Could gaming hold the key to delivering personalized advertising at scale?

The fate of personalized advertising will be heavily defined by the shape that privacy takes in the future. Right now, we see a trend towards centralization of user data in favour of giving users more control. Apple and Mozilla were the first to implement anti-tracking by default while Google is working on a ‘Privacy Sandbox’ solution that will give more visibility and control to the users as to how their data is being used around the web.

Machine learning algorithms have been used for personalization of ads for quite some time now. While we should expect to see these algorithms getting better and better, big tech’s efforts to standardize user data control will most likely lead to a scenario where users can adjust, refine or even create their data to be used for advertising. This could mean that we will stop seeing those annoying cookie consent notifications. Instead, ad providers will talk directly to a user’s browser or device in order to understand their ad preferences, personalizing their ads accordingly.

As always, there is an alternative route: the attention of users is tokenized, enabling them to get rewarded for engaging with ads, as we’ve seen with the Brave browser. Although this approach hasn’t had significant traction yet, since it offers almost full control over what users want to see, it might still prove to be a powerful contender if the heavyweights fall short on adapting over increased privacy concerns.

When it comes to personalized advertising, although people tend to think about shopping, search, browser and watch history, there is a huge advertising space within the gaming ecosystem that is still yet to be filled and personalized.

We have seen advertising follow the usual pattern in gaming over the last decade or so. First, we saw meagre display panels outside of gameplay, over or in-between game screens. Then, brands moved into gameplay with display elements. And finally, we began to see advertisers targeting gamers externally via sponsorships, brand collaborations, social networks, esports and game influencers.

The rise of the game-as-a-service concept, the increase in the average age of gamers and the time spent playing games indicates a need for a more native form of personalised advertising. We have already started seeing in-game product placement but it is highly likely that, as the free-to-play model becomes more of a norm, we will start seeing personalised advertising becoming more embedded in gameplay mechanics.

Think of whole quests created around a branded legendary item or functional shop fronts within open-world games. We could easily see a granular level of personalization using the data generated by players within the well-defined, relatively unfragmented world of games. Arguably it is easier to personalize ads according to players’ gameplay styles, characters and accessory choices in the rule-based, closed systems of games than it is in the variable environment of the web.

We can take this one step further with the follow-up standardization that will soon be introduced by platforms such as PlayStation, Xbox, Steam and Epic Store allowing personalization by including players’ preferred game types, achievement levels and time allocations.

Although personalized advertising might still be perceived as a necessary nuisance by most, it has always been more acceptable when it enhances user experience. I believe that while we are still yet to see ads going beyond the point of relevance on the web, we are far closer to seeing advertising that enhances users’ gameplay experience in a seamless manner.

All in all, fuelled by privacy concerns, in the near future we should see more standardization and less fragmentation in personalization as digital networks assume more control over data, all justified by better user experience.

There will always be alternatives for users who are more sensitive about the use of their data, especially in the form of watch-for-reward mechanics. However, I don’t see this as a major factor moving forward. Instead, we will see a more rapid refinement of personalization in gaming due to the constant rise of game-as-a-service and free-to-play games.

Hakan Karlidag is head of technology at Waste.