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In-Game Advertising Poised for Explosive Growth 65

bart_scriv writes "A new study from Yankee Group predicts a fivefold increase in the in-game advertising market over the next four years. The market, which grew from $34 million in 2004 to $56 million in 2005, is expected to reach $732 million by 2010. Although in-game advertising is currently controlled by a small number of independent networks (IGA, Massive, etc.), the study suggests that the larger game companies will eventually dominate the market by bringing ad serving in-house."
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In-Game Advertising Poised for Explosive Growth

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  • Inquiring minds want to know!
  • So which is it 732 million or 2 billion?

    http://games.slashdot.org/article.pl?sid=06/04/14/ 1510238 [slashdot.org]

  • by Ugly American ( 885937 ) on Thursday April 20, 2006 @05:22AM (#15163426)
    "This headshot brought to you by Barrett Rifles."
  • by JWallyR ( 824828 ) on Thursday April 20, 2006 @05:26AM (#15163437)
    I'm too lazy to look up and link, but I'm sure lots of other regulars around here have read about the horrible failures of most modern advertising to really do anything other than annoy and frustrate the "target audience". I'm not a big fan of the GTA series, but I've been around people who were, and listening to the parodies of actual radio advertisement and seeing the parodies of billboards was a clever and fun way to make the game world more interesting. On the other hand, basically every "real world" advertisement put into a game is hideously overdone. I remember somebody commenting on the spammed billboards for some company or other in a recent racing game, and the "dnL" vs 7up thing is just ridiculous.

    The way that things look to me is that two things will end up happening:

    1. The only advertisement that will really continue to flourish are the sorts of things that make it to the Super Bowl commercials, which is to say that they'll actually be entertaining.

    2. "Advertising" as an industry will basically keel over and die, because products will eventually reach a point at which they will stand or fall on their own merits. The internet means that the exchange of information is certainly possible; all that remains is for people to realize that 99% of advertisement has nothing to do with the product and everything to do with making as much noise to get as much attention (negative OR positive) as possible.

    I really don't care about the advertising industry; I'm not the sort to know or care what's in fashion, I just buy what I want (or need) and any advertisement aimed at me beyond the introduction of new products is doomed to failure.
    • by MobileTatsu-NJG ( 946591 ) on Thursday April 20, 2006 @06:19AM (#15163543)
      " I'm not a big fan of the GTA series, but I've been around people who were, and listening to the parodies of actual radio advertisement and seeing the parodies of billboards was a clever and fun way to make the game world more interesting. "

      Funny you should mention that because one of the most lauded features of Vice City was the use of real songs in the sound track. One of the other laudable features was just how similar to the cities they were portraying the levels were. GTA is one of those games that I think would have benefitted from in-game advertising. Just another step closer to being in the game. Then again, I'm talking about the soda machines advertising Sprite, not CJ stopping to pump up his Reebok shoes.

      "1. The only advertisement that will really continue to flourish are the sorts of things that make it to the Super Bowl commercials, which is to say that they'll actually be entertaining."

      This is a diverse market. One has to be careful about using the word 'only' when making generalizations like this. It's difficult to picture something like Google's text ads going anywhere any-time soon for the simple reason that they're relevent and the message is short and clear.

      "2. "Advertising" as an industry will basically keel over and die, because products will eventually reach a point at which they will stand or fall on their own merits. The internet means that the exchange of information is certainly possible; all that remains is for people to realize that 99% of advertisement has nothing to do with the product and everything to do with making as much noise to get as much attention (negative OR positive) as possible."

      VERY unlikely. Sure, you can go looking for stuff on the internet. Sure, you can go find it and read reviews. Fine, great, perfect. The problem is that there is SO MUCH STUFF to go out and buy that there will ALWAYS be a market for advertising. All an advertisement has to do is make you aware that a product exists. That's it. The work is done. When it's time for you to solve a problem that a particular product can solve, you'll remember it and look it up. This will not go away.

      "I just buy what I want (or need) and any advertisement aimed at me beyond the introduction of new products is doomed to failure."

      I find that rather unlikely. It is inevitable that you are going to find yourself with a problem that a commercial product can solve. Maybe it's a clogged drain. Maybe it's a new video card. Maybe it's dinner time. You're going to call up a list of solutions, and gee golly gosh, an advertised product is going to pop into your mind. Sure you'll do your omework on it. Sure you'll read 'honest' reviews. Sure you'll search for the best deal, as opposed to buying it at Circuit City where it was advertised. Doesn't matter. Advertising still made you aware of it.

      Advertising isn't going anywhere. As long as there are products to sell, there'll be advertisements backing them up. The mode of advertisement might change (i.e. pop-ups, pop-unders, pop-reacharounds...), but the industry isn't doomed to death.

      In other news, I'm going to put on my Nostradamus hat and predict that with the explosion in blogging lately, we'll see more companies offering referall rewards to people who write reviews of their products. I also see the demise of that system happening a year or two later.

    • 2. "Advertising" as an industry will basically keel over and die, because products will eventually reach a point at which they will stand or fall on their own merits. The internet means that the exchange of information is certainly possible; all that remains is for people to realize that 99% of advertisement has nothing to do with the product and everything to do with making as much noise to get as much attention (negative OR positive) as possible.

      This I think is an interesting point, as there is a Spanish
    • As an advertising exec (and a huge geek and longtime Slashdotter)...I must say this has to be one of the most ignorant and naive posts I've read in a long time....lets start with your 1st point...

      "1. The only advertisement that will really continue to flourish are the sorts of things that make it to the Super Bowl commercials, which is to say that they'll actually be entertaining."

      Right, because there is no advertising that is creative and witty that is not shown during the superbowl commercials where it

  • More realistic (Score:4, Informative)

    by cl191 ( 831857 ) on Thursday April 20, 2006 @05:27AM (#15163438)
    I actually like seeing real life ads in games, games like SWAT4 with real movie posters or real coke machine makes it much more realistic IMO. But then of course it will get annoying if it's too intrusive, like flyers/posters everywhere on the wall and floor. On another note, I found it interesting that in SWAT4, most of the computers in the game are destructible, while the one with ads on the screen are indestructible.
  • Whats the chance that they'll make more money on the advertising and just give the game away. I think this would be a great method of product placement. Worked great when the US Armed Services gave away 'america's army'. They could also update the ads either on a regular basis over the internet, or through patchs.

    Heck, why not include some form of google ad sence that ties in with your brousing and PRESTO your new faverate video game not only sells you products but products specificly marketed to you
    • Whats the chance that they'll make more money on the advertising and just give the game away.

      ...about the same chance that cable companies would have made cable free once they accepted advertising on almost all of their channels. Why replace one revenue stream with another if you can keep both?

      • ...about the same chance that cable companies would have made cable free once they accepted advertising on almost all of their channels. Why replace one revenue stream with another if you can keep both?

        The cable company neither creates the content, or embeds the advertisements. Both of those are by the source originator. Companies like ABC, NBC, CBS, and so on that exist 100% by advertiser support. They existed actually before cable companies.

        Cable companies thus had to find a different revenue stream. If t
        • So comcast isn't overlaying all those comcast adds and local adds on my national cable?
          • So comcast isn't overlaying all those comcast adds and local adds on my national cable?

            No, they aren't. Your local NBC/ABC/CBS affiliate is, or the source network is when they provide specific feeds for specific areas. Comcast pays NBC/CBS/ABC/etc. just like everyone else to get their ads on their.
            • So comcast isn't overlaying all those comcast adds and local adds on my national cable?

              No, they aren't.

              Yes they are. For many (most?) national cable channels, part of the deal under which the cable company carries the channel is that the cable company gets a certain number of minutes per hour in which to run their own ads. This is why you might see a commercial for your local, just-down-the-block used car dealer on a national channel like Food Network.

    • Whats the chance that they'll make more money on the advertising and just give the game away.

      See Anarchy Online [anarchyonline.com]. You can play their "base" game for free, in exchange you get in-game ads. If you want to play the expansion packs, you need pay the monthly fee.

      The in-game ads aren't all bad. The ones in town aren't too distracting and I've even stopped to watch the full motion(ie. video) ones. The annoying ads are the posters in the missions(dungeons). But for free it ain't all bad.
    • Whats the chance that they'll make more money on the advertising and just give the game away?

      Most high circulation magazines, and even newspapers, actually make very little money by their subscription fees, and instead rely largely upon advertisers as their business model.

      Why do they charge a subscription fee, then? They charge because it gives advertisers faith that the paying customer base actually wants, and probably utilizes, the magazine, and probably assigns it some value. Thus the advertisers pay mor
      • Such as National Geographic?

        I got into this discussion once before with someone else here on Slashdot. I subscribe excusively to advertisement-free publications. Pennsylvania Magazine, Birds & Blooms, Backyard Living, to name a few. These publications are small ones, hence their production overhead is more significant to their bottom line, yet they can survive free of advertising. The National Geographic model (which typically includes only one car advertisment on the inside cover or something; I do
  • by AndyTheSayer ( 965008 ) on Thursday April 20, 2006 @05:43AM (#15163465)
    It'd be interesting to see them try to sneak an ad for Coca-Cola or whatever into something like Oblivion. ;) I don't see how they could advertise many products in a fantasy setting. It'd ruin the immersion. Unless they have Ye Olde Coca-Cola ale for sale in a tavern or something... But even then, someone would doubtless quickly mod the game to replace it with something non fourth-wall breaking.
    • by Anonymous Coward
      If ads do become a significant source of revenue for publishers, they're going to start mandating it in all games they publish. Games like Oblivion will either be ruined by the advertising, or they will simply never be made, and the resources saved will go towards producing another twenty or so thinly disguised ads for Coke.

      You can pretty much say goodbye to immersion, any games set in a non-modern setting, or both.
    • Coca-Cola in Oblivion? Mmmm... what if an alchemist sends you on a herb gathering quest and when he finally mixes the potion he asks you how you would call it?... guess what could be the only dialog choice?
    • Coming to EverQuest 3:

      ISpellbook: Cast Differently

      (with Jobs in a robe and pointy hat, and a little winged demon on his shoulder that looks REMARKABLY like Bill Gates. . . )

  • Insiders view (Score:2, Interesting)

    by korpique ( 807933 )
    It's really nice to be able to support a user base of millions very few of whom ever choose to put any money into the game. At least in our platform, however, the advertisers have to be hand-picked to fit our "world", and the advertisement method and material have to be tailored by hand. It's hard to see what the role of a mediator would be in this kind of setting. Maybe consultant, but probably only before our platform is chosen as the channel.
  • If it brings down the price of games (doubtful) it would be nice.
    But really I dont mind current advertising in games at all, like mentioned by others it adds a little realism to a game. Real ads on the boards in hockey games doesn't affect the gameplay, and the only times your really going to notice them are during cut scenes. Billboards on racing games also do little to detract from gameplay. I think the type of advertising that should be a non-issue is product placement in limited QUANTITY (no office I
  • Hasn't In-Game Advertising been "Poised for Explosive Growth" for the last couple of years?

    For sure there was an article here on /. a couple of months ago about how in-game advertising was going to grow (sorry, i'm too lazy to look up the reference). I'm still waiting to hear the bang.

    Been seing in-game avertising for years now (just about any F1 game of the last 5 years has it) and yet it in-game advertising revenue remains a very (very, very) small part of the total advertising revenue.

    With the notable ex
  • Wait and see (Score:5, Insightful)

    by caffeination ( 947825 ) on Thursday April 20, 2006 @06:38AM (#15163571)
    We're all talking about it as if it'll definitely remain in the same form as it's in now: ads merged into the environment in the form of textures.

    I think "explosive growth" means logos and adverts during loading times and the like. If there's one thing we can count on, it's corporate greed.

    • I can think of even worse than that.

      Unskippable advert start scenes - at the start of every level. Or hell, why not mid-level?
      Constant overlaid onscreen ad graphics (a la TV station logos)
      Product placement in cut scenes (already happening, see Splinter Cell:PT in which the hero practically fellates his Sony Ericsson cell phone)
      Exclusive unlockable content, only available by buying a certain product and keying in personal activiation codes (bet this had been done already too)

      The fact is, advertising doesn't
  • So.... (Score:4, Funny)

    by jasen666 ( 88727 ) on Thursday April 20, 2006 @08:18AM (#15163804)
    Since the game will now generate ad revunue, that means they can sell them a little cheaper right?

    *cue game company execs staring idly at the ceiling tiles

    er, pay the hardworking programmers and developers a bit more?

    *more tile counting

    Oh, line executive coffers and retirment plans?

    *CEO and CFO highfive
    • Your comment is funny, but it raises a point... what do we get out of this? Of course the answer is nothing...

      So we put up with these ads, whether they're built into the game using textures of put up on a splash screen when we login, but we don't get any benefit from them. The games will NEVER go down in price. Sure some mmorpg companies (like Funcom with Anarchy Online) have provided their games free of monthly fees if you have the ads, but I don't think we'll ever see a mainstream game disk go for $40
    • You are modded funny...but seriously, it should be insightful with how spot on this is. I mean...how about movie theatres? Now when I go there I have to watch commercial after commercial if I show up early. Have ticket prices decreased? Nope, they have gone up. Really makes me not want to go see a movie anymore.
  • I will continue to insert dynamic ad-server domains into my HOSTS file as rapidly as they establish them. Seeing the blank billboards in games like PlanetSide is actually beginning to amuse me.
  • Ads in games (Score:2, Interesting)

    The advertising industry in a state of panicked paralysis. Lots of smart guys who've had a great ride for 30 years are terrified that it's going to end. Product placement, whether on TV, in films or in ads, is one solution they cling to, like Leo di Caprio clutching that bit of wood at the end of Titanic. Didn't do him much good, and it won't do them much good either...

    Key issues include:
    * does the user pay for the content? If not, as on TV, and users perceive that they are getting good content for not
  • I for one would support this, if it meant not having to pay a monthly fee to play that $50 game I just bought online. I've got enough bills, I don't need one for playing a game too.
  • by keyne9 ( 567528 )
    I repeat, to advertisers: Stay the fuck out of my game.
  • In-game ads have been slowly creeping up on us for ages. There's no explosion, just a general slow creeping toward ad saturation. We've all seen it happen before on cable TV and satellite radio, and very quickly on the WWW.

    I remember one or another of the old "Teenage Mutant Ninja Turtles" games for NES, where every so often you'd walk past a Pizza Hut ad. That wasn't so annoying, pizza was part of their schtick, whatever. I think they even gave you a coupon for a free pizza or something with the game.

    • The question this rises, though, is whether the game world needs more ads or the real world needs fewer.
      • That is an excellent point, and one sure to make people on either side of the spectrum cringe. I'd mod you up, but I have no power here.

        I'd be happiest in a word without ads, real or virtual, but I'm dubious that it'll be allowed to happen. I remember my dad, an early adopter of cable TV, being majorly pissed off decades ago when ads started to infiltrate the service he was already paying for. Nowadays in the age of QVC and all-night infomercials, people don't even notice that they're paying premiums for

  • by MaWeiTao ( 908546 ) on Thursday April 20, 2006 @09:58AM (#15164431)
    These companies want advertising in games to make extra money above and beyond what they make now. There's no way in hell they're going to lower prices because they've crammed a game full of ads. If they did that they might as well not have advertising in the game at all.

    The last time I checked cable and satellite television is getting more expensive despite more advertising than ever before. The same goes for movies, which have absurd amounts of product placement despite ever increasing ticket cost.

    These companies don't care about preserving immersion, they care about making a few extra bucks. GTA Vice City took place in the 80s, San Andreas took place in the 90s. If they put in real ads rest assured they wouldn't be advertising from each game's respective time period. We'd see big flaming ads for Dell XPS computers, Subway sandwiches, bad ringtones, some new SUV and lord knows what else. And then the best part is when they throw these ads in a player's face and force them to watch it. We'll have a game with completely destructable environments except for advertisements. And entire town will be obliterated but all the billboards will be pristine.

    And for every one creative, well-designed ad there are 10,000 awful ones. This entire venture is about making money. These jerks aren't going to spend on anything if they don't need to which means we're going to see low quality garbage everywhere. Look for high quality advertising in the style of lowermybill.com.

    I never liked advertising and I never will.
    • I agree 100%. Ive worked in 'triple A' game dev putting billboards in a game where they did not belong. Ive implemented at gunpoint that unskippable startup screen with the 'runs best on intel' bullshit that the company were paid to include. I hate it more than anyone.
      If you really want to make a difference with this, you need to vote with your wallet and just not buy a game thats packed with ads. It annoys me that reviewers dont mention the number of unskippable ads or product placements in games. I wouldn
  • Fantasy games (Score:3, Insightful)

    by Lord_Dweomer ( 648696 ) on Thursday April 20, 2006 @11:36AM (#15165221) Homepage
    While ads certainly have their place in games like GTA, The Matrix Online, even CoH...I have to say I am DYING to see what attempts will be made to breach the ad market with fantasy games. Because honestly there is no clean, natural and non-disruptive way to do so without completely borking the setting.

    Of course what that means is we will start seeing less ads in the actual game world, and more ads in the interface, similar to the whole "ordering pizza through the command line" deal. Or possibly showing spots during zone loads. Of course then you have angry players who would rightly be suspicious that their uberfast connection and computer should load the zone quicker and that they are delaying the zone loading process just to show ads.

    And lets face it...since the most popular (for the moment) game online is WoW...you KNOW someone will attempt it. Whether Blizzard will bite or not is another question. Would you object to seeing a food vendor selling chicken suspiciously labeled "K'ntuckee Fried Chicken"? I actually think that is one option advertisers have...parodying their brands. People can easily make the connection and see the joke, it would definitely be fitting in the setting...AND people would still make the same connection to the brand, and perhaps even appreciate that they didn't try to make a hugely flashing ad that completely broke the theme of the game world.

  • the Mountain Dew Broadsword of Uleharm. Bonus +5 to stamina, 10% chance to cast Berzerker Rage on self during melee combat. Do the Dew!
  • There is little difference between in game ads and the endless ads they play before a movie at your local theater. You have already paid for the privilege of seeing the movie (or playing the game), but now you have to endure 20 minutes of ads. Have the prices of movie tickets gone down? No they have only gone up. The same thing will happen with game prices.

    And can you think of anyone who likes the ads before a movie? Ever wonder at the decreasing revenue for the film studios? I would say the opinions of t
  • In-Game Advertising Poised for Explosive Growth

    And gamers are just as poised to 'explode' away from any game with ads in it.
  • As all ads this will be dealt.
    Perhaps it will require a dedicated crack,it usually works this way.
    In degree of complexity:
    1.hosts IPs can be blocked separately.
    2.textures/objects/generator scripts can be hacked to draw blank/disabled.
    3.If all this is encrypted it will be decompiled.
    4.server side authentication will be logged and reverse engineered.
    5.If all else fails the client will be reverse enginered.(Unlikely and messy solution,but is very effective)
    Its depends just matter if they game popular enough an
  • Pikmin 2 is full of in-game advertising, and it actually kind of adds to the game's narrative. Modern-day Earth products are lying around everywhere, implying that the game takes place on a post-apocalyptic Earth, after the entire human race got so fed up with ubiquitous advertisements that it killed itself just to get away from it all.

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