The In-Game Envelope

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When an 18-34 year old comes home after work, it’s primetime. But these days, instead of flipping on the TV like they would’ve done a decade ago, they’re firing up their next-gen gaming console or supercharged gaming PC, and fragging wise guys into the wee hours of the night.

Given the turn towards gaming of this coveted demographic, and the rising costs of game development (the average price of creating a blockbuster game already stands in $3-6 million dollar range according to the BBC), it only follows that game developers would seek new ways to recoup their costs and increase their profits by opening up new revenue streams. And most recently, the flow of money has begun to come from advertising—in-game advertising.

It’s not just hearsay: Researchers are now finding hard evidence that in-game advertising is a positive not just on the business side, but for consumers as well. Three studies in recent months—one published by Nielsen Entertainment and Double Fusion in October, one by Mediaedge:cia in November, and the other by Nielsen and Activision in December—reveal that in-game advertising not only works, but that it’s potentially more effective than TV advertising for reaching 18-34 year olds. According to Nielsen Entertainment CEO Andy Wing, with in-game advertising, “18-34 year old male audience premiums [are] 6-7 times the average prime time television CPM.” Moreover, these studies found, gamers actually don’t mind making in-game advertisements a part of their gaming experience—as long as the ads are tastefully done and don’t interfere with game-play. As with so much else, context (and class) means everything.

Geoff Graber, CEO of in-game advertising company Double Fusion, explains the power of the in-game model this way: “In a game, rather that just sitting back passively and watching, like you do on television or in a movie even… you’re interacting with the game very directly, all the time, 100% of the time, and not doing something else while you’re playing the game,” Graber suggests. “[In-game advertising] becomes truly a part of the game experience, even part of the reward experience within the game.”

And it’s not just game companies who win, according to Graber—advertisers can reap brand building rewards as well: “That [reward] can even carry on beyond the game, so that the user really has gained an affinity for that brand, [and] can learn about a new product.”

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