IGA Worldwide and Double Fusion are key players at the heart of the rapidly growing in-game advertising market, which the Yankee Group predicts will be worth $971.3 million by 2011. But who’s benefitting from this market growth and an increasing number of fancy ads in videogames? Not just a bunch of men in suits but game creators and players too, according to IGA’s co-founder Ed Bartlett and Double Fusion’s European MD Frank Sagnier.

In-game advertising isn’t as young as some might believe. In fact, advertising has been present in games for almost as long as the medium has been around – just stretch your memory back to OutRun in the 80s, the pervasive Chupa Chups lollipop advertising featured in 90s Amiga series Zool, or to the commercial billboard advertisements in EA’s early FIFA International Soccer offerings, says Bartlett (pictured top left), who also serves as IGA’s VP of publisher relations Europe.

“[In-game advertising] goes back a long, long way, but by and large these were barter deals or free deals or they came with the game franchise," he says. "The beginnings of paid for in-game advertising really came around in about 2002, 2003.”

Another major shift in the market occurred in late 2004 with the advent of dynamic in-game advertising. As opposed to static advertising, which has to be hard-coded into titles and can’t be changed at a later date, dynamic advertising, delivered over broadband, enables companies to alter ads within game environments remotely, meaning they can be switched or updated over time, so for example ads can be tailored to a geographical location or a time of day, or tweaked to reflect a shift in the emphasis of a marketing campaign. “Proper targeting can mean that ads are served to relevant consumers at the right time,” says Sagnier (pictured top right). Essentially a rolling ads system which introduces fresh or updated content allows firms to better target consumers and generate greater revenues.

But what do gamers think about in-game ads in general? A recent study conducted by Nielsen Media Research on behalf of IGA, which surveyed over 1,300 PC gamers, found that 82 percent of consumers felt games were just as enjoyable with ads as without, while 60 percent said that ads caught their attention, made games more realistic and didn’t interrupt the experience.

“There have been other surveys as well that have specifically found that the majority of gamers actually like to see the ads there as well,” says Bartlett, “so it’s not just about them being indifferent. They actually like to see them and the main reason is that [ads can aid] the suspension of disbelief which is obviously a very important part of the game experience. If you’re playing an immersive game and you’re in an environment where you would expect to see real advertising… then having ads there, providing they’re contextual and they’re relevant to the demographic and the genre of game, adds to the experience.”



Sagnier agrees that, if delivered correctly, in-game ads positively impact realism. “If served contextually or sympathetically ads do not hamper the gaming experience and on occasions can enhance it,” he says.

Aside from adding realism, in-game advertising is also helping to grow the free-to-play games market and the amount of subsidized gaming content available to consumers.

“Another key benefit is that advertising can enable free or partly free gaming, which undoubtedly broadens the gaming audience and gives gamers more choice,” says Sagnier.

“We’re definitely seeing financial benefits for gamers,” Bartlett adds. “Although I don’t think we’ll see a situation any time soon where in-game advertising offsets the costs of the bigger triple A multiplatform console games, where we are seeing cost benefits is in PC and online gaming and also in downloadable content.”

TrackMania Nations for PC is one example of an extremely popular free-to-download and play title completely funded through in-game advertising. “This is a full retail quality game with a huge amount of online playability and community,” says Bartlett. “We’ve had over 9.5 million downloads.” Another example is id Software’s upcoming free-to-play Quake Live, announced by the developer and IGA at GDC 2008.

“We’ve also seen numerous subsidized downloadable content packs, so for example car manufacturers giving away new vehicles in racing games,” Bartlett adds. “Intel sponsored the creation of a whole new map for Battlefield 2142, and that delivered over £2 million pounds worth of value to the end users had it been charged for at the normal map pack price. So I think there are definitely tangible benefits to the end user.”

While Microsoft-owned in-game advertising firm Massive Inc exclusively handles in-game ads for Xbox 360, IGA and Double Fusion recently signed agreements to deliver dynamic in-game advertising to PS3, so it's more than likely that some of the plus points of in-game ads often associated with PC titles will be seen at work in games for Sony’s platform in the not too distant future as well.