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Ads of the Future: In-Game Advertising

posted by Melanie DAcchioli @ Wednesday, November 26, 2008 - 1:16 PM
In-game advertising is well on its way to becoming a mainstream ad unit. Over the past couple of years, gamers have seen an increase in virtual billboards and posters for actual advertisers appearing in popular video games. The image below is an example of an Adidas billboard in the FIFA International Soccer game.


Additionally, the emergence of Second Life has created an entire virtual world for advertisers. This type of video game experience is able to host persistent and ever-present advertisements, including not only static ads but also meaningful brand engagements such as virtual stores, dealerships, hotels, etc. Second Life created a sort of test market for advertisers and their products.

Unfortunately though, the virtual world of life as an avatar has only so much penetration in the consumer world. While Linden Lab, the creators of Second Life, report that there are 2,325,015 "residents" of second life. However, ccording to CNET, “The real number of active, individual users who log in on a recurring basis (users who sign up and return on an ongoing basis, though Linden Lab doesn't specify how often that is), is more likely in the 200,000 to 230,000 range, according to internal metrics used by Linden Lab, as well as calculations by others in the industry.”

But there might be some hope for the world of avatars yet. With 14 million users, Xbox Live, the online service for Xbox 360, has released a new product- Xbox Experience. Xbox Experience is a new Xbox 360 platform in which gamers create a custom avatar, which they will use to interact with other players in the Xbox Live universe.

Online Media Daily said that sponsorships of avatar clothing, accessories, shoes, etc. by advertisers such as Nike and Puma is something Xbox Experience is looking into providing in the near future, according to Mark Kroese, general manager for Microsoft's Advertising Business Group in the Entertainment Devices division. The opportunities for in-game advertising therefore become endless.

“Microsoft will monitor how gamers use the Experience platform and build the next generation of advertising services based on those trends,” Kroese said. “The platform offers AT&T, Lionsgate, Paramount Pictures, Nike, Sprint and other brands interaction with gamers by reaching into the home like television and measuring the impact similar to PC-based ads.”

The brand interactions offered by ads within Xbox Experience is meant to be unparalleled by any other type of in-game, video, or television advertising that has ever been offered before. Additionally, Microsoft is adding in functionality to geo-target and day-part ads, thus helping advertisers to reach their target audience, just like television advertising.

But unlike television advertising, ads within Xbox Experience can be clickable, connecting to landing pages that, according to Online Media Daily, historically average 3.5 page views.

Microsoft is therefore using the Xbox Experience platform to create ads that are a tight integration of search, television, and in-game ads all-in-one. These ads have enormous potential and it will be interesting to see their results.

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