gamers like product placements in the games
Product placement adds to the "reality" of the experience. It is true, isn't? Instead of going through some ghost city in the game, you can go through the actual city with its mcdonalds and starbucks, etc. Almost like our zoomcity game!
In addition, the study shows that product placement is actually effective. 69% of gamers actually remembered the ads they saw in the game. This is a good news for the game makers and for the advertisers who worried about losing the media.
But, could it be the case that gamers react positively to the ads while it is still minimal?
Advertising:
THE VIDEOGAMES INDUSTRY, on the cusp of technological changes that could make game audiences far more measurable, is taking more steps to tap a potentially lucrative new source of revenue: advertising dollars.
Today, VNU NV's Nielsen Entertainment plans to release the results of a study funded by Activision Inc., one of largest games publishers, that is the most exhaustive effort yet to investigate the effectiveness of advertising within games. Rather than traditional 30- or 60-second TV-style commercials, advertising in videogames often takes the form of product placements that appear blended into the action on the screen.
A key finding of the research: A majority of gamers in the study found relevant advertising enhances the realism of games, a relief for publishers who worried that players would get annoyed by frequent product promotions. "This is building a stronger case for valuing the medium," says Michael Dowling, senior vice president at Nielsen Entertainment.
Better research on ads in games could help further pique Madison Avenue's interest in the medium, just as new game consoles like Microsoft Corp.'s hot-selling Xbox 360 are expected to greatly expand online gaming, a technological shift that will give advertisers greater power to figure out how frequently and what types of gamers see their promotions when they, say, hop on a virtual motorcycle and jump through hoops sponsored by a candy-bar maker. Internet-connected consoles could also increase interest in delivering fresh ads over the Internet.
The Nielsen study is part of an effort by the media-research firm and Activision to lay the groundwork for more-serious advertising in a medium that had $25.4 billion in world-wide sales last year, according to PricewaterhouseCoopers LLP. In a study last year, Nielsen found videogame playing is eroding television viewership among men 18 to 34 years old, results that have been echoed in other research of media consumption. While Activision has funded Nielsen's games research, Nielsen says results aren't influenced by the publisher.
Nielsen's most recent study followed 1,350 active male gamers ages 13 to 44 as they played various games, including an Electronic Arts Inc. racing game in which players pass billboards and receive instructions through message windows sponsored by Cingular Wireless, the cellphone provider owned by AT&T Inc. and BellSouth Corp. The study found 69% of participants recalled seeing the Cingular ads.
While most game publishers are already experimenting with promotions within their games, executives say ad revenue is minuscule. Executives say advertisers currently can pay several hundred thousand dollars to have their brands appear in games, though deals are often struck in a willy-nilly fashion. Games publishers would clearly like to get more money for serving up a prized, highly attentive demographic.
Bobby Kotick, Activision's CEO, says the company hopes to use data from the Nielsen study to develop a "rate card" for game advertising -- a more systematic approach to charging for various levels of promotions in games, including everything from the billboards that users zip by on virtual ski slopes to branded vehicles they hop into on the lam from the police.
Mr. Kotick says new game consoles -- including Xbox 360 and Sony Corp.'s PlayStation 3 due out next spring -- will also help build the foundation for more advertising in games because they are expected to be much more widely connected to the Internet than current consoles like the original Xbox and PlayStation 2. "You have ability to track millions of interactions" with advertisements, Mr. Kotick says.
Microsoft has quietly formed a team focused on exploiting the advertising capabilities of Xbox 360. The company has made it much easier for Xbox 360 users to get connected to the Internet and expects more than half of gamers on that console to be online, compared with 10% to 15% of original Xbox users who are online.
Being connected to the Internet "takes advertising in the gaming environment to a whole different level," says Aaron Greenberg, group marketing manager for Xbox Live at Microsoft.
People familiar with the matter say Sony is also looking more seriously at advertising in games as well. A Sony spokesman didn't respond to a request for comment.
Consoles connected to the Internet can also receive fresh ads regularly delivered to them in games, as is becoming commoner in games played on personal computers. It is already starting to happen: Since September, players of a combat game from French publisher Ubisoft Entertainment SA called Rainbow Six Lockdown have seen ads piped into the game over the Internet on the original Xbox through a game advertising company called Massive Inc.
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Ad Notes . . .
ADVERTISING HOT SPOTS found in Brazil, Russia, China and elsewhere overseas, according to report.
ZenithOptimedia is calling for global ad spending on major media to increase 4.8% in 2005, down from 7.4% in 2004, thanks to the absence this year of the Olympic Games, U.S. presidential elections and World Cup soccer. Global ad expenditures are expected to rise 5.9% in 2006, ZenithOptimedia says.
The Publicis Groupe media-buying firm sees growth coming less from maturing markets such as the U.S. and Western Europe, and more from countries such as Brazil, Russia, China, Indonesia and India. Generally speaking, growth in these upstart areas is fueled by expanding media opportunities and a growing consumer market, says Steve King, ZenithOptimedia's worldwide chief executive.
Advertisers will spend more on the Internet and market research in coming years, the firm predicts.
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