In-Game advertising delivers breakthrough results: Initiative Report

Now, this advertising phenomenon isn't that old, relatively speaking. It actively caught on in trend only in the early 2000s and in 2005, the spending on IGA was estimated at US $56 million. This figure, if pundits are to be believed, is poised to grow to US $1 billion by 2014.

In-game advertising is a new revenue stream, allowing developers to offset growing development costs. Advertisers see in-game advertising as a prime way to target the male 18-34 demographic, who are increasingly neglecting television in favour of computer and video games.

There are essentially two types of in-game advertising formats ' static and dynamic. There are technologies available which, when incorporated in the IGA, will be based on build-in facial recognition program that will allow for more accurate targeting of dynamically served ads. That is insanely cool!

They key concept behind IGA revolves around the product. Brand management, advertising, branding, underwriting, direct marketing, personal sales, product placement, publicity, sales promotion ' these are just some of the promotional content achieved by in-game advertising.

The industry reaction to IGA format has been generally positive. Advertisers are keen to penetrate into the 18-34 male population bracket and IGA is seen as one of the best mediums especially because TV viewing figures for this set of audience is falling. A 2003 study by Yankee Group showed that about seven percent decline in TV viewing in the 18-34 male demographic could be directly attributed to computer games.

The previous estimate notwithstanding, Massive Incorporated suggests that the enthusiasm, along with the new possibilities offered by dynamic advertisements that has prompted a growth in the in-game advertising industry, which generated US$56 million in revenue in 2005, and could grow up to as much as $1.8 billion in 2010.

Initiative ' a media, marketing and digital company ' carried out a detailed study of this important and growing digital platform. In-Game Advertising highlights the phenomenal growth of video games around the world and the huge market for in-game advertising this created.

It explains the different types of in-game placements, the benefits and opportunities for advertisers and details three key case studies from Initiative: Kia Soul, Dr Pepper and Lionsgate "The Spy Next Door". Each of these advertisers has seen breakthrough marketing results from their in-game activity.

Commenting on this growing phenomenon, Mr. N.P. Sathyamurthy, CEO, Karishma Initiative, said, "This is the next generation of advertising that we should be looking forward to. Its impact as we can see from the study is already proven. We will move towards incorporating the same into our media recommendations as may be necessary."

The games industry sees this as a promising revenue stream and is expected to gain an extra $1 to $2 per game unit sold. Game development costs are expected to go to a level of $20 million per title and IGA is seen as a way to offset that. The extra revenue will enable more innovative gameplay and new ideas. IGA has so much of an effect already that it has even replaced purchase price as a revenue model for some mobile phone games.