Candid Talk With Anzu’s Brand & Agency Sales Director Hendrik Menz and ESB

 

31 March 2020 | By Anzu



Hendrik Menz, Anzu’s brand and agency sales director, was recently interviewed by ESB Marketing Network, the group that conducted the Esports Business Forum at the Dreamhack Leipzig event this year. ESB wanted to deep dive into the rising market of gaming and in-game advertising, and that’s exactly what they got! The interview was featured as part of the ESB Marketing Netzwerk InGame Advertising Report. Read on for the full interview text.



Tell us about Anzu and your role at the company. 

Anzu.io is an in-game advertising platform that brings real-world brand advertising into video gaming and esports. For advertisers, we offer an efficient approach to programmatically deploying ads in IAB-recognized formats, allowing them to benefit from substantial tracking, reporting, and our one-of-a-kind ad viewability solution. Our game developer partners, on the other hand, have limitless advertising opportunities without interrupting the gameplay, giving them full control over content, ad formats, and analytics.  The Anzu platform is battle-tested and is currently running live campaigns with more and more games being added to our inventory each month. My role is to specifically garner interest among brand and agency partners, encouraging them to open up this sustainable, exciting new channel and utilize it for their brand awareness campaigns.


Let's talk about the in-game advertising market. We're talking about 3 Billion gamers in the world. 35 Million of them in Germany alone. How big is the in-game advertising market in Germany?

Germany is the home to the fifth-largest gaming market in the world--more than a third of Germans play. Revenues for games and hardware have increased by 11% compared to last year, and the total amount is expected to grow to 2.8 Billion € in 2020. Publisher revenue from in-game purchases has increased by 30%. Meanwhile, in-game advertising, a huge potential revenue stream for publishers, remains largely untapped.  The casual gaming market, where most of the players are, has been especially hard to access for advertisers. Anzu is determined to change that. Industry perspectives are promising--constantly growing user penetration in gaming and esports will create sustainable demand from brands, and is likely to further fuel the future growth of the in-game advertising market. 


A relatively small share of the 50 billion euro advertising market in Germany can be attributed to in-game. Is it because of the peculiarity that the games belong to publishers who have not yet understood the potential?

Publishers are willing and motivated, and are partly suffering from a lack of understanding of the gaming industry from a marketing perspective. Until recently, there was a cultural gap between game developers and brands. On one hand, the games want to monetise without annoying their audiences with intrusive ads. On the other side, the brands were desperately waiting to gain access to gaming audiences, aside from long-term collaborations and costly commitments. This is where Anzu comes in. We bridge that gap between brands and publishers, enabling efficient access with long-established success metrics and infrastructure.


Anzu ties in there and wants to act as a service provider, as a link between the publisher and the advertiser. How are the discussions with the publishers going, in which games can you already advertise?

The main reason we have not seen more ads in-game so far is because of the technical challenges that game developers have faced in order to fully adopt in-game advertising. Until now, hard-coded ad technology made it difficult and time-consuming for developers to integrate ads in games. Anzu has solved this issue by empowering developers to create dynamic ads that maximize game revenues, launch cross-promotional campaigns, and set up direct deals with their internal advertisers. 

We are thrilled to report that the feedback from developers is extremely positive. We are already working with a number of game developers across platforms. Exclusive partnerships with Vivid Games and Toplitz Productions are our latest additions, and we’re in advanced integration stages with gaming giants that will be announced soon.


One advantage of digital advertising on Google, Facebook and Co. is so-called targeting. The platforms know almost every detail of their users. Can publishers utilize a similar set of data?

Anzu offers advanced targeting options including hyper-location and interest-based advertising. Our platform makes use of the first-party data the game developers share. Such data can be relied on by advertisers while they are setting up their targeting preferences. 

On top of that, Anzu partners with third-party vendors to provide audience verification and data enrichment. Our exclusive partnership with TruOptik, for example, makes first and third-party data for enhanced audience targeting available for in-game advertising on consoles and OTT. 


Why should advertisers invest in in-game advertising, what is the advantage?

Statistics say that every third person on the planet plays video games. It is the new pop culture and the preferred leisure activity across genders and ages. Not only have we seen an evolution in their demographics, but also in the way they interact with games and how much they spend. 

In-game advertising is exciting for advertisers as more and more young audiences are moving away from traditional mediums to dynamic channels like gaming. Advertisers now recognize that they need to be present in front of this audience group to create effective brand connections. Additionally, wealthy and sophisticated consumers are playing games, too. Currently, 10 Million gamers in Germany are older than 50 years.

In-game advertising offers many benefits to brands looking for a fraud-free and brand-safe way to reach their users. Particularly now with technological advancements, more brands are saying yes to in-game advertising and its potential to move the needle with the new-age consumers.  


How do players react to advertising? One could hypothesize that players in the digital gaming environment do not want to be confronted with ads.

New-age young gamers also interact with brands differently and want more authentic connections and experiences. By offering immersive real-world advertising, brands can form instant connections with this user group. Based on a combination of industry research as well as the campaigns we have carried out, I can say that product placement within games is an effective way to increase brand recall. 

Thus, when the ads in games mimic real-world ads, players associate with them in a more positive manner and find them less intrusive. Such ads even serve to bolster the realism of the game, as opposed to made-up ads, which can feel forced and inauthentic.


Let's talk about the advertising formats. Individual collaborations between brands and publishers are no longer uncommon. Coca-Cola advertises in EA's FIFA - the film John Wick was installed as a game figure in Fortnite. But this is not your business. You want the scaleable mass market. What advertising formats do you offer, how can I imagine the in-game experience?

Brands have always expressed interest in associating with pop culture, and it is no different with gaming and esports. Led by a team of ad veterans, Anzu has understood from the very beginning that the key to success and scalability in the in-game advertising market lies in our ability to bring the innovative techniques of digital advertising to the world of video games. 

We integrate in-game ads in IAB-recognized formats programmatically, offering advertisers standard and custom ad formats that go beyond the static banner. These ads depend on the gaming environment and brand preferences, and their immersive nature means that they can be equated with the real-world ads you see every day.


Tracking is another key word. What are the options for in-game advertising? Can I retarget the player multiple times and measure the visibility of my advertising?

Ad viewability and measurability are main concerns for brand advertisers and their willingness to adopt in-game advertising. At first, Anzu developed a proprietary 3D ad tracker, providing real-time verifiable tracking and measurement of ad performance. Then, in partnership with Cheq, we introduced the first-ever ad verification solution for console gaming. Recently, Anzu and Cheq partnered to pilot an independently verified programmatic in-game advertising campaign. 

The in-game campaign, which displayed ads from prominent consumer brands, saw a 23% increase in viewability compared to traditional digital display advertising. With Anzu, advertisers pay only for viewable ads, with higher visibility and therefore can be confident their campaigns are effective and their budgets are allocated in a proper way. With the optional connection of any common demand side platform, the advertiser has complete control over their established processes.


Is it possible to run sales campaigns with in-game advertising? I imagine it is difficult to enable direct links in games.

Anzu’s tech offers interactive custom ads, but the question is what the user wants and tolerates. Our philosophy is to introduce brand advertising as an immersive part of the gameplay, to add realism to the game while offering the game developer a new stream of revenue. 

When in-game brand interaction is more established, I can imagine a complete sales journey without even leaving the game. Click-throughs have been established as a standard KPI in digital advertising, although time and time again, research shows us how little impact clicks actually have on brand awareness or even performance goals. We aim to enable impactful interactions with brands, validated for each campaign with industry-standard reporting and third-party brand lift studies.


What growth rates of ad spending in the games industry have been recorded in recent years, what forecast do they give for the future?

According to eMarketer, ad spend in games grew by 16% in 2019 and will continue to grow thanks to better ad technology and the rising popularity of gaming. The US in-game market alone was expected to exceed $3 billion in 2019 across devices. Based on the current trends and the rise of esports, the numbers will continue to go up steadily.


What options do I have with you to place in-game advertising, which CPMs can I expect?

Advertisers have flexible options to get started with in-game advertising. We work on a CPM model which is basically a combination of the platform, ad format, country you want to target, and game you want to appear in. This puts me in a position to quickly and individually answer concrete campaign inquiries with guaranteed prices.




Anzu.io is an in-game advertising platform that brings real-world brand ads to video gaming and esports. Backed by BITKRAFT Esports Ventures, WPP, and Axel Springer Digital Ventures, Anzu redefines digital advertising through seamless integration of non-intrusive ads into the gameplay. Bringing real-time data and programmatic to the video gaming world, the platform promises native advertising, brand safety and ad viewability. Follow Anzu on LinkedIn, Facebook and Twitter.