Ad space invaders

IGA's Ed Bartlett tells Brian Tarran how research is helping transform video games into a serious advertising medium

Anyone still doubting that videogames are now a mainstream entertainment media to rank alongside TV, film and music need only have picked up a newspaper over the Christmas holiday. Acres of news print were devoted to covering the launch of Nintendo's new Wii console, Sony's blockbuster Playstation 3, and the impending three-way fight with Microsoft's Xbox 360 to see which would become the dominant 'next generation' platform.

All this publicity is proving handy for one man – Ed Bartlett. As head of Europe for in-game advertising agency IGA Worldwide, Bartlett is charged with selling videogames as a viable advertising and brand-building platform to some of the biggest media buyers and brand owners in the world. He's spent the last three years "educating advertisers". This year, all that work looks set to pay off.


Under pressure
The unprecedented level of press attention focused on the new console launches this Christmas was undoubtedly a boon for the fledgling in-game advertising market, however the countdown to take-off began long before Nintendo's weirdly-monikered creation grabbed the attention of the public at large.

Bartlett sees a variety of factors in play here. "Advertisers have been looking at other media apart from their traditional media – particularly TV – for quite some time, simply because they've not been getting the return on investment," he says. "There are concerns about wastage. And when you couple that with fragmentation… it's not that easy for advertisers these days."

Games developers too, are now more receptive. Bartlett – a former developer himself, working at highly-respected UK codeshop The Bitmap Brothers – admits they are suspicious to begin with. "But game development costs have gone through the roof," he says. "When I first started in the sector 15 years ago you could make a game for about $200,000. Now for even a simple game, you're looking at probably $2-$3m. A multi-platform next-gen title with a big ad campaign and everything – you're looking at $10-15m.

"The problem is that retail margins are being squeezed – there's a lot of high street competition – and margins are just going down and down and down. I saw a report recently that said games have only a 30-40% chance of breaking even, which is quite scary. You look at the shelves and wonder why every game is a sequel, but people can only afford to take risks creating versions of games that have already been successful. What we're trying to do with developers and publishers is give them a new revenue stream, in some cases worth $2 a unit – a big chunk of profit for them. It enables them to take creative risks on products that perhaps they couldn't before."

These pressures may have woken up advertisers, developers and publishers to the possibilities of in-game advertising. It is research, however, that has been instrumental in convincing brand owners to invest in virtual ad space.


Out of the shadows
Research's greatest contribution perhaps is in proving that gaming is no longer the preserve of spotty teenage geeks. In the early days this may have been true, but the geeks of old have grown-up and they've taken their pastime with them. A few years previous, TV advertisers were fretting about the vanishing 18-35 year-old male audience. Accusatory fingers were pointed at alleged deficiencies in ratings systems, until research showed that valuable demographic was now devoting more time to playing videogames. Speaking in 2005, Nielsen Interactive Entertainment's Andy Wing said videogames commanded 18-34 year-old male audience premiums of 6-7 times the average prime time television CPM. "It's easy to see why measurement has become such a huge priority for the industry," he said.

In 2006, work began on developing ways of measuring who was playing what and for how long. Interpret – a trio of former Nielsen Entertainment executives – was first to market with its gamer panel, winning the support of IGA. For Bartlett, this was a necessary tie-up: "When people are playing retail games, its an out-of-the-box experience – you put it in your 360 or Playstation, or whatever and you play the game. There's no way of them then filling in a form to say who they are. So we have to use panel-based systems to be able to find out who these people are specifically."

But aside from knowing who's playing what, advertisers want to know how many eyeballs they're getting for their money. Reach had been an issue in the past, says Bartlett. "Previously, the only way to advertise in a game was through hard-coding on to a disc. The problem was that even the bigger-selling games would maybe only sell two, three, four, five million copies. That may sound a lot, but when you consider that's split across the globe, and across a broad demographic, when you come to target, say, a 12-15 year-old male in one particular country, one game won't reach enough people."


Getting connected
To solve this problem, IGA and rivals such as Massive (now owned by Microsoft) developed dynamic networks which take advantage of always-on internet connections to place, change and update advertising creative within games. These networks have opened up more advertising possibilities, beyond simple product placement or sponsorship. Advertisers can now buy runs on virtual billboards or vending machines, or stream video ads during loading screens, while growing acceptance of downloadable content means advertisers can offer gamers free levels, vehicles or equipment for their favourite titles (see boxout).

IGA's network tracks what's being played and where, and with Interpret's panel providing the who, "We're able to geo-target and demographically-target people," says Bartlett. "We're de-risking the process for advertisers." In the days of hard-coding, he admits, it was a gamble as to whether a particular game would be a success or not. Now, he says: "Its less a case of an advertiser coming in and saying – in Red Bull's case – 'We want to be in Worms 3D or Judge Dredd'. Now it's a case of them saying, 'We want to reach 15-24 year-old males in the UK in the month of March', and us looking at our network planner and saying 'This is the reach we are going to have for that demographic', and that may go across five or six titles."


Play girls
Still, many advertisers are yet to be convinced. "You do still get brands that are incredibly risk-averse," says Bartlett. "They'll say they want to see more research, and so what we'll do in many cases is actually bring them in to bespoke research projects. We'll do a very small test run, and do a pre- and post-campaign research project around that." However, it's not just the youth-orientated brands pledging their support for the medium.

"We're seeing a lot of interest in the middle-aged female gamer, because there are an awful lot of housewives who are playing online casual parlour games – card games, solitaire, these kind of things," he says. "When we first started out it was very much this 18-35 year-old sweet spot, because that was the demographic that had left TV and were becoming harder to reach. Now, we have that reach covered and we are looking to expand into other areas, of which [female gamers] are a significant one."

IGA and its ilk have succeeded in laying the groundwork for a potentially massive new ad medium. Bartlett expects to see up to $350m spent on game-related advertising this year, from an estimated $100m last year. Meanwhile, tech research house ABI expects the video game advertising market to be worth close to $3bn by 2011. Truly, the geek shall inherit the earth.


BOXOUT: Getting the message across
There are numerous examples of advertisers taking advantage in the gaming world. Some of these early forays into virtuals world have proved more successful than others...


Drink to success
Red Bull and Worms 3D – one of the first times product benefit has actually shown through in a product placement. Two teams of loveable, cartoon worms compete to wipe each other off the face of the planet with an assortment of heavy-duty weaponry. Players could feed their charges cans of Red Bull to top up their energy levels.


Map of the stars
Discovery Channel and Gears of War – Futuristic war game GoW is currently the most popular multiplayer game on the Xbox 360's online service Live, but players have complained about a lack of maps on which to battle their friends and rivals. Players were given two free maps to download last month, thanks to sponsorship from the Discovery Channel's Future Weapons programme.


All gummed up
Airwaves and Splinter Cell: Chaos Theory – You're a secret agent, about to embark on a stealth infiltration mission. Alert the enemy to your presence and you're dead. To keep you out of danger, you're kitted out with a range of hi-tech gadgets… and chewing gum to help you "breathe easy". This brand tie-up was, for many players, just too hard to swallow.


Burgers to go
Burger King and Fight Night Round 3 – Match replays "brought to you by Burger King" arguably added another layer of realism to the stunningly life-like boxing sim. However, the Burger King's appearance as a ringside trainer broke the illusion somewhat.

February | 2007