In-game advertising (IGA) is advertising in electronic games. IGA differs from advergames, which refers to games specifically made to advertise a product. The IGA industry is large and growing.
In-game advertising generated $34 million in 2004, $56 million in 2005, $80 million in 2006, and $295 million in 2007. In 2009, spending on IGA was estimated to reach $699 million USD, $1 billion by 2014Arif Durrani (2009-05-26). "Screen Digest forecasts $1bn boom for in-game advertising". Brandrepublic. http://www.brandrepublic.com/News/908125/Screen-Digest-forecasts-1bn-boom-in-game-advertising/. Retrieved 2011-04-14. and according to Forbes is anticipated to grow to $7.2 billion by 2016.
The earliest known IGA was the 1978 computer game Adventureland, which inserted a self-promotional advertisement for its next game, Pirate Adventure."The Making of Adventureland". EDGE (162): 104–107. May 2006.
IGA can be integrated into the game either through a display in the background, such as an in-game billboard or a commercial during the pause created when a game loads, or highly integrated within the game so that the advertised product is necessary to complete part of the game or is featured prominently within cutscenes.Greg Boyd, Vejay Lalla (2010-02-11). "Emerging Issues in In-Game Advertising". Gamasutra. . Retrieved 2011-04-17. Due to the custom programming required, dynamic advertising is usually presented in the background; static advertisements can appear as either.Helen Leggatt (2009-03-18). "Major in-game ad firm struggling". BizReport. http://www.bizreport.com/2009/03/major_in-game_ad_firm_struggling.html . Retrieved 2011-04-17."In-Game Advertising". Entertainment Software Association. http://www.theesa.com/gamesindailylife/advertising.asp . Retrieved 2011-04-17. One of the advantages of IGA over traditional advertisements is that consumers are less likely to multitask with other media while playing a game, however, some attention is still divided between the gameplay, controls, and the advertisement.Moonhee Yang, David R. Roskos-Ewoldsen, Lucian Dinu, and Laura M. Arpan (Winter 2006). "The Effectiveness of In-Game Advertising: Comparing College Student's Explicit and Implicit Memory for Brand Names". Journal of Advertising. http://business.nmsu.edu/~mhyman/M454_Articles/%28Product%20Placement%29%20Yang_JA_2006.pdf . Retrieved 2011-04-18.
Static in-game advertising Similar to product placement in the film industry, static IGAs cannot be changed after they are programmed directly into the game (unless it's completely online). However, unlike product placement in traditional media, IGA allows gamers to interact with the virtual product. For example, Splinter Cell has required the use of in-game Sony Ericsson phones to catch terrorists.(2011-03-31). "Viral Video Features Inspired Product Placement of Dodge's Flagship Muscle Car". PlaceVine. http://www.placevine.com/blog/2011/03/31/viral-video-features-inspired-product-placement-0f-dodge%E2%80%99s-flagship-muscle-car/ . Retrieved 2011-04-25.Ted Boyke (2004-03-23). "Tom Clancy's Splinter Cell: Pandora Tomorrow World Premiere". The Next Level . http://www.the-nextlevel.com/features/events/pandora-tomorrow-world-premiere/. Retrieved 2011-04-25. Unlike static IGAs, dynamic IGAs are not limited to a developer and publisher determined pre-programmed size or location and allow the advertiser to customize the advertisement display.
A number of games utilize billboard-like advertisements or product placement to create a realistic gaming environment.Gene Emery, "What's in a Name: Product Placement in Games," Reuters. January 30, 2002.(2010-02-10). "In-Game Advertising Maximizes Marketing Dollars In Sports Category; New Mobile Advertising Opportunity for the Sports Industry". Business Trends. http://businesstrends.wordpress.com/2010/02/10/study-shows-in-game-advertising-maximizes-marketing-dollars-in-sports-category/. Retrieved 2011-04-14. For example, many sports games incorporate these advertisements to simulate the heavy advertising within professional sports.David Radd (2007-02-22). "Sports and In-Game Advertising". BusinessWeek. . Retrieved 2011-04-14.James Brightman (2010-02-10). "Sports Games Proving Effective for In-Game Advertisers, Study Finds". Industry Gamers . http://www.industrygamers.com/news/sports-games-proving-effective-for-in-game-advertisers-study-finds/. Retrieved 2011-04-14. Similarly, many games employ brand-name products such as guns and cars as in-game status symbols.DMA Design. Grand Theft Auto III. (Rockstar Games). PlayStation 2, (v1.1). (2001-10-22). These brand references may not be advertisements and are instead placed in the game purely for plot or design reasons. However, trademark owners sometimes object to unlicensed references to their trademarks. See, e.g., E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc.E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095 (9th Cir. Cal. 2008). https://caselaw.findlaw.com/us-9th-circuit/1485435.html. Retrieved 2011-04-17.
Dynamic in-game advertising
Increasing Internet connectivity and bandwidth has increased the use of dynamic IGA, which allows the game manufacturer or its advertisement vendor to deliver advertisements remotely, update advertisements after the game is launched, and target advertisements based on time or geography.Reena Jana (2006-01-25). "Is That a Video Game - or an Ad?". Business Week. . Retrieved 2011-04-14.Enid Burns (2008-04-07). "In-Game Ad Network Taps Into Virtual Worlds". ClickZ. http://www.clickz.com/clickz/news/1694387/in-game-ad-network-taps-into-virtual-worlds. Retrieved 2011-04-13. This approach combines the customization of web banners with the functionality of traditional billboards and posters as most in-game advertisements do not link to a website outside the game. Dynamic IGAs allow the game manufacturer or its advertisement delivery service to track advertisements in real time and capture viewing data such as screen time, type of advertisement, and viewing angle. This information may be used to improve future advertisement campaigns and to correct copy problems or make a current advertisement more appealing to players.Simon Carless (2006-10-17). "IGA's Townsend On BF2142 In-Game Ads". Gamasutra. . Retrieved 2006-10-22.
Dynamic advertising campaigns allow IGA to be part of a time-sensitive advertisement campaign because they do not need to be designed months or years before the game is finished.Paul Hyman (2006-01-26). "Advertisers await game measurement". http://www.frankwbaker.com/videogameads.htm . Retrieved 2011-04-14. Dynamic advertisements can be purchased after a game is released to the general public are featured in a developer determined in-game location. For example, in October 2008, billboard advertisements were purchased in 10 swing states by then-US Democratic presidential candidate Barack Obama in numerous Xbox games.Walter Alarkon (2008-10-14). "Obama Runs Ads in ‘Madden'". The Hill. https://thehill.com/blogs/blog-briefing-room/news/campaigns/37922-obama-runs-ads-in-madden/. Retrieved 2011-04-05.
Advertising in online-only games Freemium and free-to-play Freemium and free-to-play games are typically playable online and provide a free basic game with options for players to purchase advanced features or additional items.Dean Takahashi (2011-02-26) "Will Microsoft conquer free-to-play games with Age of Empires Online?" GamesBeat. https://venturebeat.com/2011/02/26/will-microsoft-conquer-free-to-play-games-with-age-of-empires-online-video/. Retrieved 2011-04-14. They operate under the theory that a gamer will pay for additional in-game features after investing enough time in the game.Danc (2009-07-05). "Flash Love Letter (2009) Part 1". Lostgarden. http://www.lostgarden.com/2009/07/flash-love-letter-2009-part-1.html . Retrieved 2011-04-01. In freemium games like Farmville, these transactions are typically one-time payments for specific in-game goods (micro-transactions).Samuel Asher Rivello (2011-03). "How to make money with online games". Adobe Edge. http://www.adobe.com/newsletters/edge/march2011/articles/article1/index.html?trackingid=IJQLF. Retrieved 2011-04-02. Free-to-play games like Age of Conan instead try to induce players to enter into a pay-to-play relationship for premium content.John Callaham (2011-02-01). "Company of Heroes Online to shut down March 31". Big Download . http://news.bigdownload.com/2011/02/01/company-of-heroes-online-to-shut-down-march-31/ . Retrieved 2011-04-14. While typically generating income though these other revenue sources, freemium and free-to-play games often feature advertisements as well via splash advertisements or advertiser sponsorships of virtual-good giveaways as additional income.Jason Katz (2011-03-10) "In-Game Advertising: A Waning Star?". The Marketing Arm . http://www.themarketingarm.com/index.php?id=24768 . Retrieved 2011-03-15.
Pay-to-play Pay-to-play games charge players to access the game content. Depending on the game environment, some pay-to-play games feature IGA. For example, City of Heroes and Anarchy Online both use dynamic IGA in an urban game setting to mimic real world stimuli.(2008-04-03). "City of Heroes – In-Game Advertising". MMORPG. http://www.mmorpg.com/gamelist.cfm/gameId/3/setView/features/loadFeature/1866. Retrieved 2011-04-14.Dan Fortier (2006-08-26). "Debate: In-Game Advertisements". MMORPG. http://www.mmorpg.com/showFeature.cfm/loadFeature/828 . Retrieved 2011-04-14. In contrast, fantasy games such as EverQuest II and World of Warcraft may not include IGA when real-world advertisements do not fit contextually. Blizzard has previously remarked that it would not consider using IGA within World of Warcraft; conversely, SOE experimented briefly with an in-game command-line function allowing players to order food delivery from Pizza Hut in EverQuest II.Andrew Edgecliffe-Johnson (2008-1-30). "Questions Raised Over Revenue Growth From Modern Advertising". Financial Times. https://www.ft.com/content/e7c50fce-ced6-11dc-877a-000077b07658 Retrieved 2011-03-07.Ben Zackheim (2005-02-18). "Pizza and Everquest 2 – two great tastes that clog arteries together". joystiq . http://www.joystiq.com/2005/02/18/pizza-and-everquest-2-two-great-tastes-that-clog-arteries/. Retrieved 2011-04-14.
Virtual worlds and MMORPGs may host persistent online advertisements by allowing marketers to purchase virtual real estate. Aside from establishing a brand presence, companies can use it to test future real-world locations. For example, the Aloft Hotels brand was established within Second Life prior to the completion of its real-world counterpart.
Advertising industry reaction to IGA