Advertising in Games Conference

Yesterday I attended the Advertising in Games conference here in New York.  Most of the conference was off topic for virtual worlds enthusiasts, as there were very few references to MMOGs. However, it offered interesting insight into the current ad agency mindset and I enjoyed catching up with speaker Ian Bogost from Watercooler Games. Read on for a brief summary of common conference themes and a few metrics gleaned from the presentations.

Recurring themes at the conference included:

• There was a palpable sense of excitement on the part of agencies that clients are finally recognizing market opportunities in the gaming space. General consensus was that it’s a lot easier to convince clients to put part of their ad budgets toward gaming these days.

• Conference speakers focused primarily on the 18-34 year old male demographic. According to Mitchell Davis, CEO of Massive Inc., there were nearly 30 billion hour of gameplay in 2004, with nearly 90% of players being 18-34 males.

• There was general recognition that successful campaigns must always be contextual and sensitive to the quality of the player’s gaming experience. Specific acknowledgment that hardcore gamers will be particularly resistant to interruptive advertising so this should be avoided at all costs.  Common view was that it wouldn’t make sense to place in-game ads in fantasy MMORPGs. Direct quote from Nicholas Longano, Chief Marketing Officer, Massive Inc.: “World of Warcraft is not a game you would ever want to see advertising in. As a responsible industry we would never serve ads into a game unless it makes sense.”

• Many speakers called for the development of standards of measurement but also admitted that standards will be particularly difficult to develop in this interactive medium.

• There was a fair amount of debate about which types of in-game advertising are most effective/valuable, ie. billboards vs. product placement vs. advergaming.  Most agreed that it depends on the brand, the game, and what the client is trying to accomplish. Billboards are less interactive but can accommodate a wider variety of brands.

And now, some tidbits from a few of the Powerpoint presentations:

From Jonathan Epstein, Agent, Games and Interactive Group via DFC:

$500M+ in US online game advertising by 2009

Worldwide revenues of 1.26 billion by 2009

70 billion hours of online play by 2009

PC gaming represents 82% of the time spent in 2009

Usage growth is highest in the moderate gamer segment which accounts for 44% of the time spent by 2008.

From Anita Frazier, Entertainment Industry Analyst, NPD Group:

The Top 5 game genres, for the past 3 years, are:

1 - Action

2 - Sports

3 - Shooter

4 - RPG

5 - Racing

Most titles (80-90%) are intended for males

Southern US region accounts for 34% of US gaming sales

Households making 50-100K dominate (37%), indicating that gaming is a middle to upper middle class endeavor

56% of all unit sales in 2004 were for E-rated titles (“Everyone”)

From Mike Goodman, Senior Analyst, Yankee Group:

There are 112 million gamers age 13 or older in the US. By year end 2008 this number will grow to 148 million.

Comments

[Flatfingers]

Ah, marketing data goodness. :-)

Some quick reactions:

> PC gaming represents 82% of the time spent in 2009

?? Implying that consoles and handhelds (including phones) will host only 18% of all electronic gaming time by 2009?

Or was "PC" being used as a synonym for "electronic" in this presentation?

> Usage growth is highest in the moderate gamer segment which accounts for 44% of the time spent by 2008.

This may be of interest to MMOG designers, as it would appear to support the belief that features should be designed to appeal to the "casual gamer."

> Southern US region accounts for 34% of US gaming sales

Interesting! The southern US is also the most politically conservative part of the US -- is there a relationship here that could be a useful factor in designing or marketing games?

Do today's games sell well there because of the culture? Or in spite of it?

> Households making 50-100K dominate (37%), indicating that gaming is a middle to upper middle class endeavor

Isn't this fairly direct evidence for Matt Mihaly's claim (in "Burn, Baby, Burn") that computer gaming is a pasttime of the leisure class (and therefore not a terribly effective means of liberating the oppressed masses)?

Just some stray thoughts....

--Flatfingers

[darin]

Yeah right:

Chief Marketing Officer, Massive Inc.: “World of Warcraft is not a game you would ever want to see advertising in. As a responsible industry we would never serve ads into a game unless it makes sense.”

This is from a person in an industry that serves ads on cable tv, a service that I pay for, and for movies, where I get to watch 20 minutes of ads for a movie I paid to go see, and on dvds, another thing I paid to watch.

Advertising is everywhere, and if it's not it will be soon.

Just like some web sites, you may have to watch a commerical before you can get to the came content. Or who to stop them to put a little logo in the corner like they do for sports on "free" tv.

Or they can try the free stuff approach, i.e. we created a sister site for the game (that is loosely integrated), where you can view cheats, maps, or items. But this sister is sponsored by the advertising.

The key is for them to introduce it gradually. Say the add it to online game where you logon on have to authenticate, so instead of watching "waiting to authenticate message" you see a spot showing off the latest ipods.

Then once you get used to it, then they keep adding and adding till one day you wake up and realize how it *used* to be.

Heck if they can pitch to children in elemetary school and get away with it, advertising in a game should be not a problem.

BTW, have you seen how much product placement is going on in the TV & movie industry. Used to be hard to get those, i.e. producers afraid they may alienate their real advertisers (those that put those little clips in between parts of the show), now it's just business as usual, you don't know when the commerical ends, and the show begins.

[Carnildo Greenacre]

And how much advertising was there in the games conference? :-)

[Samantha LeCraft]

Some of the statistics reported seem... odd to me, to say the least.

There were nearly 30 billion hour of gameplay in 2004, with nearly 90% of players being 18-34 males.

Hours of gameplay in what kinds of games? Are they counting Popcap and online poker type sites as well? Or only PC and console titles? What about games played on PDAs and cell phones? What about playing Solitare during your coffee break? How did they decide what type of gameplay got counted, and how did they arrive at these numbers?

PC gaming represents 82% of the time spent in 2009

82% of time spent? What? I have to assume that this means something like "82% of time spent gaming is spent on PC gaming" rather than "82% of the total hours in the day is spent on PC gaming" or even "82% of total time spent on entertainment is spent on PC gaming".

But even if this is suppose to mean "82% of time spent gaming will be spent on PC gaming in 2009", that number seems nearly impossible to me. Are they saying that games on consoles, handhelds, PDAs, and cell phones will be nearly non existent by 2009? Haven't we heard repeatedly over the years that PC gaming is dying in favor of console gaming??

If, as Flatfingers suggested, "PC gaming" is here being used to mean "electronic gaming", what does the other 18% represent? Board games, pen-and-paper games, and trading card games..?

Any more information about what these numbers mean more precisely and how these numbers were arrived at would be very useful, I think.

[Samantha LeCraft]

As an interesting counterpoint, Yahoo News yesterday had an article, here, that quotes Mitch Davis of Massive Inc. as saying that in-game advertising will top $1 billion in the US by 2010. Yankee group is also sited saying that in-game advertising will reach about $800 million in 2009.

[Matt Mihaly]

Flatfingers wrote:

>Households making 50-100K dominate (37%), indicating that gaming is a middle to upper middle class endeavor

Isn't this fairly direct evidence for Matt Mihaly's claim (in "Burn, Baby, Burn") that computer gaming is a pasttime of the leisure class (and therefore not a terribly effective means of liberating the oppressed masses)?

No! This is evidence that gaming is the domain of the insanely rich, not just the leisure class. If you have access to the hardware needed to play most video games on a regular basis and the leisure time required to do so, you're already part of the elite of a world where clean water is still one of the biggest problems for much of it. If you live in American culture, where you can go down to your local library and use the internet, you're well-off by global standards even if you can't afford internet service yourself.

I look at 'rich' on a global scale. Every one of us using this forum easily falls into that category. We're all the elite on a socio-economic scale.
--matt

[Richard Bartle]

darin>Advertising is everywhere, and if it's not it will be soon.

Thank goodness for the BBC.

Richard

[Augmento]

i am still waiting for the fantasy game where the quest reward are boots of Nike that increase your run speed with a 1 minute cut scene of your character putting on a pair of shiny nike platemail boots complete with logo.

i know its just around the corner. it is in fact exactly the kind of the thing that i would expect from sony and everquest II.

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