In-game advertising is worth $1+ billion a year – is PS4′s future commercial?

Advertising is everywhere – and games are no exception. Some have enough product placement to make James Bond blush. But how do they get there? Which games are the worst offenders? Can they sometimes make a game more true to life? And what happens when it all goes wrong?

When ads invade games

The fact is, reader, that there’s a price on your head. Ever booted up a racing game to be greeted by billboard ads for real products, or wondered why Big Boss or Sam Fisher have a favourite brand of snack or mobile phone? It’s all because of you and the contents of your fat, shiny wallet.

As adverts encroach all around us – on hoardings, TV, browser windows and the pages of magazines – we adapt to better tune them out. And so advertisers work ever harder to tempt us, to entice us, or to persuade us that Brand X is better than Brand Y (or, heaven forbid, no brand at all).

And when better to get under our skin than when we’re relaxing in front of a videogame for hours on end? From the early days of advergames such as McDonald’s vehicle MC Kids and the lurid lollipop landscapes of Chupa Chups-sponsored Zool, to sophisticated modern techniques, ads have become tightly integrated into the world of games.

“What’s unique about videogames is that people are immersed in the gameplay, with their eyes glued to the TV screen. So it’s pretty hard – if not impossible – for people to tune out in-game advertising, and not to recall the ads they see while playing,” explains Jordan L Howard, founder and CEO of Reloaded.

“What’s unique about videogames is that
people are immersed in the gameplay, with
their eyes glued to the TV screen. So it’s pretty hard to tune out in-game advertising”

Reloaded is one of a growing number of advertising agencies that specialise in games. Based in Vancouver, Canada, Howard’s company acts as a middleman for game companies and advertisers around the world, placing ads for brands as diverse as Red Bull, Warner Bros Records and Starbucks into games that range from Fight Night Champion to Need For Speed: Shift 2 Unleashed.

“The teenage and young adult population are typically seen as an elusive and difficult-to-reach demographic,” says Howard. “It’s hard to capture [their] attention, and it’s equally hard to find effective advertising channels to do so. Videogames provide a targeted advertising channel, combined with an engaging and exciting way to deliver advertisements.”

In-game advertising has become a huge industry, worth an estimated $1 billion in annual revenue. Some publishers use the money to subsidise the ever-rising cost of producing triple-A games, while online many games are available for free thanks to their sponsors.

“We’re definitely getting very close to a point where in-game advertising may become a necessity,” says Howard. “I wouldn’t go as far as saying advertiser funding is essential – yet – but it definitely has a place in helping studios and publishers recuperate production costs.”

Sports games are magnets for advertisers. Most gamers would probably agree that having ads in a sports game makes it feel more realistic – after all, if the billboards around the pitch in FIFA were blank it wouldn’t look like a real-life game of football. And so we get Adidas and Sharp ads in the background. Logos appear on kits and equipment – and not only in FIFA, but also in other annual EA Sports series based on the NHL, NBA and NFL.

Dynamic in-game advertising is by far our most popular in-game ad channel,” explains Howard. “[It] takes the form of billboards and posters throughout the game environment that can be updated with image ads in real time. It’s only possible when gamers are playing with an active internet connection. The ads are integrated into the game via an adserver, which is a tool used to control the delivery of advertisements into videogames.”

In other words, the ads displayed in a particular game can change depending on when and where you’re playing it. Gamers in the UK see something different than those in the States (based on your IP address), while booting up a game in summer or winter might bring up a different set of ads (based on seasonal campaigns or, in the case of Burnout Paradise, whether Obama is running in an election). And if you’re not connected to the internet, you might see no ads at all – just fake ‘house’ ads where they should be.

And then there’s static in-game advertising, where a product is hard-coded into the game and never changes – a bit like product placement in a film. When Sam Fisher reaches for his Sony Ericsson phone in Ubisoft’s Splinter Cell games or Old Snake gulps a bottle of Regain 24 energy drink, you’re seeing tie-ups that were planned long in advance and built into the game forever.