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In-game advertising is the place to spend advertising dollars this holiday season

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Anzu.io look at the impact of the pandemic on the gaming industry.

Along with almost all other industries, the advertising industry has had to change course in 2020. Digital trends have strengthened but global advertising spending in traditional media – cinema, out-of-home, print, radio and TV – could fall by over 16%. People have been stuck at home for months on end and are consuming media in entirely different ways than they have in the past. The challenge for advertisers is to determine where their audiences are and how to best reach them.

Well, 3.1 billion people across the globe are gaming! And they are projected to spend $174.9bn on games in 2020, representing an almost 20% increase year-over-year. The gaming audience is now larger than those of the film and music industries combined.

Who exactly are these gamers? In the past, when someone said “gamer,” most people pictured a nerdy, anti-social teenage boy who never left his room or his parents’ basement. Well, that’s certainly not the case anymore! The average gamer age is 33-years-old and just under half of gamers are women! All age groups – including Baby Boomers – play games, whether casually or very seriously. According to Limelight, gamers aged 26 to 35 spend the most amount of time playing at seven and a half hours a week, though almost 20% of men and over 14% of women play more than 12 hours a week.

What does this mean for advertisers? In-game advertising is how brands can reach an enormous and diverse audience that is willing to spend serious money.

Why spend in-game during the holiday season?

December is usually a time of more gaming. This can be due to a number of factors, such as heavier advertising promotion throughout the holiday season; new phones/consoles/games received as presents; increased vacation or at-home time; increased family fun time spent on group activities; or just plain old holiday season boredom. In 2018, December saw more than double the yearly average of engagement on mobile gaming apps. Similarly, a 2017 study showed that about 60% of mobile gamers in EMEA and the US increased their playing time by more than an hour a day during the holiday season, with 11% spending over five hours a day longer playing video games.

In addition, video games and consoles are usually high on holiday shopping lists; in fact, in each of the last five years, sales more than doubled in November and December compared to the rest of the year. This year, in the US alone, spending on games and gaming hardware could reach $13.4bn across November and December.

The 2020 holiday season is going to be one for the books when it comes to gaming. Not one, not two, but three highly anticipated devices are being released during this time: Nintendo Switch, Sony PS5 and Xbox X. The PS5 launched in mid-November and, in its first two weeks, already is the biggest console release in history! And the newly released Xbox X has by now sold more units than any other Microsoft console ever. In addition to the new consoles, dozens of new premium games, including Fifa 21, Cyberpunk 2077 and Animal Crossing have releases planned during this time period.

So, not only are people likely to be playing more during the holiday season, but there are new consoles and games that will keep them highly engaged into the new year.

The major impact of Covid

Not only are people going to be playing more during this holiday season, but there will also be more people playing! The global pandemic has turbo-boosted an already nicely growing market into the stratosphere.

Why? Unlike so many other activities in 2020, gaming proved to be a safe way for people to relax, have fun and, especially, socialize. Research from Nielsen shows that 82% of global consumers played video games or watched video game content during the height of the pandemic lockdowns in the spring. Similarly, an August study reports a 39% increase in spending on video games during Covid and that 60% of gamers indicated they had shifted to playing longer games with more social interaction to help deal with the isolation and loneliness of being stuck at home.

Which brings us to holiday season 2020. With Covid-19 cases on the rise and new lockdowns being announced across the world, more people are going to be spending time at home during the holiday season. Add to that planned vacations and gaming as one of the few safe ways for families and friends to connect and we are looking at the likelihood of significant playing time. Between the expected high gaming-related sales and the increased time that large numbers of people will be playing, the 2020 holiday season is the right time for advertisers to up their in-game spending to reach the gamers where they are.

Screenshot of an in-game ad from 7-Eleven mobile campaign in Gravity Rider Zero Credit: Anzu.io

Conclusion

While this is the first holiday season coinciding with the Coronavirus pandemic, we can get an inkling of what might happen in the gaming world based on the numbers from Chinese New Year, which overlapped with the original outbreak last January. During the first quarter of 2020, mobile gaming revenue increased 49% year-over-year due to the combined forces of lockdown and holiday.

The implication for advertisers? The gaming market is about a third of all people on the planet, has tremendous buying power and is a captive audience. The global pandemic has skyrocketed the growth of the gaming audience and the amount of time gamers spend playing... and new global lockdowns and upcoming holiday vacation time mean more of this moving forward. On top of that, the 2020 holiday season brings highly anticipated releases of new devices and games. Advertisers have a tremendous opportunity to reach this significant audience via in-game advertising and this holiday season, in particular, is the right time to spend more doing so.

Hendrik Menz, brand and agency sales director at Anzu.io.

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