Necessary Evil: Advergaming Aspirations

There was a time when advertisers could buy into any kind of advergame they chose, as long as it was of the hard-coded, product placement variety. For example, when Sony Ericsson wanted to tout its new smartphone, it paid Ubisoft to have Sam Fisher, the hero of Tom Clancy’s Splinter Cell Pandora Tomorrow, flip open a P900 mid-game. But games that typically take 12 to 18 months to develop are not necessarily the best vehicles for advertisers who develop campaigns around, say, the new Spider-Man movie or the latest CD. Unless, of course, the in-game advertising can be changed dynamically to run for just a month or even a week or two. Last month, New York-based Massive Inc. launched its new network, designed to serve ads onto in-game billboards for whatever length of time or frequency the advertiser wants. In effect, it’s like buying commercial time on TV. “Advertisers want to buy videogames in the same way they buy other media,” explains Massive’s CEO Mitch Davis. “They want to be able to change the creative, run campaigns, and measure reach and frequency.” Massive sells ad time based on 15-second units. “If you’re whizzing around a track in a racing game,” says Davis, “you might see an ad on a poster for one second, 15 times. Or, if you stop in front of the poster and it’s on the screen for 15 seconds, that’s one ad unit.” Davis admits the rates are high—between $20 and $30 CPMs (cost per 1,000 impressions). That’s fine for advertisers who are satisfied with having their message on a billboard, says Dave Madden, executive vice president of sales and marketing at Wild Tangent. “But, for many brands, that’s not the level of integration and depth of customer relationship they’re looking for.” Instead, the Redmond, Wash.-based developer custom publishes branded advergames to advertisers’ goals and specifications. For example, Wild Tangent built a game called Race The Pros in which co-producer Fox Sports pulls the times from each Friday’s NASCAR qualifying races and pumps them into the game, which can be downloaded from the Fox Sports web site and is promoted during every NASCAR race. Throughout the week, gamers can race against those qualifying times in one of two vehicles, both of which are replicas of actual Dodge-built NASCAR cars. “What you get is a living, breathing advertising campaign for Dodge, which has done both a broadcast and a game-buy with Fox,” says Madden. “But the consumer isn’t aware of any of that. All the gamer knows is that he’s getting a really cool, free, console-quality racing game.” Coincidentally, Race The Pros has an element of dynamic product placement of its own, similar to that offered by Massive. Before gamers can play, they need to key in their zip codes. Then, as the player’s car speeds around the NASCAR track, Dodge updates the ads on the billboards, but not with just any promotion. Based on the zip code, Dodge inputs local advertising for the dealer nearest the player’s home. “Let’s not kid ourselves,” says Madden. “The experience of playing that sort of Dodge racing game vs. glancing at a billboard in somebody’s football game is a totally different experience.” In general, that experience costs an advertiser seeking to build a custom game between $250,000 and $500,000 for game development that takes three to five months. “That’s what it might cost for one 30-second spot on a prime-time TV show, not including the cost of filming the commercial,” says Michael Goodman, senior analyst at The Yankee Group. “We’re talking about a terrific return on your investment.” According to Goodman, the growth in advergaming results from, among other things, advertisers not feeling they’re getting their money’s worth on TV. “TV ratings are declining and digital video recorders enable you to skip the commercials entirely,” he says. “Advertisers just aren’t getting the bang for their buck that they used to. Meanwhile, there are 108 million people in the U.S. playing videogames. It’s a huge market.” In a recently released report, Goodman tallies the advergaming market at about $79 million: $10 million for in-game product placement plus $69 million for branded advertising, for example, Wild Tangent’s. He anticipates that by 2008, in-game product placement will grow to $92 million while branded ads will leap to $259 million. “The ad money will provide publishers with an additional revenue stream,” he notes, “which is just the sort of thing publishers need at the moment. The cost of game development has skyrocketed, and this is still very much a hit-driven business; only 20 percent of games ever break even.” [Necessary Evil is a monthly news opinion column that runs in Game Developer magazine. This column was written by Paul Hyman, who has written about the game industry for more than a dozen years. Reach him at [email protected].]