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In-Game Advertising: Effectiveness & Statistics

Instructor: Lauren Riley

Lauren has taught college level organizational behavior and has a master's degree in Business Administration.

In this lesson, we will define in-game advertising, discuss the different methods used in this practice as well as its effectiveness as a marketing channel.

In Game Ad

Introduction

The last time you powered up your Xbox, do you recall seeing or interacting with any ads? Chances are you did, even if you didn't realize it at the time. In-game advertising (IGA), or the act of advertising in computer and video games, has become increasingly popular as the gaming industry looks to monetize its products while providing maximum value to their players. It can take on several forms, which we will discuss in more detail during this lesson.

Overview of In-Game Advertising

While IGA is often seen as a relatively new marketing tool, the first known instance of IGA occurred in 1978, when the computer game Adventureland included a promotion for its next game Pirate Adventure. Ads can be integrated into the game through a background display (think banner ads), on a loading screen, as part of gameplay (for example, needing to find and drink cans of Coca-Cola to make your character's constitution increase) or during a cutscene, a sequence in a game that is not interactive, which moves the story forward.

There are two main types of IGAs: static and dynamic. Static IGAs cannot be changed once they have been programmed into a game. Similar to a product placement in a movie, Static IGA features a product or service within the gameplay. Gamers can interact with the virtual product like in our earlier Coca-Cola example or ads can be included in a background banner or during a cutscene.

Dynamic IGAs allow game creators to update ads after the game is launched, track ad metrics, and customize ads based on a gamer's geolocation. Ads can be monitored and analyzed as they are being deployed and updated based on user interactions. Dynamic IGAs also allow advertisers to micro-target gamers in a particular location or create different ads for gamers based on their location.

IGA Stats

In-game advertising is a growing market segment. In 2004, IGA generated $34 million in income. This number has grown substantially, hitting $80 million in 2006 and $699 million in 2009. For context, the overall US digital ad spend in 2014 hit $49.5 billion in 2014.

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