Commercial Console: Video Games and Virtual Advertising
Advertisements have been an integral component of electronic media for decades, though they are rarely associated with video games. However, advertisements have been appearing in video games since the late 1970s and have become imbedded within the video game industry. In-Game Advertising (IGA) has attained a much broader influence in recent years, garnering polarized opinions on how beneficial its effect will be. TechCrunch commented on this divide stating that dissenters contend “…in-game advertising will ruin the video game industry altogether, while others believe standards will spur industry growth…” 3. Regardless of which side may be correct, it is evident that the presence of IGA is increasing and in the process is changing everything from perceived ad quality to the network effects that influence consumer response.
Consider the effectiveness of digital advertising as compared to more traditional media. Companies like Google can sell ad space tailored to the perceived interests of the individual in real-time. This allows advertisers to greatly refine their target audiences in order to appeal to people who may show an interest in their product. Although IGA cannot match ads to consumers based on search preferences, they can target specific demographics and populations subsets with one common interest: the video game. For example, Adidas can achieve a far more personalized advertising strategy by purchasing ad space in sports games where the user has already shown interest in the game’s content 4. Consumers can also observe certain products being used within the game and often their attention is focused solely on the console and not on other forms of media 2.
If we analyze the network effects of online gaming collectively, it is apparent that the more individuals playing, the greater the satisfaction of the user base. Assuming the servers and bandwidth are sufficient to host a sizeable number of participants, the presence of advertisements within the game will not significantly harm the user’s experience. This is a considerable advantage since the repeated presence of a single ad, such as a billboard promoting Adidas, will be permissible in the game setting, while a repeated television ad has decreasing value with each additional appearance.
Embedded advertising within the world of digital gaming has far exceeded the realm of consumer products and general services. In 2008 and in the most recent 2012 presidential election, IGA was used to promote political campaigns, particularly targeting undecided voters in swing states. The logic is simple. States with consistent hard left or right party preferences do not require heavy advertising. Thus, only games sold in swing states are needed to influence undecided voters and ultimately produce a cascade within local gaming communities to favor a certain political party. Using this rational, “campaigns that want to reach young males in Ohio might do better buying space in Madden than during The Ellen DeGeneres Show.” 1
Whether the practice of in-game advertising is enhancing or diminishing the quality of gaming for consumers, it is certainly becoming more prevalent, publically influential, and economically profitable for the gaming industry as a whole.
References:
- http://www.npr.org/2012/10/01/162103528/presidential-campaigns-rock-the-gamer-vote
- http://www.nytimes.com/2011/06/21/business/media/21xbox.html?_r=0
- http://techcrunch.com/2009/03/24/study-in-game-video-advertising-trumps-tv-advertising-in-effectiveness/
- http://en.wikipedia.org/wiki/In-game_advertising