Has the industry grown large enough that you could consider other in-game advertising companies as serious competition, or is it still a wide open market?
The barriers to entry are relatively steep for anyone who wasn’t in the business now to start up as it pertains to the retail game space.
All the current participants in the market have been active for some time. DoubleFusion has been in business for officially 2 years as of July 1, and a tremendous amount of engineering time went into the development of a full end solution. There’s also essentially a time-latency … in establishing your network of titles in the market.
I think it’s a very tough challenge because of the momentum that Massive and [IGA] really have among the publishers, and in front of advertisers.
By being independent, and not affiliated with one platform, or one publisher, or a huge media company, we’re able to establish relationships across a wide body of publishers. Massive couldn’t have gotten where it got if it started as part of Microsoft, I’d argue. It was its independence, and the independence of companies like ours that enabled us to go out and help forge this market.
[We saw] clients … spending five figure [ad] budgets in 2004 [and] 2005. We’re actually seeing now [a] shift up to some fairly significant six figure budgets and some lower seven figure budgets. We’re already hitting the millions now, which is quite a key shift.
The industry itself still has to go through a number of gateways. There are two key gateways, one of which is the whole measurements and standards thing. It’s all very well to say, ‘okay, we’ll place a billboard ad, and we’ll measure that on a CPM.’ How do we arrive at a CPM? A CPM is based upon … the size of the ad on-screen, the time that you see it for, and the angle you see it from. Right now there is a benchmark of 1/10th the screen size for two seconds at a minimum certain viewing angle. But that’s not defined in stone … from an ad effectiveness perspective.
While we’re seeing CPM’s of between 35 and 50 dollars, that’s not yet written in stone. We’re yet to see if 1/12th, 1/15th, or 1/8th the screen size is optimal, and whether it’s 2 seconds, 1 second, or 5 seconds for the ad exposure. We’re looking to actually define that definitively, and we’ll be publishing that and distributing those results to the advertising and publishing sector once that’s done.
There’s only really enough room for three or four companies in this space. They’re already there. When Massive were acquired by MSN, we were very quick to point out that that now makes IGA Worldwide the leading independent in-game advertising company. It’s soon approaching the size of a mid-sized TV network.
There’s more than enough cake out there for everybody. There’s no doubt that it’s competitive, but we like to think that it’s a friendly competition. The collaboration bid on standards and measurement and this kind of thing is key. You can’t have three or four different companies out there measuring ads in different ways, arriving at different CPM’s, and communicating mixed signals out there to the advertising sector as a whole. We’ve been drawn together since day one.
Massive has the lion’s share of publishers and titles. We have in excess of 38 publishers with over 120 titles signed up into the network of which over 60 are live today. Is the industry nascent? No, the industry’s not nascent. We’ve been live for well over a year now, almost a year and a half. Our role has been very singularly focus, and that is to migrate advertising dollars into the video game space for the benefit of publishers, gamers and advertisers themselves because it gives them a direct audience that they can target.