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Opinion: In-Game Advertising's Big New Play
Opinion: In-Game Advertising's Big New Play
April 26, 2011 | By Colin Campbell

April 26, 2011 | By Colin Campbell
More: Console/PC

[Instead of shoving messages down the gaming world's throat, EA's new ad guy Dave Madden wants to give away free stuff, including console DLC games, sponsored by brands. Will consumers get the message? Gamasutra business editor Colin Campbell investigates.]

In-game advertising. My, doesn't it just blow? It's the unfunny photo-bomb, the inappropriate clanger, the unwanted guest. It tries so darned hard to worm its way into your affections, you just want to take it outside the back door to the concrete yard, and kick it repeatedly, savagely, until it just curls up and begs to die.

OK, yes, I have my opinions on this subject.

So does Dave Madden, although his opinions are of a milder hue. He's the new head-honcho at EA's grandly named Global Marketing Solutions Group. To say that his job is to sell ads and stick them into games would be both entirely accurate and grossly unfair.

Sure, EA wants to sell advertising, but Madden understands that the 2005 concept of shoe-horning some miserable retailer's logo into a mall-shoot-out scene, again and again and again, is not the way forward. In fact, Madden's vision sounds a lot like good sense.

I'll illustrate his ideas with a story. Last month I bought the excellent MLB At Bat for iPad. Alas, I am not a subscriber to MLB's TV streaming service (MLBTV) so I was unable to access this 'extra' part of the package. But the good people at BMW decided to give MLB a bunch of cash so I could watch a month's worth of baseball games, for free.

Now, I count this as a favor and it makes me feel good about BMW. I have also been exposed to some propaganda about their products which I otherwise would have avoided. Bravo BMW. Who says the Germans are no fun?

Take this model to, say, Xbox Live. A piece of DLC sits there waiting for your purchase. You can buy it. Or you can watch some ads and play a version with some branding built in, for FREE.

So at this point, I am apologetically picking up our old pal "in-game advertising" and dusting my shoe marks off its raincoat. I'm inviting it back into the kitchen for a glass of lemonade. It might not be such a bad chap after all.

Here's the nub. If you give the people something for nothing that they would otherwise have paid for, everybody's happy.

Madden says, "This is the right place where brands can get involved and still have the user be in an opt-in situation. Where they can choose to get additional content courtesy of brands. I would like to posit [free DLC] as a legitimate opportunity for game publishers and advertisers to really have a great experience for users."

He believes that offering consumers value and choice is the smart way to persuade them to tolerate brand marketing within games. "Without a doubt the best way is to put the user in control to decide whether or not they want to engage with the advertiser. And if they don't, then the gameplay experience is exactly what it would have been without the advertiser. But the ability to earn virtual goods is up to the consumer. There is a big difference between that and forcing a situation on a user, which can have the wrong impact."

This isn't to say that non-optional advertising is set to disappear from our games screens. Sports games in-stadia marketing is here to stay, and it may well be that this "enhances the experience" as Madden says.

But a media company of EA's scale cannot afford to turn its nose up at the potential of advertising. Think about the $100 billion being spent on TV and online advertising. These ads are targeting the same people who are spending more and more of their time on mobile devices or on social networks playing games.

Madden says that in-game advertising, to date, has been "a niche business" adding that "when you take it out to these gigantic social, mobile audiences, that's where brands are going to want to interact and build business".

In the social and mobile space, free-to-play is the norm. Upgradeable experiences are the model. So the opportunity for brands to subsidize those experience is much larger than in the traditional console space.

"If you give the user the opportunity to earn the same goods for items that they were going to pay money for via an ad engagement or an ad view, 99.5 percent of the time they are going so say, 'sure, I'll take that deal,'" says Madden. At his previous employer, WildTangent, advertising went from single-digit share of revenues to over 50 percent, as the company moved from selling its goods, to an ad-subsidized model.

What's the ambition here? Nothing less than the models we see in other media businesses. "If you look at any major media type - TV radio, print - you'll see that advertising can be in significant double digits [share of income]. If you watch ESPN, your cable provider is charging you $4 a month to watch that. But ESPN is still making 30 percent of its revenue from advertisers."

"There is always a healthy mix even in mature platforms and gaming is moving so quickly to digital and free-to-play with transactions, that the system exists for that value exchange to become meaningful, significant revenue."

Advertisers are torn between two problems here. They want to engage with people playing mobile and social games because they understand that is where the action is right now. Advertisers follow the crowd. But creating a campaign around a game is complicated. And it's difficult to find the right metrics to compare against the tried and trusted TV ad campaign. Madden says his main role is to make life simpler for the Don Drapers of this world.

"My goal is to make it easier to buy and implement and measure. The thing that advertisers really care about is efficiency. They manage enormous budgets with small teams of people. They don't want to get too deep into the weeds of every little detail. They want to find some trusted partners, get good results, repeat and grow. So they want systems that offer results that they can compare with an ad on, say, Yahoo. They need to be able to see that it works so they can accelerate and grow."

In its simplest terms, the advertiser isn't weaving its narrative through a game, it is merely sponsoring a piece of content that a person downloads. It is adding its message to the content, just as it's always done with soap operas. But do we really believe that watching an ad will be the end of the consumer's relationship with the brand, as he or she interacts with the experience? Surely, there'll be some weaving going on, and this is where life becomes complicated.

Putting games and ads together in a way that isn't a huge turn-off can only be done through creative thinking and lots of interaction between the ad team and the developers. (Madden says the worse thing advertisers can do is attempt to create their own content, the kind of dreary marketing ghettos that plague Facebook, Second Life etc.)

Whatever systems he puts into place, it's never going to be as simple as booking a network TV campaign, nor should it be, since TV ads are horrible things that we seek to avoid, while games - with or without ads - need to be something we embrace.

The old model of advertising worked because people put way less value on their own time than we do today. In order to let a brand into my life, I expect something in return. This trade is the foundation of Madden's approach. Advertising cannot be viewed as something consumers are forced to tolerate, but something we opt into, according to our own perceived benefit.

The danger comes, of course, when the advertising option seems to penalize other options, when the guy who watches the ads gets a bigger gun instead of something neutral, like a more snazzy jacket or a pair of fabby sunglasses. Marketers coming to gaming - social or hardcore - without understanding the potential pitfalls of pushing too hard, will likely come to grief.

[As well as being business editor for Gamasutra, Colin Campbell works for a marketing agency. You can follow him on Twitter at @brandnarrative.]

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Dorica Prostel
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In-game adds still have the giant problem of being visually distracting and off putting. I don't think coming with free extra stuff will fix that...

Frankly i'd rather watch an advert prior to entering the SP/MP/DLC then seeing billboard adds or something while playing.

Rafael Vazquez
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Thats the nice idea behind get the choice. If you'd rather have an ad-less game you can buy the game/DLC and get that option. What kind of worries me is that, if this model becomes successful, than the developers will start concentrating on the ad version of the game, leaving the other one behind. In the end, then the ad-less version could become an inferior version, leaving those who don't want ads stranded.

Lennard Feddersen
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There is a definite danger there. With consumers coming to expect snack pricing on games, ie. free to $0.99, there is an expectation that everything higher priced is a "rip-off" and more and more folks are going to be content with a quick, even ad. based, experience before they move on to the next thing.

Brent Orford
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Having worked with Dave Madden for 9 years back at WildTangent... this is very much the sales model they employed there.

Their system works around a micro-transaction system; similar to how physical arcade machines operate. You could choose to put in your own coins and play as long as you want for that session or, if an advertiser had jumped on board (say Coke) - you could put in Coke's coins and play for free. The games are bookended by high-CPM video ads that can be better targetted to certain demographics (soccer mom's play diner dash, teenage boys play duke nukem) so advertisers can know in advance they're sponsoring the right kind of people for their products. The developer gets paid either way because the cost "per-play" can be determined instead of the cost of ownership. Coincidently WildTangent also offered ownership of a game for 20 bucks as a 3rd option for monetization.

So if he carry's the same model over to EA then folks like Dorica will be pleased because it means you watch the advert prior to entering the game (or go grab a drink during that period of time.) ;)

If EA pumps out enough titles with this model attached and other publishers follow suit, then the eco-system of ad-supported games is properly seeded. The barrier to entry on any particular title will be greatly diminished for the consumer so it doesn't matter that they move on to the next thing as Lennard is concerned about; your game is the next thing from the game they just played for a lot of people. For every title they move on to, the consumer is being monetized in some form. As long as the consumer is engaged and choosing to play *something* you're making money. It doesn't matter what they're playing. Right now you only make $60 once at retail, and that's on new sales only... nothing on used.

I understand how this works for a casual game publisher like WildTangent - they have 400+ games so the above can work well. I'll be very interested to see how EA implements this in a console environment.

Anthony Giallourakis
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Here we go again!

While the big game developers/publishers are "still" trying to figure out how to make advertising in their video games work, the real advertising play in the games business is exploding in user interest, that would be Internet browser based advergaming.

There are multi-billion dollar corporate players out there that are learning how to create advergames (branded video games) that are getting bigger, better and play more and more like investment driven gaming all the time.

As the "browser" continues to improve, and as more browser game development tools are releases (check out what Adobe is working on, Unity, HTML5, etc.) the ultimate advertising model will leave many of today's biggest game developers/publishers out in the cold. Sorry guys and gals, but you know its coming. Water finds its level, sooner or later, even in the video game biz.

Today's Facebook social-casual gamer didn't exist 5 years ago. The social gaming boom has brought 10's of millions of new players into the fold. Don't you think the world's biggest brand companies know this? Sure they do, and that crowd is exactly the demographic many of these corporations are after. They can either let themselves be talked into streaming traditional advertising into someone else's content and be happy with that limited success, or they can spend those millions/billions on building their own content (advergames) and own the full attention of those who play them around the world.

The idea that I can select to be advertised to in exchange for an item, to play another level, or to gain some other advantage in a video game undermines the value of the game itself, and it has an anti-climatic effect on the overall experience. That, and it can tarnish the brand itself via brand contamination if the game content and advertising sponsor are not aligned properly. Who's going to police that?

I can understand the perspective of someone who worked at an in-game-advertising company that is now at a major video game developer/publisher, they have no choice in their prognostications. On the other hand, I can see clearly that their own futures are risked by not realizing that in game advertising sucks, and it will always suck, even if it means there is an exchange of value in it for the player.

In game advertising is one massive mistake becasue it considers the advertisement first over the gamer. Advergames are games first, and the player has the choice up front to "elect" to play or not. Well executed advergame development is on the rise and quickly becoming a bigger part of the casual game experience. With an advergames, the player says "yes" to the brand and therefor relates the fun to the brand. With old in-game-advertising, the players is saying "yes" to the freebie, to the item or level of play, but not necessarily to the sponsor. What they are saying is "maybe, maybe not".

It won't be too far into the future when you will hear a gamer say, "Can't wait till Axe comes out with their next game. The last one was awesome!" There is no way the traditional video game giants will hold on to their market share if they don't wake up and realize that their biggest competitors are not video game developers/publishers at all. They are the Fortune 500 times 100.

Brent Orford
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Actually that was what WildTangent tried first... The WildTangent Web Driver was in the early part of 2000 what Unity/HTML5 strives to be today in regards to an open 3d platform that handles streaming of assets which can be used for browser based development.

The big misconception is that people don't actually want to play games in a browser. There's a lot of subtleties in browser input trapping that end up being confusing to users (i.e. having to click inside the control on a page before playing, mouse visibility goes away and becomes locked until user hits "esc" (hopefully standardized) because it's being used for mouselook inside a control inside a browser - etc...)

The common consumer couldn't care less that their game is surrounded by a browser window. What they really want is games "launched" from a browser. They want to click a link, and be playing... skip all the installation, download time and garbage like that.

For advergaming Dave Madden is speaking from experience on the model he's outlining above. He and the rest of us have been down the advergaming path and coincidently to your example of Axe - we've worked with them! (See:
r/ ) I can tell you firsthand, no one has ever asked me to make Mojomaster 2. It wasn't that Mojomaster was a bad game, it's that advergames don't have long-lasting appeal.

From the standpoint of a company reaching out to traditional advertisers to build an advergame for them, it's a hard sell. If an advertiser wants to make an ad campaign and have a game featured in it, then an advergame can work out. What needs to be recognized is that advertising is done by advertising agencies, not the Fortune 500 companies themselves. The agency needs to be able to quantify the cost/value of the advergame proposition before giving the go-ahead or they may loose their client if it flops.

They know that the money given to them for the campaign needs to hit certain benchmarks set by the fortune 500 company for attach rate and such - and none of those benchmarks fit advergames. It's not on the radar. Unfortunately for advergames they don't get solid data on attach rates or have any of the other metrics they use on traditional advertisments so they're really stepping out on a limb everytime they agree to pay for one. It's a hard sell; advertisers REALLY need things boiled down to a traditional CPM to be able to quantify sales and that's what Dave's bringing to EA.

Dave is a great pickup for EA in this area, he has a wealth of knowledge from dealing with advertisers directly for so long in the ad sales and advergaming arenas. I'm sure his work will help steer not just EA but the entire gaming industry in the right direction regarding advertising and how to incorporate it properly into games.

Anthony Giallourakis
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The advertising agencies are not going to become developers, but the smart developers will become advertising agencies. It is a lot easier to move a development mentality into an advertising mode than visa versa.

As the browser improves, it is only a matter of time before the advertising industry wakes up and realizes they have two choices, incorporate a development company mentality or seed ground to those competitors who do.

Interactive content that is created from the ground up or existing content that is modified substantially to incorporate branding/communicate a message will become the primary foundation for many if not most of the leading Fortune 500 companies' advertising. It is only a matter of time. As technology improves at a blistering pace, liner and non interactive marketing and advertising will wane substantially.

Industry participants can either continue to try to slap in game advertising onto gaming products, or they can leverage the future improvements in access to amazing interactive advergaming and reap the monetary rewards that will be associated with that.

The best way to guarantee future success is to create it yourself. EA should be focusing on how to adapt gaming to incorporate the advergaming concept and leverage that to its fullest benefits. Slapping billboards on their games and dropping leaflets through out the game play is a frivolous and backward looking strategy that leaves plenty of room for competitors old and new to take additional market share away from them.

EA can do better, much better.