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In-game advertising is becoming increasingly popular as an advertising channel, drawing interest from advertisers, publishers, and users. 

Brands and mobile game developers who overlook this channel's potential, due to misconceptions, are missing out on the extensive reach of in-game advertising.

Many fail to recognize that their audience predominantly resides in the gaming world, according to Ernst and Young people only spend 8% of their free time on TV vs 37% on gaming content. 

This highlights the significance of game advertising as a key touchpoint for brands who are looking to connect with their audience and provides publishers with diverse monetization opportunities.

Beyond generating excitement, in-game advertising promises future technological advancements, potentially transforming experiences for users, brands, and service providers.

Come along with us as we delve into in-game (or in-play) advertising and the significant opportunities this untapped market presents.

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What Is In-Game Advertising?

To fully understand why everyone is excited by in-game advertising, let's cover the basics. 

Forbes sums it up well: "Consumers don't just want products; they want complete experiences." 

Audiences' need for engaging and highly relevant experiences illustrates the significance of in-game advertising as an effective mechanism for connecting brands with their target market. 

In-game advertising offers a more sophisticated method for placing ads within gaming environments.

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What is In-Game Advertising

In-game advertising allows brands to integrate their message and personality into the game through in-game elements like billboards, vehicles, and buildings. Capturing the attention of players in the online world they are fully engaged in. 

Making in-game advertising a vital channel for connecting brands with their audiences.

Next, we'll explore the various gaming environments that comprise the in-game advertising landscape.

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The Gaming Ecosystem: Understanding The Gaming Environments

The Interactive Advertising Bureau (IAB) classifies game advertising into three primary environments: in-game, around the game, and away from the game. 

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These categories are based on how ads are integrated into the gameplay across various gaming platforms.

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Want to get started with in-game advertising but not sure where to start?

Read more about how to jumpstart your in-game advertising in our article on the Crawl, Walk, Run approach to game advertising. 

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In-Game Advertising Market Landscape

The in-game advertising market is experiencing significant growth. Statista projects in-game advertising revenue to hit US$94.53 billion by the end of the year. 

This is no surprise when you realize that gaming captivates over 3 billion people worldwide, solidifying that gaming is no longer a niche past-time reserved for young men. 

Gaming has emerged as a form of mainstream entertainment, rivaling other forms of modern entertainment such as CTV, and social networks. 

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Gaming channels are becoming an increasingly popular advertising channel, drawing in major global brands and marketers are starting to notice.

The Microsoft and Activision Blizzard merger affirms how major players are recognising the lucrative opportunity of in-game advertising presents. Such pivotal events are reshaping the gaming world, presenting new opportunities for both brands and publishers.

In this evolving market, brands must swiftly engage with in-game advertising to capitalize on these emerging opportunities.

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How In-Game Ads Work?

Advertisers often ask questions like this: How can we effectively and seamlessly integrate ads into a racing game for a new sports car campaign? 

In-game ads are inserted using dynamic rendering engines that place ads in real-time. These engines can handle different ad types, such as banners, videos, or interactive elements, and they adjust ads to fit the game’s style and the advertiser’s goals.

The type of gaming platform used plays a big role in how ads are shown. Ads in mobile games, which are becoming more popular, offer great opportunities for advertisers. 

Meanwhile, console and PC games are suited for high-quality, immersive ads, especially in top-tier AAA title games.

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Types of In-Game Advertising

The world of in-game advertising offers various authentic ways to showcase branded campaigns – from dynamic ads, static ads, and game-related content to product placements. This extends to a broad selection of rich media formats, including audio, video, and display. Brands need to choose their favorite tricks to align with their overall marketing objectives and craft campaigns that fit into the gaming scene.

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In-Game Advertising Strategies for Brands:

• Dynamic Ads
• Static Ads
• Sponsored Game Content
• Advergames
• Product Placement

In-Game Advertising Types and Formats:

• In-game Audio
• In-game Video
• In-game Display

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Strategies and Approaches for Brands

Dynamic In-Game Advertising

Dynamic in-game advertising, often placed strategically across in-game billboards and posters, mirrors online display advertising. This method uses cost-per-thousand (CPM) pricing, as well as geo-targeting and demographic targeting, to reach the right audience effectively.

This type of advertising is particularly popular in mobile gaming due to its flexibility and ability to update ads in real-time, making it an attractive option for brands looking to increase visibility among users.

Dynamic ads target users based on specific criteria like location, time, and content type, providing a contextually relevant experience. 

Additionally, this form of advertising allows for tracking user interactions, such as impressions and clicks, helping advertisers to fine-tune their campaigns for better results.

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Static In-Game Advertising

Static In-Game Advertising integrates into games during development, akin to product placements in films. 

Unlike dynamic ads, these ads are fixed, not modifiable post-development, making them accessible even offline.

However, one limitation of this advertising strategy is the lack of reporting capabilities, which makes tracking and analysis more challenging.

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Sponsored Game Content

Sponsored game content is a strategic approach where brands collaborate with game developers to integrate their offerings directly into the gameplay. 

Think custom levels, unique characters, exclusive skins, engaging questlines, or branded events, all woven into the gaming experience. 

However, this strategy isn’t about haphazardly entering the gaming realm. It demands thorough research to identify games and player bases that align with the brand’s identity and target demographic.

The true effectiveness of sponsored content lies in its alignment with the game’s theme and mechanics, ensuring it enhances rather than disrupts the gaming experience.

Well-craft sponsored game content not only captivates the gaming community but also elevates brand visibility and nurtures player loyalty.

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Angry Birds 2 and Duolingo Crossover Event

Source: Pocketgamer

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Advergames

This refers to custom-made video games that are created by brands to promote their products, services, or messages in an entertaining way.

These games vary widely in format, ranging from web-based adventures and mobile apps to versions integrated within larger gaming platforms.

For advergames to be effective, they need to be well-designed, reflect the brand's values, and, most importantly, be enjoyable for players. 

The aim is to engage players so thoroughly in the game that they don't feel like they're being advertised to. 

This subtle method of branding is about blending promotion with gameplay so that advertising feels like a natural part of the gaming experience.

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Chipotle Scarecrow Game

Source: IAB

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In-Game Product Integration 

Product integration allows advertisers to embed their products directly into video games, enabling players to not only see but also interact with the brand.

This integration can manifest in several ways:

• In-Game Items: Products are transformed into usable game items. For instance, a soft drink might appear as a health booster in the game.
• Billboards and Posters: In-game advertising is achieved through placing brand logos and messages on virtual billboards, posters, and other surfaces within the game environment.
• Character Outfits and Skins: Game characters can be outfitted in branded attire, showcasing logos and designs.
• Quests and Storylines: Brands can create or sponsor in-game missions and narratives centered around their products or themes.
• Virtual Events: Brands have the opportunity to host or sponsor in-game events and gatherings to promote their offerings.

Uncharted 3 and Subway

Source: The Guardian

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Monster Energy Drinks and Death Stranding

Source: Polygon

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Nike and Fortnite

Source: Blog

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In-Game Ad Types and Formats

In-Game Display

Blended in-game display formats are visual ads that are integrated into the gaming environment.

These image-based ads are placed strategically in high-visibility areas, offering brands an opportunity for meaningful, unobtrusive interaction with players.

In-Game Video

Blended in-game video formats are where video ads are used within the game. 

Far from being disruptive, these video ads enrich the gaming experience, blending storytelling with the interactive nature of games, thus providing advertisers a unique engagement opportunity with their audience.

In-Game Audio

In-game audio advertising offers a genuine approach to reaching gamers. This method combines the effectiveness of audio ads with the immersive environment of the game, giving advertisers creative ways to engage with their audience.

These audio ads can be integrated in two ways:

1. Player Opt-In: Players choose to listen to these ads, often in exchange for in-game rewards or benefits.
2. Continuous Play: Ads play automatically during gameplay, designed to blend with the gaming experience without being intrusive.

A key challenge with in-game audio ads is maintaining clear audibility without disrupting the game. 

Media partners tackle this challenge by carefully planning how and when these ads are delivered, ensuring they are heard clearly and at the right moments. 

These audio ad placements are known to enhance advertising effectiveness while preserving the gaming experience for gaming audiences.

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Maximizing Benefits of In-game Advertising

• Capturing Audience Attention: With 3 billion people actively gaming, in-game channels are key to gaining their undivided attention. These channels offer an effective way to engage audiences and promote brand awareness.
• Increase Brand Recognition and Reputation: Integrating your brand within games connects you with a vast audience. Seamlessly incorporated in-game ads not only increase brand visibility but also enhance memorability and recognition.‍
• Brand-Safe Ad Placements: In an era where brand perception is crucial, advertisers seek to maintain their brand's integrity in a safe environment. Contextual targeting tools are instrumental in aligning ads with appropriate game contexts, thus protecting and enhancing brand appeal.‍
• Measurability of In-Game Ads: The measurability of in-game ads may vary based on your media partners' reporting and analytics offerings, but overall, measurement remains a critical factor in evaluating the effectiveness of in-game advertisements. Whether these ads are clickable or non-clickable, advertisers can gauge the attention and performance metrics of their campaigns through insightful reports such as attention or brand uplift reports.‍
• Brand Lift and ROI: In-game ads significantly enhance brand presence and return on investment. These ads create deep connections with diverse audiences through immersive gaming experiences, allowing for precise targeting and real-time performance tracking, ultimately fulfilling marketing goals.

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Cost Implications for In-Game Advertising

Mobile gaming is the biggest app vertical at 90 billion global downloads.

According to Statista, about $46.7 billion was spent on advertising in mobile games in 2021, and this is expected to jump to a big $130.9 billion by 2025. These numbers show how important ads in mobile games have become.

Statista also predicts that in-game ads could make around $32.5 billion in 2023. They expect these ad earnings to keep growing at a yearly rate of 9.10% until 2027, reaching a huge $46.06 billion. This means more and more money is being spent on ads within mobile games.

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While we can't provide an exact figure for the average cost of implementing in-game ads, we can shed light on the factors contributing to cost complexity. Ultimately, the pricing structure is determined through agreements between advertisers and media partners.

The most common price method used in gaming ads is CPM (Cost per Mille). This means the price for every 1,000 times the ad is shown. The CPM cost can change a lot based on plenty of variables including the game type, ad format, targeting parameters, and the scale of the campaign.

For example, for video ads, it might be between $15 and $30 for every thousand views. Display ads in games usually cost between $10 and $20 for every thousand times they're shown. But these prices aren't fixed and can change a lot.

Some ads, like static ones or advergames, use a different method called flat-rate pricing. This means they have a fixed cost, which can be good for ads that stay in one place or depend on interactions rather than how many times they're seen.

As gaming gets more and more popular, the space for ads in games is in higher demand. In-game advertising is popular because gamers can be tough to reach through regular ads. Because of this high demand, the cost of ads (CPMs) might go up. Advertisers should be ready for this possibility.

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Examples of In-Game Advertising

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Tim Hortons in EA’s NHL ‘14

Source: IAB

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Techron billboard in Street Race Rivals Game 

Source: IAB

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Conclusion

To capitalize on the vast potential of gaming as an advertising medium, advertisers need to consider the insights shared in this discussion carefully.

Advertisers should begin by defining their goals within gaming channels and in-game advertising. 

They must tailor their in-game strategies to match their activation level, select the most suitable ad formats for their campaigns, and ensure these choices align with the chosen game and its audience.

At iion, we specialize in helping advertisers overcome the unique challenges of in-game advertising to boost growth for innovative brands and captivate immersed audiences. 

We streamline the process for advertisers across diverse gaming environments with our game advertising platform, immersiion. 

immersiion enables advertisers to effortlessly set up campaigns, create engaging rich-media ads, accurately target audiences across gaming platforms, and monitor campaign performance in real-time, all through an intuitive interface. 

For advertisers aiming to maximize their reach and effectively engage with their audience in the gaming world.

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Interested?

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