Typically, tracking viewability metrics for media placements has not been supported in gaming. But with technological advancements and strategic partnerships in this space, ad platforms and cybersecurity vendors are now working hard to provide solutions that can verify ads are delivered to the audience playing video games on PC and console.
Current technologies in gaming are borrowed from the mobile environment but give much more data for advertisers to take the jump into exploring what gaming can do for their campaigns. They make it possible to measure the performance of campaigns in real-time, track ad exposure time, and get detailed insights with various brand safety tools and brand lift measurement providers. These advancements will be critical in the creation of long-term trust and security in in-game advertising, providing advertisers with a new way to present and track ads inside video games. Using this can be a big pull for advertisers who have tested ad viewability in the mobile space and demand the same from video gaming.
Myth 4: In-game ads are not safe for brands
Our final point is tightly intertwined with Myth 3. After understanding viewability, we can better understand and debunk the myths around brand safety. Advertisers experience fears of brand safety in social media where ad placements are not controlled and there are concerns about where the ad is being displayed. YouTube’s 2017 crisis was a frightening call for many advertisers when as many as 250 brand advertisers pulled their ad spend after they found their ads were running next to extremist content.
This is not the case with gaming. PC and console gaming can offer a controlled environment for ad placement without the risks associated with user-generated content. Additionally, the availability of programmatic technology in in-game advertising has made it possible for advertisers to benefit from direct integration with SDKs to obtain greater control over ad placements and transparency.
In-game advertising also goes a step further by offering intelligent brand safety. According to the general understanding, brand safety is often understood as placing ads in content that is safe from pornography or hateful/extremist by nature. But in-game advertising applies the idea of brand safety to reputation and brand values as well. Since game developers are aware of the needs of the core gamers, they are careful to provide an environment for advertising that is conscious of the content displayed. For brands, it is prestigious to appear in big games, lending them a strong association and connection with the gamers.
In-Game advertising: the new frontier
Staying relevant in a changing media landscape is a challenge as audiences find new ways to consume content. Common myths around in-game advertising are based on the lack of knowledge in the industry about what the media channel can offer. In-game advertising offers many benefits to advertisers and can open up new revenue channels for game publishers. Propelled by advancements in technology as well as a change in advertiser and game developer attitude, the growth of in-game channels will lead the next wave of advertising.