Speaking at the MI6 game marketing conference in San Francisco, JJ Richards of in-game advertising firm Massive discussed the ins and outs of the emerging field – what he called “in the games, around the games, and for the games” -- and pointed out the relative strength of games among other entertainment forms in the current climate.
Among entertainment forms, consumers plan to increase gaming spending more than any other type of spending in 2009, and studies also show games will see the least cutbacks among consumers – valuable top positions for advertising in an economic slowdown. Males aged 18 to 34 also cite video games as their “favorite leisure time” activity.
Also key to advertisers, Richards said, is how engaged users are with games – they are leaning forward, gripping controllers in their hands, and paying rapt attention, whereas with other types of entertainment they may be much more distracted or ignore advertising entirely.
Moving onto his three primary topics, Richards showed a montage of in-game ads in a variety of titles from publishers like Electronic Arts, 2K Sports, Activision, Ubisoft – most of them sports games with integrated marketing or open-world games including billboards and other organic ad placement.
Richards distinguished between fixed in-game ads, which can be deeply integrated into a game and which will appear regardless of whether the game is connected, but cannot be updated; and dynamic ads, which are less customizable but can be integrated into real-world marketing campaigns and produced with a shorter lead time.
With fixed product placement, there are multiple levels of depth available: since those campaigns are hard-coded ahead of time, they can be as deeply integrated as a player's customizable clothing, an in-game cell phone model, and so on.
On dynamic ads, Richards referred back to the Obama campaign's in-game ad initiative, as mentioned by Peter Moore earlier in the conference, and pointed to the amount of additional media coverage that the ads generated – thus further benefiting both Obama as well as general awareness of in-game ads themselves.
“That was a big win for us from the in-game side,” Richards said.
“In-game, as cool as it is, is always going to be limited,” Richards acknowledged. “Coming from the game space, I'm not going to want to do an intrusive ad. The gamer is going to hate it. They're going to cry foul at the developer, and nobody wants that.”
While the previous montage showed a number of in-game implementations for real-world-set titles, that approach cannot convincingly work for fantasy and sci-fi games like World of Warcraft and Halo -- but Richards noted that advertisers still want access to those games' lobbies, websites, and other peripheral spaces.
He showed Blizzard's official World of Warcraft site, as well as the Battle.net interface for the StarCraft and Diablo franchises, which are all outfitted with ads. Looking forward, he proposed putting ads in the actual launcher for World of Warcraft, but said such ads would probably have to be closer in tone to the game itself to not feel intrusive.
Richard called the final of the third categories the most important, since it has the widest potential reach. “All these users we have on Xbox and websites, I know who they are,” he said “Now how do I have them when they're not in any of those spaces?”
With Massive being a Microsoft subsidiary, Richard noted the huge reach of Microsoft's Live network, which reaches across Xbox Live, Games for Windows Live, the internet, and all the devices on which services like Live Messenger is available. Those spaces can all be leveraged by advertisers.
With those services, it is possible to do highly targeted ads, he said, so if a known gamer is signed into Hotmail, he will see ads not for tooth whitening or Viagra, but for World of Warcraft.
Delving even further, Microsoft bought Xbox Live ads on the Spike network's site, specifically targeted at people who subscribe to Live but whose subscriptions were close to expiring. This was cost-effective for Microsoft, since the company was serving those ads to a specific group, and it was effective for the consumers, since they were seeing ads relevant to them.
He gave another example of the depths of potential stratification: starting with gamers, narrowing it down to Xbox 360 gamers, then specifically shooter fans, then those who have played a particular shooter, then who actually completed the campaign, then those who don't yet have the paid downloadable content for the game – by targeting down to that particular group, a publisher can advertise its content to the specific people who are actually likely to want it.
Richards calls that approach “BYOT,” or “bring your own targeting” -- that is, if the advertiser knows its target market, it can bring those criteria to Massive to help actually deliver the advertising to the right people.
How else could this be used? Richards presented a few other concepts – announcing new Netflix movie availability based on users' viewing history, launching Halo Wars specifically to those who are fans of both Halo and RTS games, advertising a new Live Arcade games to fans of the same genre, and advertising the Grand Theft Auto IV expansion to those who have completed the main game but haven't loaded it up in months.
“Learn it, tune it, improve it, over and over again,” Richards said.