In-Game Advertising 101: Understanding How Advertising in Video Gaming Works

16 September, 2019 | By Natalia Vasilyeva

Advertureland includes its first
product placement to advertise
its game Pirate Adventure.
FIFA experiments static brand
ads on billboards in the first of
its video game series
RTB and Ad Viewability comes
to in-game advertising
The PGA Tour/Tiger Woods golf series
had almost 2100 identifiable brand
images such as Nike’s branding
Zool: Ninja of the Nth Dimension features
one of the first and basic cartoon-style
game brand ads for Chupa Chups.
Advergames became a norm
following example of Pepsiman
President Obama’s campaign
experiments with various EA features,
such as Burnout and NBA Live

Marketers are always looking for new ways to bring in audiences for their advertising messages. Each new medium has brought with itself new opportunities for advertisers wanting to use it to sell their products and promote their brand, and even make loyal users as high-paying customers. As an entertainment channel, video games have existed for long on PCs and later on consoles. But its advertising potential is only being explored now as brands realize they can achieve scalable results with clever in-game advertising techniques.  

The Early Days

Image source:

Image sourced from Console Obsession

Image source: 10 min gameplay/YouTube

Before I go into explaining how modern-day advertising works on video gaming, let us first take a step back to understand the evolution of video gaming as an advertising medium. Advertising in video games isn’t new. Back in 1978, Advertureland included its first product placement to advertise its game Pirate Adventure. In 1992, Zool: Ninja of the Nth Dimension featured one of the first and basic cartoon-style game brand ads for Chupa Chups. FIFA featured static brand ads on billboards in the first of its video game series in 1994. Later, such product placement then became a norm for brands in late 90s. Even though the tech was limited and once the game was released to the public such static ads couldn’t be changed, yet it was groundbreaking for that era for games to feature such form of advertising. Sometimes games were also created specifically for the purpose of promoting a brand, known as Advergames. A prominent example is 1999’s Pepsiman. Often, such types of product placements were quite restrictive in its placement and creatives. During these decades, video game advertising in the form of static banner ads were the norm. One of the most distinguishable in-game ads came from EA Nike’s branding in the Tiger Woods PGA Tour 2002, supposedly having 2,100 identifiable brand images!   By the time the advanced models of consoles such as Playstation and Xbox came out, games started to become more realistic and technological advancements bought a new level of sophistication to video game advertising. Advertising in video games accelerated at an astonishing speed, led most notably by sports games such as FIFA and NBA. Gamers could experience ads that came close to real-world, often in the form of pop ups, replays or ads placed in the stadium setup. Still, gaming as an advertising vehicle was under-explored and not enough brands were ready to test the waters. Game developers, too, were not sure how to make advertising work in their games without harming the gameplay.  

The Present 

In-game advertising has now evolved into an advanced space. Traditional models of advertising in the mobile space have been applied in video gaming space, bringing in interest from both brands and game developers. Today’s video game ads are a ripe playground for both brands and game developers to reach new unexplored audiences and enhance gameplay while remaining sensitive to the needs of the core gamers. The biggest strength of video gaming today has been the availability of scalable advertising solutions, something which was lacking two decades ago and made advertiser interest limited. For game developers, the opportunity is huge to open up a new monetization stream and experiment with the free-to-play model that saw huge success in the mobile gaming space.

Image Source: Marshmello/YouTube

Big game studios such as Sony are already offering some free-to-play games. Epic Games’ Fortnite has been riding a success wave with free-to-play on consoles and makes money via microtransactions on new player outfits or missions. They also made news for the virtual concert of Marshmello in its game that made others take notice of new and creative ways in which advertising can be explored in games.    Now, advertising in video games is served such that it is conscious of the game environment and blends in a non-intrusive manner with the gameplay. Combined with strengths of programmatic technology and ad viewability in video gaming offered by Anzu, in-game advertising space has found a new boost from the industry. Improved industry-standard creatives served via programmatic channels have made ads more acceptable and the availability of verification standards offer detailed insights into how the ads are viewed. Anzu, for instance, launched the first ad-verification solution for 3D video gaming together with Cheq.   The changing characteristics of the video gaming audience has also contributed to the change in mindset of brands. Gamers were no longer bored teens hanging out in their living rooms using gaming as a form of entertainment. This, in turn, changed gaming’s perception from an entertainment escape to become pop culture in itself. In the last decade or so, gamers have become sophisticated and have greater purchasing power. Today’s gamers constitute a wide user base, with varied income and ages. In fact, a study reports the audience for gaming is more than the combined audiences of HBO, Netflix, ESPN and Hulu. 90% of US teens are hooked to their consoles, pushing brands to explore the potential of marketing to these unexplored user group.   

The Future 

Video gaming market is booming and generated $43 billion in revenue in 2018. In-game advertising ecosystem is changing daily, with both brands and game developers working their synergies in creating new opportunities in the medium. Gaming has seen a massive shift across income levels, genders and age groups. More and more people are moving to gaming and moving away from traditional entertainment mediums such as television. According to research, 30% of US consumers pay for a gaming subscription service and 41% play video games weekly. Gaming is moving out from being an entertainment source to being integral to how new-age young users form connections with their friends as well as with their preferred brands. 

Image Source: Anzu, Final Kick Game by Dark Curry

As brand collaborations with game developers become more common, the industry will move into a structured ecosystem demanding more advanced measures of viewability, analytics and real-time data to improve campaign performance, in turn driving more brands to test the medium. Bringing realism to games through advanced product placement, gamers are more likely to make connections with the brand. This is an exciting time to watch the growth of the industry and as the entry barriers get broken down by tech and product innovations, the possibilities are endless for marketers. 

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Natalia Vasilyeva has been in the AdTech industry since 2013 and is currently VP Marketing at Anzu. She is a hands-on marketer with an extensive experience across different business domains. Natalia brings expertise in branding, positioning and content as well as strategic and managerial excellence to Anzu She is a dog lover and an advocate of sustainable living. Connect with her on LinkedIn.