Why is In-Game Advertising Failing? In a recent article by Digiday, it was
reported that the growth rate of in-game advertising has been slower than that of other emerging channels such as social media and CTV. While video game ad revenue increased by 7% in 2022 compared to the previous year, social media revenue grew by 16%, and CTV revenue grew by 32% in the same period. This could be attributed to the perception that video games are still largely seen as an experimental channel. Brands are trying to find their authentic fit within the gaming community, and more
brands and agencies will lean into the space once they feel comfortable. Despite the fact that video games rank third in how people spend their spare time in the US, with audiences playing video games for an average of 11.8 hours per week, compared to 12.1 hours on social media and 13.9 hours watching TV, most brands and agencies spend less than 5% of their marketing budgets on video games.
The recent IAB study found that half of agency respondents said that brands are more comfortable with traditional media like linear TV, which holds them back from committing to video game spending. Meanwhile, a third of brands said agencies aren’t pushing them to invest in gaming. Additionally, there are perception gaps between buyer and seller perceptions about the cost of advertising in
games, the quality of gaming inventory, the viability of gaming for driving performance, the ease of measuring ROI, and brand safety. Facilitating easier comparisons through measurement and analytics between video games and media channels that are perceived as more mainstream could be one way to bridge these gaps. Brand safety and suitability concerns about video games are major barriers for
adoption since many games are violent. But ad agencies at PlayFronts said concerns about violent content are overblown, especially when that isn’t a concern for other spending avenues. Many advertisers are waiting for in-game advertising to break into console and PC games before they ramp up their investments. However, the idea that premium inventory is only available on consoles and PCs is inherently flawed. The gaming industry is moving increasingly mobile. Activision Blizzard, for example,
has launched mobile titles based on its most popular IP, like Call of Duty and Diablo. When gamers think of what constitutes a premium game, they focus mostly on factors like high-quality graphics, challenging gameplay, the ability to level up and customize a character over time and continuous upgrades and support from the game developer. Marketers, on the other hand, place too much emphasis
on where the game is played. But it’s a false dichotomy to think of mobile gamers and PC and console gamers as separate audiences, because they overlap. About 72% of US gamers play on multiple platforms. In-game advertising can take many forms, including static ads, dynamic ads, and product placements. For example, a soda company could place an ad in a game that features a vending machine,
offering virtual soda to players. The ad could also provide a code that players can use to redeem a discount on the company's real-life products. Similarly, a car company could sponsor a racing game and place its cars in the game for players to drive. While in-game advertising is a newer form of advertising compared to traditional channels like TV and radio, it has been around for quite some
time. For example, the first in-game ad was placed in 1978 in an arcade game called Space Invaders. However, it was not until the early 2000s that in-game advertising began to gain popularity with the rise of online gaming. Today, in-game advertising is a multibillion-dollar industry. According to eMarketer, US ad spend on video games totaled $8.6 billion in 2022, compared to $56.9 billion
on social media, $67.2 billion on video, $33.9 billion on search, and $26.9 billion on display advertising. Despite the slower growth rate, the potential for in-game advertising is vast, with the global gaming industry expected to reach a value of $365 billion by 2025. As the gaming industry continues to grow, more brands and agencies are likely to recognize the potential of in-game advertising. Another factor that could drive the growth of in-game advertising is the rise of virtual reality (VR) and augmented reality (AR). These technologies have the potential to transform the gaming experience, making it more immersive and interactive. In-game advertising could also become more engaging and interactive with the use of VR and AR. For example, a furniture company could create a virtual showroom in a game where players can explore and interact with different
products. Moreover, as the gaming audience continues to diversify, brands will have more opportunities to target specific demographics through in-game advertising. In particular, the rise of female gamers presents a significant opportunity for brands. Women now make up almost half of all gamers, and there is a growing demand for games that cater to their interests. Brands that can tap into
this market through in-game advertising could see significant growth in their customer base. Despite the slower growth rate of in-game advertising compared to other emerging channels, the potential for this marketing strategy is significant. In-game advertising offers a unique opportunity for brands to connect with audiences who spend significant amounts of time playing video games,
especially as the gaming industry continues to grow. Moreover, the rise of virtual and augmented reality could transform in-game advertising, making it more immersive and interactive, while the increasing diversity of the gaming audience presents new opportunities for brands to target specific demographics. One of the biggest challenges facing in-game advertising is the perception gap
between buyers and sellers regarding the cost, quality, and viability of gaming inventory, as well as the ease of measuring ROI and brand safety. Bridging this gap through measurement and analytics could help increase the adoption of in-game advertising, especially as brands become more comfortable with the medium. While many advertisers are waiting for in-game advertising to break into
console and PC games before they ramp up their investments, the idea that premium inventory is only available on consoles and PCs is flawed. The gaming industry is increasingly mobile, with many gamers playing on multiple platforms. Therefore, marketers should focus more on factors like high-quality graphics, challenging gameplay, and the ability to level up and customize a character over time, rather than just where the game is played. In-game advertising has been slower to grow compared to other emerging channels such as social media and CTV. However, video games rank third in how people spend their spare time, with audiences playing for an average of 11.8 hours per week, and the global gaming industry is expected to reach a value of $365 billion by 2025. In-game advertising has a vast potential to target specific demographics and become more engaging and interactive with the
rise of virtual and augmented reality. Bridging the perception gap between buyers and sellers could help increase the adoption of in-game advertising, especially as brands become more comfortable with the medium. Overall, in-game advertising offers a unique opportunity for brands to connect with audiences who spend significant amounts of time playing video games. |
All the news you need today, in a format that isn't TL:DR, summarized for the busy executive.
Microsoft Advertising has announced changes to the way broad match modifier (BMM) keywords are served for search ads, with the algorithm now serving BMM keywords as broad match. Advertisers that have tested the new system have seen improved conversion volume while maintaining the cost per acquisition (CPA).
Broad match is the default keyword match type that makes the ad eligible to serve up when someone queries words related to a chosen keyword, including searches that do not contain the keyword terms, and matches synonyms and other similar keywords. Microsoft Advertising will stop serving ads for specific keyword variations that do not lead to ad clicks. A recent report from Connected Commerce Council shows that small and medium-sized businesses that advertise estimate their businesses have grown
39% due to digital advertising. Uber's advertising division has launched a self-serve ad platform for its cartop advertising model. The move is aimed at giving drivers a way to earn 15% more revenue and enabling small and medium-sized businesses to advertise more affordably. The cities with initial rollouts of Uber’s cartop ads include
Boston, New York, Chicago, Los Angeles, Phoenix, Atlanta and Dallas, with advertisers able to geotarget specific zip codes, hours of day and days of the week. The cartop equipment is offered by invitation-only to highly rated drivers. Uber’s revenue run-rate from advertising in Q4 2022 exceeded $500m. Online fashion retailer Asos has selected
Criteo as its exclusive ad tech partner for endemic brand advertising as it builds out its retail media network, according to a press release. The three-year deal will see Criteo enhance Asos Media Group’s existing offerings, as well as introduce a new intent-based sponsored ad format for search results and product listing pages on the website. The deal covers the US, UK, France and Germany, with expansion into other markets anticipated. Criteo will also assist AMG's ad sales efforts
with brands and agencies. Retail media is predicted to be the fastest-growing marketing channel this year. According to a new white paper from IDC, sponsored by Twilio, C-level executives are now prioritizing customer satisfaction over profits. Of those surveyed, 43% of CEOs now focus most on customer satisfaction, while only 40% put operational
efficiency first. The study explores the use of customer engagement platforms (CEPs) to achieve customer happiness and trust. However, only a minority of companies currently have fully operational CEPs, with 98% working towards establishing one. The study lists marketing tools, communications software, and customer support software as the top investment areas for companies to achieve their desired outcomes, including customer satisfaction, customer acquisition, and improved operational
efficiency. IDC surveyed 1,600 respondents from the United States, the United Kingdom, Germany, France, Japan, Singapore, Australia, Brazil, and Mexico in the summer of 2022. Advertising budgets are being siphoned by piracy streaming sites, according to ad-tech consultancy Jounce, which audited the programmatic supply chain using bidstream data.
The report found that around $50m was spent on ads on piracy sites in 2022. While this is a relatively small amount compared to the $148bn digital display advertising market, it highlights gaps in ad-tech transparency. Brands, including JetBlue, Mint Mobile, Fender, Tampax, Paramount+, and Mack Weldon, served by Google and the DSP RTB House, had ads appear on two of the piracy sites highlighted. Some ad networks may not be doing enough to audit the publishers they work with, the report
found. Sephora and TikTok have announced a joint venture with agency Digitas to launch the Sephora x TikTok Incubator Program. The program will offer select beauty brands, including BIPOC-owned brands from Sephora’s Accelerate program, mentorship from TikTok creators who will teach them how to implement creator-focused social media
strategies to drive growth and engagement. The first batch of brands includes Hyper Skin, Topicals, and Eadem. Beauty-related content consumption on TikTok grew by 1,000% from 2020 to 2021, making #BeautyTok a lucrative space for beauty brands. With this program, Sephora is investing in the creator-focused social media strategies of up-and-coming brands, with the return on investment expected to come from sales driven by creators. Google Analytics 4 (GA4) has introduced a new feature that allows users to build personalized channel groups, either by using Google's default channel group or creating one from scratch. This feature will enable users to modify channel names, optimize criteria, and add or remove them. Google has also released an official course on server-side tagging for GA4, aimed at improving data management,
performance, and privacy. In addition, Google's March core update has been rolled out, which may affect search rankings. However, as long as users follow Google's guidelines, there is nothing to worry about. The custom channel groups in GA4 can help better segment and track website traffic, providing more optimization opportunities and insights. The 2023 Social Media Industry Benchmark Report has been released and provides metrics on posting frequency, post types, hashtags, and more for 14 industries including Alcohol, Fashion, Financial Services, Food & Beverage, Health & Beauty, Higher Education, Home Decor, Influencers, Media, Nonprofits, Retail, Sports Teams, Tech & Software, and Travel. The report analyzed over 5 million posts and 9 billion likes, comments, and favorites on Facebook, Instagram,
Twitter, and TikTok from top brands in every major industry to bring fresh social media benchmark data. The report highlights that engagement rates are on the decline for Instagram for the third year in a row but holding steady for Facebook and Twitter. The median posting frequency on Instagram has increased slightly across all industries while posting frequency has decreased by around 20% on Facebook and Twitter. The report also suggests that TikTok is every industry’s best friend this year,
with a median engagement rate of 5.69%. Rising inflation has had a significant impact on consumer habits and trends over the past two years, with Awin data revealing several insights for affiliate marketing. First, consumers are more conscious of their spending, resulting in decreased conversion rates as the Consumer Prices Index
Including Housing (CPIH) increased. Second, content creators and influencers play a greater role than ever in marketing, with nano and micro-influencers proving more effective due to their highly engaged and trusting followers. Third, sustainability has taken a back seat as consumers prioritize affordability. Fourth, brands are less likely to offer discounts due to increased production costs, but promotions will remain an important staple in any marketer's repertoire. Fifth, affiliate marketing
remains a growth driver, providing a low-risk, pay-on-performance model. Finally, technology partners are driving growth in the affiliate space, enhancing the online consumer experience, and keeping ROI high on a low-risk performance model. The cost-of-living crisis is unlikely to diminish anytime soon, presenting marketers with unprecedented challenges in 2023. Bic is launching a new product called the EasyRinse razor, which it claims is the biggest innovation since the disposable razor was introduced in 1975. The company's research and development team spent five years working on the product, which features a reverse blade design to avoid clogging. The EasyRinse requires 60% less rinsing time and 25% fewer strokes, according to Bic, which has allocated its largest ad spend for the shaving category in a decade to promote the
razor. The ad campaign features comedians Eric André and Annie Murphy shaving in tandem in a 30-second spot scheduled to air on connected TV, online video, and social media. The razor is priced at two for $7 and is aimed at taking a 3.5% market share from market leaders Gillette and Venus. Microsoft Advertising has announced changes to the way
broad match modifier (BMM) keywords are served for search ads. BMM keywords will now be served as broad match rather than phrase match, a move aimed at improving algorithmic performance. The change will roll out gradually and is expected to lead to improved conversion volume for advertisers. Microsoft Advertising's broad match will include synonyms and other similar keywords, and the company will automatically stop serving ads for certain keyword variations that do not lead to clicks.
Self-serve ad platforms from Microsoft and Google have become essential marketing tools, and small and medium-sized businesses estimate their businesses have grown 39% because of digital advertising. Product placement, a $23 billion industry, is increasingly using virtual technology to seamlessly place products in movies and TV shows.
In-content advertising platform Mirriad uses AI to virtually render objects into the content, including cars, billboards, and TVs. Chris Ward, senior vice president of Midwest ad sales at Hallmark Channel, which works with Mirriad, says virtual product placement opens up new opportunities for ads and is a welcome addition to traditional revenue streams. The technology also opens avenues of creativity, such as featuring predictions that come true in future years, says Mirriad CEO Stephan
Beringer. |
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