While spending stays the same in the year 2007, in-game advertising, although still owning a modicum of advertising budgets, is raking in increasing revenue. The amount of individuals that can be reached through in-game advertising is dynamic and the demographics, whether cultural, male or female, or within certain age ranges, are a part of the benefits associated with this medium. Working with publishers and advertising agencies, IGA and Massive have grown and are predicted to grow further with measurable in-game ads. The possibilities seem to be endless with consumers demanding products like Playstation 3 and Xbox 360. Justin Townsend, CEO, IGA, and Alison Lange, VP Marketing, Massive recently elaborated on those possibilities with ADOTAS, along with how in-game advertising networks work and what lies ahead.

In understanding networks like IGA, first we must understand how they work. Via relationships with major publishers, clients generally come to in-game advertising networks with a budget and a campaign. “Often the creative is already done and if not we can work on that too and we take all those assets and pluck them into our games, press a green button and that campaign goes live internationally,” says IGA’s Townsend. When it comes to technology, though, Alison Lange claims, “The technology was built from the ground up to deliver advertising into games and the complexity behind that is not trivial. The company was really built by gamers with the mindset of the advertising needing to fit in the game environment, and over time would prove to be a great source…giving something back to the gamers.”

Across both networks, one thing remains key- the gamers experience cannot be interrupted. “Games need to fit within and enhance the gaming experience,” Lange notes. As games continue to become more true-to-life advertising can be integrated almost identical to that of the real world. IGA makes it a point to have all creative stay true-to-life, especially with subway ads that reflect what an ad in the NYC subway system may truly look like. “What we’re doing here is creating a new strategic advertising channel within in-game advertising, and what we’re finding is that it’s becoming more of a line item on a typical media agency media mix,” says Townsend. Currently, IGA serves ads within a country, city, or street-leveled accuracy, which keeps ads on the street and ads within games relevant to one another. This also provides opportunity for ad campaigns to run together, within both in-game and traditional outlets.

Advertising within interactive games once consisted of positive product association advertisements, which according to Townsend is clearly distinct from how IGA works. The two areas that in-game advertising is broken down into are key areas called SIGA and DIGA. SIGA is associated with positive product association while DIGA, which stands for Dynamic In-Game advertising, is a scalable part of the business that networks like IGA operates with. “It’s all about creating awareness,” Townsend says regarding the benefits of DIGA. No longer are cans of Red Bull being used just to give video game characters an energy boost. IGA’s strategy puts billboards on racetracks, subway systems, on walls and within games where as Townsend states, “it’s changing with the reality of games and how to register with its users.”

In fact, videogames have become major media outlets and have even garnered more of an audience than TV. 400 million eyeball hours are attributed to gaming while only 143 million hours go towards watching television. A Nielsen report recently stated that 12% of the male demographic is watching less TV and have dedicated 20% more of their time to playing video games. “You have people spending more time out of their days interacting with games,” says Lange. “Then you have this incredible media form in games now, especially in the next generation games. You combine the huge audience, great creative environment, and content with a dynamic technology platform, which Massive pioneered and you have a huge opportunity to turn games into very valuable media content.”

That opportunity now consists of women, which is one of the growing audiences in the in-game advertising medium. According to Townsend 40 % of the gaming population is now female, and it doesn’t stop there, retirees and seniors are also a growing demographic within gaming. Although more women tend to gravitate towards casual gaming, the late teen to 20-year-old age range is playing the same games as the 18-34 male demographic. Those games associated with women are not casual games; instead they are high end retail games that consumers will purchase for the experience. “When the first Playstation came out they sold 100 million units worldwide, they sold 100 million Playstation 2 units,” says Townsend. Including the Xbox 360, the amount of gamers is an incredible number. IGA maps their users using a technology that can show throughout the world where gamers are engaged, and just how concentrated that one area is.
The gaming devices that consumers can purchase today are evolving into full-scale media devices. The devices are actually now called “mixed generation devices” because users now can browse the Web, watch movies, listen to the radio and play games. This has prompted a new term called “the battle for the living room,” where not only will games become an entertainment outlet, but they will be the primary outlet for families and households. “The main thing about games as opposed to television is that television is a passive medium whereas gaming is a lean forward medium and. People are very engaged when their gaming and that makes them very susceptible to the advertising messages resulting in the fact that we get very high levels of engagement and ad product results,” Townsend explains With a central media hub based in a gaming device, advertisers can extend their reach, and not only within America but throughout the world.

“The next generation consuls are realistic, a car in the game has the same physics as a car in the real world, so as these games become more realistic and the consuls more powerful. What you can do advertising-wise knows no limits,” Townsend concludes. “You’ll have fully interactive branding campaigns where it comes alive because the future really knows no bounds.”

Prior to Eyeblaster, Cohen served as VP Business Development and Senior Director of product marketing in C.A.C Media, Comverse Technology and Odigo. Working with a company in the beginning stages became an integral part of Cohen’s work ethic and solid background. ADOTAS takes a minute to talk to the Director of Emerging Media about his role at Eyeblaster, how the gaming industry has become a part of his life and about the in-game advertising factory at Eyeblaster.

Hi, Ran. Before Eyeblaster, what was your experience?

I joined Eyeblaster to support the expansion of Eyeblaster’s Advertising Campaign Management (ACM) suite to additional emerging digital platforms such as games, mobile and IPTV. My experience did not include an in-depth understanding of the gaming industry; however, I had a strong background evaluating business environments and emerging technologies, and opportunities where the two areas fit well together. In the past, I was involved with business development in instant messaging, user oriented mobile applications and IPTV projects. In this context, I collaborated with third parties and leveraged emerging technologies to introduce new revenue-generating products.

How does your current role at Eyeblaster differ from your professional history?

The focus of this industry is on providing value to end users through entertainment- this is different from my past work, and it’s very rewarding. I am pleased to have helped bring to market eb.in-games, Eyeblaster’s in-game ad product, which creates additional monetization options for game developers — and additional incentives to deliver quality content to end users.

Did you have an interest in Eyeblaster before joining the company? How did your experience, which did not involve in-game advertising, come to prepare you for the Eyeblaster opportunity?

I had been following Eyeblaster for a few years before I joined the company. The introduction of Eyeblaster’ Advertising Campaign Management product suite, which provides a comprehensive set of tools and products to interactive agencies, brought about the need to expand such capabilities to additional platforms. I thought this new opportunity presented a tailored fit between my skill set and the company’s needs.

What company gave you a start within the technology world and how did you make it to where you are today?

Odigo, an instant messaging and presence startup that was later acquired by Comverse Technologies (NASDAQ: CMVT) gave me my start and provided a solid background with technology products. Like many other startups, the company began in a small apartment with high expectations and a heavy workload. I joined the company in its very early stages and was lucky to get the opportunity to face growing challenges on both the business and product sides. Those years were very intense, and I was exposed to and involved with the many different ingredients required for success of any product. Since then I have taken part in many other projects, all having something to do with innovation. Those experiences lead me to my role at Eyeblaster today.

The Human Rights Commission in New York made it a point to investigate this issue last year when hearings were held on how the advertising industry hires, promotes and maintains its employees. In order to keep the conversation going, ADOTAS brought up this somewhat contentious issue to a pair of industry execs that head successful multicultural agencies of their own. By doing so, Bob O’Neil of Images USA and Richard Wayner (pictured) of the TRUE agency shared their perspective on diversity and revitalization within the advertising industry along with the way forward and what needs to happen.

Constantly criticized and publicized for being outspoken, especially in regards to the racial disparity topic, TRUE’s Wayner simply argues that he wants to “speak about the way forward because it’s a huge opportunity for Madison Avenue to revitalize itself.” Although unintentionally, the CEO of the True agency has become an unofficial spokesman on the multicultural dearth within advertising, stating the obvious when no one else did. Today, Wayner adds, “I think it requires some courage and creativity, but I think it’s a huge opportunity.” The opportunity which he speaks of, diversification, exists for all parties, including major advertising agencies, multicultural agencies, and more importantly for brands that would be able to genuinely reach their potential consumers.

For anyone that may question whether or not racial disparities exist in our arena, a simple glance at agencies and their demographics would prove in the affirmative. According to Bob McNeil, who cites the HRC inquiry, a racial divide within advertising is not only prevalent, but it’s been around for too long. “There’s definitely a lack of diversity within advertising. Last year, that lack of diversity was so paramount that the Human Rights Commission in NY held hearings, and you saw a lot of the large mainstream agencies sign agreements to increase their diversity or to diversify their ranks from a personnel perspective and so forth,” he says. While it is an unfortunate stain on the industry, McNeil adds, “At the same time it also has created some unique opportunities for firms like Images. Because of our expertise and because of that diversity gap within the general market firms, it’s created this niche marketplace for companies like [ours].”

In creating opportunity for multicultural agencies, the major advertising agencies that have been slow to integrate may have also shorted themselves on genuine delivery and multicultural expertise. Wayner sees all parties benefitting from partnerships, stating, “The front line of a general market strategy should be a transcultural strategy because transcultural people are going to be the icons, decision makers, thought leaders and trendsetters.”

Being an African American woman married to an Irish-German, a mother of two, and most importantly, COO of a trendsetting ad agency, makes Valencia Gayles a rarity within the advertising industry itself, which already lacks a substantial multicultural presence. By using the traditional methods of reaching the multicultural market, most agencies would have difficulty targeting Gayles and her family because in reality she represents “transculturalism,” both professionally and personally.

With opportunities to work in the multicultural market before joining True, Valencia stayed the course for fear of being pigeonholed, or typecast into one area. Part of the reason behind Gayles’ decision to cross over to TRUE was that she “didn’t want…to be a typical multicultural shop and wanted to squash the perception of the multicultural, transcultural or ethnic shop as being second tier.”

Valencia affirms her belief in TRUE and its ideology by stating, “Out of everyone that works at TRUE, if you ask them to define transculturalism, you’ll get 40 different responses. From a marketing standpoint, transculturalism helps clients because we design the agency to mirror the population of the US. The U.S. is not comprised of all White people, all Black people, or all Latino people, so why would you have an agency that’s comprised of all or primarily those?”

The multicultural market is becoming a driving force behind the general market and it is evident that in order to successfully reach the diverse, multicultural audience, an approach that goes beyond color has to be adopted.

Valencia sees the mélange of cultures as the way “the world is going”. On defining transculturalism, Valencia goes on to say, “Instead of trying to talk to individuals from an ethnic sensibility you get a little bit deeper into what they are about as a person. For me as an individual, it’s the way that I live my life- a black woman who grew up in a predominantly white background and I see a broader spectrum of the world. I’m married to an Irish German guy, my kids are black Irish and I think for me transcultural, the living definition, is in my two sons. We like hip hop, we like techno, we mix it all up and we don’t just define ourselves by ethnicity and more so by experience and exposure.”

It’s this approach that makes TRUE a different agency, and somewhat of a risk-taker. African-Americans and other multicultural groups aren’t portrayed within the usual trappings of what Valencia describes as “dancing, shiny, happy black people.” The difference within TRUE is that “it’s harder and scarier and more risky to do work that crosses over,” she says. “You have the risk of having your clients say to you- ‘what’s black about it’ and it’s very risky, but it’s the place where we live. That’s been our model and our creed and I didn’t have this perspective until I started working at TRUE.”

Several professionals have pitched in to provide some insight into what these figures mean and why it may be perceived that the future of web advertising really is, or is not, in the UK’s hands. The supposed domination of the Web by Britain, and the differences that may attribute to any type of U.S. and U.K. online advertising comparative, must be taken into consideration when analyzing both countries’ online marketing efforts.

No doubt, there are differences between the U.S. and the U.K. online advertising methods, but it may also be a bit premature to call Britain a leader in online advertising just yet. Yes, the NYT article quoted Yahoo chief Terry S. Semel as saying “the US is so behind…it’s certainly lagging the UK by at least a year or two.” But whether that is true is up for questioning and with two industry leaders from the UK and the US, informed comments on who is leading the market and by what standards can possibly be formulated.

Surprisingly, all interviewees were in somewhat of an agreement to disagree with the findings, including Dave Smith, Managing Director for London-based agency New Media Maze, who couldn’t see how the UK could lead the world in online advertising but embraced the possibility. Former head of the IAB, Greg Stuart, couldn’t continue our interview without solid proof and Ian Schafer of Deep Focus, an interactive agency that services the business and entertainment areas, had trouble agreeing with this as well. So what is the difference between the UK and the US within online advertising practices and why do some professionals believe that the US can learn a lesson or two from Britain?

Let’s begin by comparing the ongoing trends in the UK and the US. According to Dave Smith, “The main trend is towards a greater degree of interaction. Ad units are getting a lot cleverer and a little heavier as well. So that’s the main trend, that you’re able to do more within an ad unit.” On the U.S end, Ian Schafer points out that the trend within the United States is veering towards the social media area. “Everyone’s become smitten and for good reason with social media, you know the whole ‘Web 2.0′ cliché. It’s led to sharing, to linking and even in some cases, shows just how visible the spread of a creation can happen.”

As the United States consumes itself with social networking, Britain is focused on a different type of medium and that is mobile marketing. According to Dave Smith, “it’s huge” in the U.K., as is the use of Skype, while Americans continue with traditional cellular service and have only begun to see the mobile expansion with phones that have online/interactive capabilities. But mobile marketing strides alone couldn’t make the U.K. a leader in online advertising. As Greg Stuart bluntly stated, “That’s the most ridiculous thing I’ve ever heard,” which is why our interview stopped there, and potentially for good reason.

Upon speaking with consultant Erin Patton with the Mastermind Group, and Publisher of AOL Black Voices Alvin Bowles, and taking a closer look into the interactive realm of multicultural advertising, it is clear that as this audience grows, advertisers and agencies need to do more to acknowledge that this demographic is here and that their dollar is important. Although this demographic was a bit sluggish in the wake of online participation, there has been consistent growth. Even in 2005, African Americans had an online user base of 18.4 million and in 2006 African American and Hispanic internet usage was nearly equal to that of the general market. Considering such growth, it’s time for the industries ad spending dollars to finally make a match. Welcome to the age of multicultural marketing.

So, it’s no secret that online usage and the advertising that comes with it are on the rise. What this means for agencies and marketing professionals, however, is that the way multicultural audiences are factored into ad budgets may also have to change. Alvin Bowles heads all of the sales efforts at AOL Black Voices and has seen the rising trend of the multicultural audience. According to the December 2006 comScore Media Metrix report, just last year when Bowles joined AOL Black Voices, the website brought over a million visitors a month, while today, the African-American hub accounts for 3 million users per month.

“There’s tons of growth. In a sense, there’s astronomical growth within the multicultural audience online,” states Bowles. Accordingly, Erin Patton of the MasterMind group concurs that not only is there growth, but “hip-hop’s generation X has matured and evolved the influence that was once willed through traditional categories and it has now broadened.”

Furthermore, through his research, Patton has found that the “growing influence of multicultural consumers in the general market…at this point is clearly becoming the new general market for this generation, which is growing up without the racial parameters or boundaries.” Part of the lack of online acknowledgement may be attributed to the approach advertisers take when it comes to reaching this target. Most advertisers are still under the misconception that traditional media is the best way to reach the African-American community. Not suggesting that traditional media be decreased, Bowles calls it “not an either but an and conversation”—a conversation that agencies and executives and consultants need to begin having in order to achieve the brand loyalty that comes along with the multicultural market.

And with the multicultural market also comes a certain type of brand loyalty that is known, but Patton warns that brands may be taking this loyalty for granted, assuming that the dollars will just flow in. “It is a loyal audience, but it’s also one that places a high degree of importance and significance on brands that communicate to them through cultural and lifestyle nuances,” Patton affirms.