Companies Begin Running Ads in Video Games

Marketers have begun experimenting with putting TV-like ads in video games in an effort to reach younger audiences who watch less traditional TV.

The ads are optional 15- or 30-second commercials. In return for watching the ad, gamers can receive points or rewards that can be used in-game. This type of reward-based ad system is common in mobile and social-media video games but has been absent from the console game market.

In May of 2020, the Turner unit of AT&T’s WarnerMedia ran three trial ads within Electronic Arts’ fighting game “UFC 3.”

The ads promoted the shows “Rick and Morty” and “Snowpiercer,” as well as “The Match,” a celebrity golf tournament featuring Tiger Woods, Phil Mickelson, Tom Brady, and Peyton Manning.

The credit-reporting company Experian followed suit in July with its ads. The ads promoted the company’s Experian Boost product, aimed at improving users’ credit scores.

Simulmedia Inc. is handling the foray into the new marketing format. The company is an ad-tech firm with software that allows marketers to target ads towards a narrower demographic than TV’s broad age and gender demographics. Early users of the new format included Experian, WarnerMedia, and Dollar Shave Club.

All of these companies are hoping to reach the U.S.’ digital console gamers. According to Business Insider, console gaming audiences are predicted to grow “28% year-over-year in 2020 to 93 million and account for 54.8% of digital gamers.”

Traditional TV advertisement was a significant marketing channel for many of these companies. According to Steve Hartman, vice president of integrated marketing at Experian Consumer Services, traditional TV is Experian’s most significant marketing venture by spending.

“The way people are consuming media these days, you don’t reach 100% of your audience on TV anymore,” said Hartmann.

According to The Wall Street Journalthe loss of live sports due to the coronavirus pandemic made it harder for companies to reach their younger audience. Movement into video games is one way to combat the loss of viewers.

Business Insidecites the stay-at-home orders as a significant contributor to the spike in gaming. It estimates that “ad revenues from gaming video content — ads within gaming-related videos on platforms like YouTube and Twitch — will grow 13% in 2020 to over $2 billion.”

“A year ago, Twitch was averaging around 900 million hours watched a month,” says Sean Horvath, chief revenue officer at StreamElements, “now, it’s hitting more than 1.5 billion, with that momentum really kicking in when the shelter-in-place mandates were announced earlier this year.”

Ads have appeared in console games in other formats before, primarily as in-game virtual billboards and signs.

The new shift in advertising may create a stir among gamers who “are notorious for howling at changes they don’t like,” according to The Wall Street Journal.

If ads create barriers between the gamers and the content, many users will likely respond negatively, especially ads inside games that cost around $60. However, ads in free downloadable and streaming games may be better received.

“The most fundamental piece is we have to create an ad experience that gamers accept,’ said Dave Morgan, chief executive and founder of Simulmedia. “Maybe they won’t love it, but at least they can say, ‘Yeah, for a couple of points or a battle shield, I’ll watch the ad’.”

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