In-Game Advertising – Gaming through the economy

In-game advertising isn’t something new it’s something we’ve been seeing since the first generations of video games.

Did you know that the first product placement in a video game dates from 1978? Sound’s crazy right? Well, today we are going to answer some of your questions about in-game advertising.

What is in-game advertising?

In-game advertising is the placement of products inside a video game to reach the audience as it is done in movies or cartoons. In other words, it is how video games are used as an audiovisual medium to sell a product or service.

Think of it this way, the Buzz-Cola you see in The Simpsons is the same as the Nuka-Cola you see in Fallout. That is to say a form of advertising through Coca-Cola analogy. Of course, not all in-game advertising media are so subtle, for example, we have Pepsiman, which goes far beyond being an explicit message. Besides, some games will just throw ads at you every once in a while.



Advertising can be subliminal or direct, only a single reference to a product may trigger a reaction or a memory of a brand that accomplishes the advertisers’ goal. Not everything is a paid advertisement however. Some AAA developers will reference real-world products without being paid by the company they are referring to. This is done mostly to bring the world they created in touch with reality and not to do product placement necessarily.

On the other hand, some advertising can be straightforward, like a company renting space inside a game world for their brand. Think of Louis Vuitton partnering with Riot Games to create skins and merchandise for Worlds 2019, or maybe EA games promoting Need for Speed inside the Battlefield 4 client. Ads in gaming can be as diverse and complex as much as the company that is paying for them is creative.

Now that you have an idea of what in-game advertising is, let’s talk about how it works.

How does in-game advertising work?

Okay speaking from the financial point of view, the objective of in-game advertising is to drive sales.

With this said, video games get sponsorships as well as funding from companies that are benefited at the moment when their brand. In a very subtle way, we have ads added to the audiovisual spectrum of the title.

There are various ways in which these trademarks are registered within video games:

Dynamic in-game advertising

Static in-game advertising

Advergaming

Let’s talk a little about these.

Dynamic Advertising

The dynamic means of advertising in video games are those that require a little extra programming and that varies according to their results to all parties involved.

This type of advertising is usually found in advanced video games that usually require an internet connection.

For the advertiser, there are certain benefits. You see, this type of Ads allows them to keep track of how much impact each campaign has at the marketing level. Do you want in-game advertising examples? Think of Mastercard renting Summoner’s Rift Arena Banners inside League of Legends or esports betting sites renting banner space inside CS:GO maps at tournaments.



Static Advertising

On the other hand, there is static advertising inside video games, these are pre-programmed references that cannot be changed over time.

Fictional brands that are part of the history of the game – like Umbrella Corporation for example -, big ads in cities that can’t be changed, or even that little red soda can you could kick around town in Megaman Legends 2.

This type of advertising is usually seen in games that are lighter in terms of memory consumption, or that simply do not require an internet connection making it harder, or even impossible, to make any change.

Consequently, static advertising in video games depends on the game title and can be expensive. Besides, it does not allow the advertiser to follow up on how much their campaigns are developing as easy as dynamic ones.

Companies will still chip out big bucks to have their brand featured in a AAA title. Just imagine how much racing games are making from car manufactures.

Advergaming

Finally, we have Advergaming. The final boss of platform-adapted marketing occurs when the platform is fully used to send a message.

Cases like Chipotle Scarecrow (Chipotle), Book of Deviants (Scion), and Pepsiman (Do I have to?) are the best examples of Advergaming that come to mind.

Thus, with advergaming, brands jump over any barrier to directly create video games that “are advertising”.

This, of course, is expensive. Nevertheless, it is a strategy that allows companies to both track and update any data if they have to.

Besides, this way companies make sure that players will have their brand on their minds while playing with this new product.

Nevertheless, the disadvantage, in this case, is that the advertiser has to focus on a new product from scratch “his brand’s videogame” which involves a huge load of work and, of course, the risk that the game turns out to be a complete failure.

Read also: Hiro Capital aims to stimulate growth of esports and gaming in Europe

How much does in-game advertising cost?

Depending on the type of business you run you may want to invest in in-game advertising and whether you’re a transnational soda company, a midsized automobile brand, or a small merchant with a new junk food chain, there is a type of in-game advertising for every budget.

Here we somehow break the budgets for you:

Advergaming :

It is probably your most expensive option.

It involves a prudent workload.

You would need a variable budget of between 15.000$ and 100.000$ to create a decent game.

Static in-game advertising :

It can also be an expensive option.

It is not you who will be dealing with the marketing or the game as a product.

A budget, depending on the title in which you want to integrate your advertising, can range from 25.000$ to 500.000$.

Dynamic in-game advertising :

In-game advertising Mobile is the cheapest option because you pay according to a CPM (cost per 1000 impressions).

Usually, this is the most common type of Dynamic in-game advertising.

It allows several brands to target several types of demographics based on specific game targets.

When it comes to budget, these go anywhere from 5$, as you can establish a goal and a campaign limit when using them.

Are in-game advertising campaigns actually successful?

Well, by looking at the numbers they sort of “have to” to be implemented by giant brands. Nevertheless, the range of success is pretty much depending on the success of the game itself and the accuracy to which the company sets the target. Imagine how much time is spent on LoL daily by simply playing or watching. Even if a fraction of the in-game branding drives a brand forward, its worthwhile. There is plenty of esports games with massive audiences that rely on in-game advertising or ads during broadcasts. There also must be a solid return of investments, since companies have been flocking to gaming and esports more and more with their marketing budgets.



Additionally, ads in mobile games are a whole different beast. All of the in-game advertising tricks we already mentioned and more guerrilla tricks are used by mobile games developers. You might even get a popup for an extra live in your game, as long as you watch a 15 second ad. From simple games like Candy Crush to mobile esports games the mobile gaming stocks are on the rise and so will advertising and ad revenue.

A big flush in the advergaming space was “Book of Deviants” by the brand Scion which despite an aggressive –and bizarre- the free-to-play title did not make much of an impact.

There are also hundreds of successful campaigns in less risky options. But if you want to see big numbers take a look at this infographic: (The Infographic is from 2019 but still relevant)



Leaving the giants aside, trademarks such as Unity –Android game design platform- lead the Ad-sense revenue. Talking about Unity, they united forces with Google, allowing companies to expose their ads in thousands of games.

In fact, according to a Tapjoy mobile user report, almost 70% of smartphone users in the US play games on their phones.

To Sum Up

As you can see, there is a huge reason behind the answer to “Why do games have ads?”. We “intellectuals” call it money. A company like BMW partners with top esports teams in order to promote its brand and drive sales, not cause it looks cool. Well maybe cause it also looks cool, but, esports advertising and in-game branding are at an all time high and are even increasing in scope. Do not be surprised if you are soon swamped with all sorts of product placements in your gaming and viewing experience.

The videogame industry keeps growing. Related markets such as esports and esports betting, and in-game advertising grow as well. This, allows product placement to reach millions of gamers/users worldwide.

After all, videogames are now one of the biggest markets around!