The Video Game Advertising Boom

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The Video Game Advertising Boom

In-game advertising uses video games to deliver marketing messages.  The first advertising placed within a video game occurred in 1978, when Scott Adams inserted an ad into Adventureland for a new game that he was introducing called Pirate Adventure.  The first ads were static images that were hard-coded into the game itself and could not be changed. 

With the advent of fast Internet connections, dynamic ads were developed that could be changed remotely, on the fly, by the advertiser.  They could make modifications depending on where the gamer was located, what time of day it was, and other factors.  In addition, advertisers could solicit comments from players to improve the quality and specificity of the ads. 

In some cases, the ads came as a part of the game.  For example, on some games, the players would find themselves stuck looking at an ad until they could figure out how to get past it to increase their level of play.  So ads became a tool for improving the design of the game as well as a selling tool.  In 2008, for the first time, a candidate for the United States Presidency placed an ad in a computer game when Barack Obama appeared in Burnout Paradise from Electronic Arts. 

With increasing broadband speeds and the ability to stream graphics in real time, virtual world game platforms were introduced, and advertisers quickly jumped on the bandwagon to buy up real estate and establish a continuous online presence there.  In addition to advertising products, those companies can test-market new ones in virtual reality before having to spend the money to manufacture them. 

In Second Life, for example, Starwood Hotels & Resorts Worldwide built the Aloft Hotel in order to get feedback from guests long before the real hotel opened.  American Apparel, Lego, Toyota, Nissan, and Adidas have all advertised and test-marketed products in Second Life.  Another virtual world, called There.com, hosted a Nike ad campaign in 2003, and Everquest2 included an online command that could be used to place an instant order with Pizza Hut.

This is especially important since the vital 18-to-34-year-old male demographic is spending much more time online than in front of the television these days.  A study conducted by Yankee Group showed that television viewing by this group had fallen 7 percent, specifically because of video games. 

In-game advertising was estimated to be a $56 million business as of 2005, and is expected to grow to $1.8 billion by next year.1  Moreover, when games include ads, the game publishers realize an extra dollar or two for each unit they sell...

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