The video game industry is booming, and it’s expected to be worth $321 billion globally by 2026. In fact, the gaming industry is among the fastest-growing sectors of the economy, with over 3 billion gamers around the world.
Advertisers have been seeking new and innovative ways to reach their target audiences without disrupting the user experience, and in-game advertising is proving to be a successful channel.
Blending and integrating ad content into the games allows for a non-interruptive and seamless gaming experience which can leave users with a positive and long-lasting impression of brands.
Why Should Companies Consider In-Game Advertising?
Investing in in-game advertising allows brands to:
- Reach diverse audiences — in-game advertising gives brands the opportunity to get their message in front of diversified and specific audiences.
- Build brand awareness — using different mediums means getting a brand message in front of audiences across various channels.
- Differentiate from the competition — leveraging another channel allows brands to be present where their competitors aren’t.
- Engage with audiences — playing a game requires being focused and analyzing each element of the game. Therefore, seeing an ad blended into the game means that users are more likely to remember it.
- Precise data — having access to specific user data allows brands to align the message to the gamer and their interests.
- Explore different ad formats — integrating different ad formats into a game can help reduce ad fatigue and, more importantly, deliver a non-intrusive gaming experience.
What Are the Benefits of In-Game Advertising?
The in-game advertising industry undoubtedly has huge potential. According to research from Admix, media buyers will maintain and increase their in-game advertising spend over the next year. Moreover, 93% of media buyers intend to run in-game advertising campaigns by 2025.
There are several benefits of blending branded content into in-game environments for both users and brands.
Benefits for users: Game developers can provide users with an undisrupted gaming experience by showing native, in-game ads, e.g., on virtual billboards, rather than by showing intrusive and annoying ads similar to those found in display web advertising.
Benefits for brands: The main advantage of in-game advertising is that advertisers can increase brand awareness and engagement by showing ads to users in a natural and organic way without disrupting the gaming experience.
A study by Broadband provider TalkTalk found that in-game advertising resulted in:
- An increase in purchase intent — there was a 12% uplift in sales after users were exposed to in-game ads.
- Longer attention span— the average gamer’s attention equated to 29 minutes, which is a remarkable result compared to online advertising (web display and mobile display) of 17.5 minutes per thousand impressions.
- Higher dwell time — users’ average dwell time was 13% higher for the in-game ads than the industry average of 1.6 for online advertising.
- Greater interest — in-game ads were viewed by up to 96% of participants of the study and over eight in ten (84%) felt that the ads were suitable for the in-game environment.
How Has the Pandemic Accelerated the Growth of the Gaming Industry?
The COVID pandemic and lockdowns escalated the growth of the gaming industry as people were not allowed to meet in person because of the restrictions.
According to Nielsen research, 82% of global consumers played video games and watched video content during the height of the COVID-19 pandemic lockdowns.
People were looking for ways to both entertain themselves and maintain their social connections and stay in touch with friends.
The gaming industry is forecasted to maintain its recent rapid growth, with a PwC report predicting that it could be worth $321 billion by 2026.
What Are the Different Formats of In-Game Ads (IGA)?
Most examples of IGA are found inside mobile games for iOS and Android, but they can also appear in games played on computers and game consoles such as Xbox and PlayStation.
There are three main forms of in-game advertisements: static in-game ads, dynamic ads, and gamevertising.
Static ads are typically hardcoded in the game and represent stationary elements such as virtual billboards, posters, and banners. Once implemented into the game, they cannot be changed later.
Dynamic ads require active Internet connections so the ads can change as the player progresses through the game. Dynamic in-game advertisements provide advertisers with a great deal of flexibility, are easy to scale, and can be used to geo-target opted-in users.
In contrast to static ads, dynamic ads are displayed in a game and can be updated in real-time.
There are a number of different dynamic ad formats that advertisers can use:
- Interstitial ads are rich interactive ads that cover the entire screen during natural pauses in the game, such as breaks between levels.
- Native banners are similar to web banner ads, but they blend seamlessly into the background or banners inside a game to provide an unobtrusive ad experience.
- Contextual adsare delivered based on the user’s state at the time of serving the ad. Advertisers share a list of topics and keywords, which are later used by the algorithm to match the content, keywords, topics, and images.
- Rewarded ads reward users if they watch a full-screen ad for 15-30 seconds. They are often given in-game currency, extra playing time, more levels, etc.
- Playable ads are interactive video ads that can be played to users to preview the gaming app before users decide to download it.
Gamevertising represents building an entire game specifically for the promotion of a company, product, or service as a part of the game. Elements of gamevertising are embedded throughout the game, pointing to the singular brand that the game aims to promote.
The Use of Zero-Party Data and First-Party Data in In-Game Advertising
Any information game developers and marketers can collect directly from their gaming audience is classed as both zero-party and first-party data.
In many cases, the gaming experience starts even before the user initiates their first gameplay.
The process begins with setting up the account logging in to the game. It’s at this point when users are asked to share their:
- Preferences regarding the content that is going to be displayed during the game.
- Willingness to receive game tips and tricks in the game.
- Willingness to receive discount codes/coupons to partner companies.
Companies ask for this information to improve the user experience and use it at the appropriate moment in the game, e.g., when the user is stuck at some level or lacks the knowledge of how to overcome the difficulties. This data can also be used to determine what message should be shown on an interactive banner.
This type of information is known as zero-party data as it contains information relating to a user’s preferences.
On the other hand, first-party data is information that users share with the gaming company when creating an account and playing the game.
Examples of first-party data include:
- Email addresses
- IP address & geolocation
- Purchase history of ad-ons and items in the game.
Access to this enormous amount of first-party data and zero party-data provides gaming companies with a huge opportunity to build their own technology to better analyze, categorize and understand the various data segments, as well as manage and monetize their data.
Gaming is a different channel as it is interactive and live. Because it is so different from traditional advertising, it gives brands a huge advantage in creating campaigns that people might be motivated to engage with.
A user’s perception of in-game ads is entirely different from traditional banner ads on websites and in-game ads have a much less negative connotation.