Top Brands Pour Millions Into In-game Advertising

(Via The Age...)

PLUMMETING prices for video game consoles and the mainstream appeal of today's games have lit a fire under the in-game advertising market, with yearly spending in Australia already estimated to be worth millions.

The total video game industry is already grossing more than box office and DVD sales but when it comes to advertising, gaming continues to languish behind other media.

Initial estimates that the worldwide in-game ad revenue would hit $US2 billion

($A2.3 billion) by next year are now looking over-optimistic, with the market likely to come in at half that by 2013.

Nevertheless blue-chip companies such as 7-Eleven, 20th Century Fox, Lynx, Coca-Cola, Wrigley, Telstra, Kia, Schick, Mitsubishi, Nokia and Intel have all booked Australian campaigns on Xbox 360 and PlayStation 3 platforms in recent months.

There are no hard figures for the size of the industry but it is thought to come in under $10 million.

Brian Neal, regional sales manager at Massive, said: ''We've had massive amounts of traction in the last two years … Massive initially supported the [Australian] market from the States but we were seeing enough traction here that we decided to move myself down,'' he says.

Neal says there are 650,000 Xbox 360 consoles in Australian households, of which 60 per cent are connected to the internet. A Sony spokeswoman said there were 580,000 PS3 consoles in Australia and 55 per cent were connected to the internet.

The biggest buyer of ad space is not the private sector but government. The Victorian Government's Transport Accident Commission has been running road safety ads in a range of games on the Xbox 360 and PS3 and is the biggest spender.

Jamie Crick, strategic sales and implementation manager at Media Smart, which books ads for the PlayStation 3 and PC, said his network of PS3 titles offered an audience of about 50,000 consoles a month, known as ''impressions''.

''Now that the current generation of consoles have come down to a price that's reasonable for all … I think now is where we're going to see the numbers pick up in terms of uniques,'' says Crick. That is set to open up the elusive 18-to-34-year-old male audience.

In February Nielsen Online found Australians aged over 16 were spending on average 5.4 hours a week playing video games, up from 4.6 hours the previous year. Time spent with TV, radio, newspapers and magazines all dropped.

And, they argue gamers are more likely to engage with the advertising. ''Gaming itself is very much a lean-forward medium - it's not passive like TV or radio where you're likely to be doing something else,'' says Crick.

Since the creative constantly changes, gamers must have their console hooked up to the internet in order to receive the ads, which come in the form of billboards or as deeply integrated objects in the game, such as a logo on the mat in a boxing ring.

Advertisers can even either book ads across the entire network of titles or in specific categories - such as racing games - to target a desired demographic.

But, the industry admits there are still hurdles to widespread adoption by advertisers, the lack of an independent body to calculate audience sizes as well as a standard for measuring results, among them.