The Time For In-Game Advertising is Now: are you ready for it?

2022 has been a huge year for in-game advertising and, with predictions that the industry is forecast to generate $18bn by 2028, it is showing no signs of slowing down. If you need further evidence just take a look at the photos from IAB UK’s most recent Gaming Upfronts event, which saw many of the globe’s biggest brands and agencies pack into The Steel Yard in central London to hear what the future has in store for the world’s fastest growing entertainment channel.
 

Setting the scene

Anzu specialises in non-disruptive intrinsic in-game ads, with an emphasis on ‘non-disruptive’. The reason this type of advertising is gaining momentum is that it benefits all parties involved; advertisers who get to reach their audience within games where players are fully engaged and not looking away or distracted by second screens, developers who earn significant revenue from brands running their ads within their games, and players who receive the games, updates, and add-ons for a discounted price, and often for free.

In a recent webinar hosted by Anzu, Marc Merrill, President of Games at Riot, said that he had heard from many dedicated 'League Of Legends' players who were asking the company to bring ads to their gaming tournaments because they were worried Riot was losing money and may not be able to continue running them.

Without advertising we would not have many of the services we rely on today, and if we did and the public funded them, they would be reserved for the few who could afford them. As ads continue to disrupt the gaming sphere, there has been pushback from many players and game developers whose understanding of advertising in games is based on intrusive pop-ups, rewarded formats, and banners, many of which take away from the gaming experience.
 

Respecting gamers & their passion

Advertisers need to understand that many gamers are incredibly passionate about the games they play and are overprotective of their stories, environments, and communities. If you are a gamer, and with over 3.2bn players globally and counting, the likelihood is you are, this is easy to understand as games provide a sense of immersion and involvement resulting in players becoming extremely attached to the game’s characters, worlds, and narratives. 

This is one of the reasons why we see so many studios successfully leverage gaming IPs to create blockbuster films, TV shows, literature, and merchandise, and why there is so much pushback and criticism when the IP gets tampered with - remember how much flack Paramount got for the ugly Sonic that appeared in their first film trailer? So much, in fact, they completely changed how he looked for the film, which then broke box office records and produced two sequels and a spin-off currently in production.

So what’s the lesson here? Well, it’s that when coming to games, advertisers need to be extremely mindful of how different the environment is from other digital channels. Don’t get me wrong. Not all players are against advertising in games. They just want it done right. We heard this from Marc Merrill, and it was echoed in research we carried out earlier this year to find out how gamers felt about in-game ads. The answer - 70% were either positive or neutral towards them, and the overwhelming majority said the golden rule for advertisers was to ‘always make your advertising as relevant as possible to the environment’.

The stars align

The good news is, as an industry, we are getting there. Last month Google announced updates to how its ads work on Android, signalling a further shift away from interruptive advertising. This comes off the back of a new study from the Coalition for Better Ads, which found that viewers of interstitials spent 22% of their time looking for the X button; ads that take up more than 30% of the screen harm the user experience; and smaller ad types within non-intrusive ad placements resulted in higher ad experience ratings and were less annoying.

Around the same time, the MRC and the IAB released a new update of the in-game advertising guidelines, which was long overdue, being the first proper update since 2009. With updates to ad sizes, viewability, reporting, and much more, many in the industry have seen this massive overhaul as a signal that all the components are now aligned, establishing in-game advertising as a viable ad channel alongside other traditional digital mediums.

Another significant movement is the emergence of in-game ads in AAA console and PC titles. Earlier this year, both Xbox and PlayStation announced they are working on strategies that involve bringing in-game advertising to their platforms. As they both try to find the balance between offering reasonably priced games and subscriptions and the extremely high costs associated with producing AAA titles, many expect this to happen sooner rather than later.

Putting console aside, Anzu already works with many popular AAA PC titles and has just launched its ad placements in Saber Interactive’s Dakar Desert Rally which was available for advertisers to play at the recent IAB Upfronts event. Why is this important? It signals a wider move to in-game advertising being thought about in terms of AAA games across PC and console, rather than just on mobile. This is a trend that will become more common as AAA developers continue to understand the opportunities in-game ad monetisation offers them, and players accept that the revenue developers received is passed onto them in terms of updates, better gameplay, and discounted titles.

To quote Anzu’s Co-Founder and CEO, Itamar Benedy, during the IAB’s US Gaming Upfronts in New York earlier this year, “the stars have aligned for in-game advertising”, and with a constant string of updates all favouring the rise of in-game advertising, it’s hard to argue with him. We are now at a point where advertisers have to make a choice: either jump in, begin building out a gaming strategy, get a head start by testing what works and what doesn’t, learning where their audiences are and what they play, or sit back, watch others succeed, turn up late to the party, and try catching up. As a gamer (and a very competitive one at that), I know which group I’d be in!