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Love it or hate it, in-game advertising is here to stay. As the debate surrounding the new industry tos and fros among hardcore gamers, money is being made, advertising deals are being signed and virtual billboards are blazing a trail for US politicians. At the recent Games 3.0 conference in London, we caught up with Ed Bartlett, VP publisher relations Europe and co-founder of IGA Worldwide, Inc, the company at the centre of the in-game advertising revolution, to ask him how his work affects the games we all know and love.
VideoGamer.com: What’s changed since the last time we spoke, at the Develop Conference in Brighton last year?
Ed Bartlett: The big step obviously is Sony. We’ve worked with Sony to unlock the PS3 platform for in-game ads. We have our first titles live already. We have a multi year exclusive agreement with EA, starting off with Madden NFL and Tiger Woods and so on. Again, the games that we’re using are all where you’d expect to see ads, so we’re staying very true to our promise that we’re never going to over commoditise, which is great. Obviously that expands our reach considerably but also it puts the advertisers more measurably into the living room. With the PC products we have it’s hard to often argue that it’s above a certain percentage of people playing in the living room, whereas with the PS3 the majority is living room based, which is something, from an advertisers perspective they really like that.
VideoGamer.com: How hard a sell was it to get Sony on board the in-game ad bandwagon?
EB: When you’re dealing with global companies there’s always a lot of meetings that need to happen territorially and then try and link up globally and getting a consensus. However I think that Sony are a very progressive thinking company and I think they understand that, once they really got into the nuts and bolts and saw the amount of work that we do and the amount of work that would be necessary for them to be able to do it themselves, I think they understand that it’s a big distraction to them. And there are also a lot of advantages in aggregating with our network, so not just PS3, but also other properties, and that’s where it’s exciting from a brand perspective, to be able to come to one source, i.e. us, and to access lots of different games, lots of different platforms, competing publishers, competing products all in the same network, that’s actually a positive from an industry growth perspective. People don’t want to have to go to 10, 15 different agencies to reach a proven product. That would cause significant issues with the growth of the market as a whole. The same with publishers. You look at some of the bigger publishers and you think, ‘well why aren’t they doing it themselves?’. It’s the same reason, it’s a distraction to them, they make games, they market games, they produce games. Selling advertising as a network, it needs to be an independent source that aggregates lots of games, lots of platforms and then have some kind of measurability in the back end that’s consistent across all of those, and that’s what we provide.
VideoGamer.com: What games that aren’t out yet but will be out in time for Christmas will have in-game advertising?
EB: There’s a variety actually and on various platforms as well. So on PS3 you’ve got some big releases coming up, sports licenses, things like Need for Speed coming up soon from EA. We’ve got a very big game called Football Superstars, which comes along on the Trackmania Nations model where the core game is free to download and play, which is something we saw huge success with Trackmania with over nine million users, which allowed that game to be completely subsidised by advertising. Football Superstars takes that model one step further where the client is free to download, you’ve then got a subscription-based model for people who really want to engage, and then you’ve got item sales. We’ve already got some big advertisers in there like Puma and Reebok with branded stores where you can go in and dress your avatar and the core of the game is free and yet it’s very high quality, MMO, full freebie, that’s a big release for us.
There’s also Guitar Hero coming up, which is our first title with Activision, which doesn’t really need any introduction. It’s a huge franchise and again very relevant for brands and advertisers. Those three across the different platforms are going to be our main releases in Q4. And we’ve got Quake Live actually, which is the other big one. I don’t think there’s an official date for it yet. If that comes out in Q4 that would be another big hitter along the Trackmania Nations’ free to play model, which is something I think we’ll see a lot more of. I think we’ll see a lot more free to play games, a lot more ad subsidised content from retail games, and then the multi-tiered model like with Football Superstars, all those are pretty big trends within the industry.
VideoGamer.com: You mentioned you’ve been able to keep in-game advertising to games where it fits. Will that always be the case?
EB: I believe so. I think that from an advertiser’s point of view, if you look at what they’re trying to achieve, and the connection they’re trying to reach with a gamer, they understand that the magic, that kind of connection, can only happen if it’s something that’s well received by the end user. If it’s interruptive, if it’s invasive, then people are going to backlash against that and it’s having a negative affect on their brand. I think a lot of gamers, particularly hardcore gamers are quite worried about advertisers coming in and ruining their experience, but it really is true that these advertisers don’t want to corrupt their experience because it’s negative to them. So yeah I do think that’s the case. I think you’ll see some people experimenting with different ways of funding other products, so maybe you will have more interruptive video at the start of the game or something to completely subsidise more premium products, and I think some consumers are happy to accept that, but that will always be an opt in, it will never be something that’s forced upon you for a paid product. There are already people trying to experiment with free to play premium games with a very invasive in your face ad-funding model, and a lot of people are happy to sign up to it, and again that’s completely down to customer choice. But where we’re involved, being contextual and very sensitively integrated, it will always be that way.
VideoGamer.com: How will the in-game advertising work in Guitar Hero?
EB: Again it will be environmentally contextual. It will be in the arenas and stadiums. Those kinds of things, very much in line with the other stuff that we do.
VideoGamer.com: What kind of brand is interested in in-game advertising?
EB: Ultimately the advertiser wants to reach an audience, and what we’re seeing more and more happen is people less worried about the game they’re going into and more worried about the audience. And so as our network expands, I think we’re about 80 games now, what we can do is create verticals of genres and audiences so when an advertiser comes in, instead of just buying into one game that has that audience, we can put them across many games that have that same audience, so they get a much higher overall reach. So that’s one interesting thing. With games like Counter Strike, Need for Speed and Guitar Hero, we do get people asking for them by name, so we do get advertisers who want to associate with that specific game. But predominantly the model now, and again this is what I was saying earlier about Sony not doing it themselves, publishers not doing it themselves, is because we can offer that wealth of product and competing publishers and genres that allow us to create those different channels and ways of buying, that’s what’s driving the growth of the market.
VideoGamer.com: What was your opinion of the Barack Obama in-game advertising?
EB: It’s fantastic. It really validates the gaming audience as being a very valuable audience that’s taken seriously now. These people understand that these aren’t 12-year-old kids, these are voters, these are people that are going to shape the future of a country and they’re valuable people that should be targeted with campaign advertising. From a market perspective the fact that governments and potential governments and those kinds of people are now taking games and gamers seriously, It bodes very well for everybody’s future. You look at some of the things that happen in the industry with trying to get governments to do tax credits and subsidise, those things gamers don’t see but are critical to the growth of this sector in the long term. The fact that those types of people are now taking gaming seriously enough to pay for advertising within those games is good for everyone. It bodes a good sign for the future of video gaming.
VideoGamer.com: Is it something you can see the British government ever doing?
EB: It’s definitely possible. You’ve already seen the COI (the Central Office of Information) buying ads in games because they find it very hard to reach the youth demographic who are gaming. They do a lot of things putting story lines into some of the soaps, Hollyoaks and those kind of things. They have already done some messaging within video games. So it’s a definite logical step.
VideoGamer.com: Might advertising make its way into console dashboards, or PS3 Home perhaps?
EB: Technically we can. We’ve always focused on in-game mainly because for us the argument to the advertiser is, they’re playing the game and our message comes on screen to a certain size for a certain duration, so you can basically guarantee delivery, you can guarantee that somebody has seen that message. The problem with websites and those kinds of interfaces, they’re fairly transient, and you’re there for a different reason than when you’re in the game, you’re not engaged with controlling your character or anything, you’re transient, you’re clicking through and browsing. So we’ve left that stuff to web advertising specialists. And even the type of ads that we deliver are different. So within the game, creatives are fairly parallel with outdoor advertising. It’s image driven, it’s a strap line, it’s a product release message or it’s a brand building exercise. With the ads that you see on the websites they’re basically trying to get you to click through to make a transaction and so they have different effects, they come from different budgets. There is crossover and we’ve looked at and continue to look at bringing those types of opportunities into the network but the focus today is definitely purely on in-game because it’s a consistent argument for us to bring to advertisers. It’s higher value.
VideoGamer.com: With the credit crunch will in-game advertising continue to grow? Will gamers see it more and more in their games?
EB: I think at the moment there’s considerably more inventory available than there are ad dollars, and so the room for growth is phenomenal. Last month we saw revenues that were about a third of the entire last year’s revenues. With the credit crunch gamers are spending more time at home with video games and advertisers are looking for more measurable media. We are the most measurable cost-effective way of delivering what we call above the line messaging, so like print, TV, outdoor, those kind of image based campaigns. So we’ve seen a huge up shift in brands wanting to A, reach the audience that’s gaming and B, engage with measurable media. People won’t notice a difference because, you still see the ads there now you’re not going to see more ads because the inventory is set in stone, we decide the ads at the development stage, where they go within the environments, you’re not going to suddenly see lots more ads popping up. We’re just filling more of the inventory over the life cycle of the game, basically. And also more territories. We’re opening offices all around the world, we’ve just opened a French office, we’ve got a Germany office, a UK office, we’re doing deals in Spain, Poland and Australia. That’s the other thing, we’re unlocking other territories where there’s gamers and where there are users.
VideoGamer.com: Do you see a future where triple-A games might be totally funded through in-game advertising and therefore free to buy?
EB: I think from a console perspective, for a big triple-A console release I think that’s a long long long way off, if ever, simply because, things like the unit fee costs, the royalty costs to the hardware manufacturers alone, it’s very significant versus the amount of revenue that in-game ads are providing. For PC products, we’re already doing it. We’ve already taken a relatively niche product in Trackmania Nations and made it record-breaking, it’s in the Guinness Book of Records. So we’ve proven that. I think one of the things that people need to be cautious of when they’re deciding their business models is there are a lot of business models out there that have free-to-play, almost every VC will tell you that a significant amount of their business pitches now have an ad-funded model. The reality is there’s only so much ad funding revenue to go around and so not everybody is going to be able to get into that. Trackmania was successful because it just had the perfect blend, it was online, it was community driven, it had really casual, easy to pick up gameplay that was very addictive and hard to master and it was completely free and available. That had a perfect mix. Football Superstars will also do well for that same reason. It mixes casual and hardcore, MMO and virtual world, and there’s a tiered structured business model to how you play and subscribe. Certainly in the next five or ten years I don’t think you’re ever going to see a triple-A console product fully subsidised or ever.
What’s your take on in-game advertising? Let us know in the comments section below.
Burnout Paradise
- Platform(s): Nintendo Switch, PC, PlayStation 3, PlayStation 4, Xbox 360, Xbox One
- Genre(s): Arcade, Racing