Stymied by the wettest summer since records began, with their activity at traditional sporting and music events dampened by the rain, marketers have been turning to video games to promote their products.
Gamers are highly receptive to marketing messages and accept that ads do not spoil the gaming experience, provided they are placed sensitively, according to research released last week by CNET Networks UK and the Internet Advertising Bureau (IAB).
The survey, conducted among 3500 UK gamers, revealed that more than half had seen an in-game ad during the past year, a third said they were more likely to purchase a product they saw advertised there, and almost two-thirds said they felt positively toward the brands they encountered. 'If in-game advertising is realistic, contextual and non-intrusive, there is great potential for brands,' says Jill Orr, managing director of CNET Networks UK.
Despite being in its infancy, this sector is forecast to do big business. Research and consultancy firm Yankee Group predicts that the in-game market will be worth more than £526m by 2011, up £484m from last year.
This arena has been made all the more attractive by the fact that consumers are spending more time immersed in virtual worlds at the expense of other media, including TV, radio, print and the internet. The IAB/CNET study showed that as a result of gaming, 76% of players watch less TV, 37% listen to the radio less and 34% read fewer magazines or newspapers.
Encouragingly, gamers expressed a positive attitude toward virtual ads, with 96% saying they would welcome more in-game ads if they led to a reduction in the cost of a video game.
Yet there remains some confusion as to what constitutes in-game advertising, with 17% of players unable to differentiate messages from background scenery.
Ford, Nike, Unilever and Samsung are among the vanguard of brands trying to get consumers more used to seeing - and recognising - brand involvement in games. Ford supported the release of its Fiesta ST model with ads in racing games Need for Speed Carbon, TOCA 3 and Trackmedia Sunrise, while Nike, Samsung and Unilever ran test campaigns in a series of shoot-'em-up titles.
A few advertisers have gone a step further and created their own branded video games. Burger King recently partnered with games developer Blitz Games to create titles based on its US brand icons. It also developed three games for the Microsoft Xbox 360 console and distributed them through its US outlets at $3.99 with the purchase of a value meal (Marketing, 25 July).
'Games publishers are realising that, in the future, a larger proportion of their revenue will rely on in-game advertising,' says Kieron Matthews, head of marketing at the IAB. 'They are working harder to offer marketers a compelling route to target gamers with real-time advertising placement.'
As next-generation consoles Nintendo Wii, Sony PlayStation 3 and Microsoft Xbox 306 allow gamers to play each other via the internet, marketers can take advantage of dynamic in-game ads that can be served on a minute-by-minute basis. Geo-targeting, meanwhile, enables ads to be targeted to consumers in specific countries.
Advanced in-game advertising techniques such as this are currently limited to PC and Xbox 360 titles, but Nintendo and Sony are preparing to open up a range of their own games.
As in the real world, the most popular in-game advertising formats are the simplest. Virtual billboards and shop fronts are commonly used, but forward-thinking brands are experimenting with embedding their products in the structure and narrative of the game. This allows consumers to improve their in-game performance by virtually consuming a particular brand of soft drink or driving a certain make of car.
Thanks to the internet, all of these ad formats are accountable. Brands can monitor the in-game behaviour of consumers, tracking what they see, from what angle and for how long. This means that advertisers pay only for the impressions they receive, making campaigns highly cost-efficient.
Yet the growth of the sector continues to be hampered by the lack of an industry-wide trading currency, with each in-game advertising network and media agency currently working to a different set of rules. 'There's no standardised trading currency for online advertising,' says Nick Suckley, co-founder of digital media agency Agenda21. 'It's hard to put a value on in-game advertising because it's so diverse.'
Once such teething problems are resolved, in-game advertising is expected to boom. Internet giants Microsoft and Google have already realised the sector's potential, snapping up in-game ad specialists Massive Incorporated and Adscape Media for $300m and $23m respectively.
The sector is still finding its feet, but where big-name brands including Burger King, Nike and Ford have led, others look certain to follow.
Data file: in game recall
Brand Recall (%)
1 Burger King 6.1
2 Axe/Lynx deodorant 5.5
3 Dodge 3.8
4 Nokia 3.5
5 Other EA Games 2.7
6 Intel (non-specific) 2.4
7 Adidas 2.1
8 Intel Core 2 Duo 2.0
9 Reebok 1.7
10 Airwaves 1.4
Source: Internet Advertising Bureau/CNET