2024 is the Year of Video Game Ads. Again.
It feels like now or never for the medium that is always coming
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For years, there was a running joke in digital ad circles that 20XX will finally be the year of mobile. This was mostly during the time when marketers has almost no idea what to do with mobile devices, and ended up launching toilet finder apps and the like.
Eventually, social apps happened, and video – and suddenly no one could put down their phones and there was no need for a year of mobile, as it subsumed the rest of the industry.
When it comes to video games, it feels like we’ve been waiting even longer for a similar explosion (Massive Inc anyone?). Meanwhile, consumers have remained miles ahead of advertisers for nearly two decades, despite multiple hype cycles surrounding the promised growth of in-game advertising.
It may finally be happening. Or not. It certainly feels like it’s now or never for brands to crack this massive – but still mostly ad-light medium. If marketers don’t – and they may never - they’ll end up eshewing the preferred form of entertainment for a generation or two of consumers.
I spent some time at the IAB Playfronts Event in New York this week, an impressive, well-attended gathering that seems an attempt to centralize and spark a marketplace, not unlike the first Newfronts back the early 2000s. At this year’s third annual show, you had Yahoo out touting its connection to the Xbox, Samsung talking up it gaming hub on TVs, you had execs from the NFL and Roblox detailing a post Super Bowl activation, etc.
The IAB used the occasion to unveil new research which found, among other things, that 40% of brand respondents said they planned to up spending on gaming in 2024.
What that means in real dollars is harder to pin down. A few weeks ago, eMarketer put out a report predicting that total game ad revenues will hit $8.53 billion in the US this year. Not a terrible number, until you dig in a little bit and realize that 90.7% of that spending is predicted to come from advertising in mobile games.
What’s wrong with ads in mobile games? Nothing of course – except - are banner and video ads in time-killing mobile games what we think of and hope for when we imaging ‘brand finally cracking gaming’? You may disagree, but to me, mobile gaming is much more akin to plain old digital advertising, which is bought programmatically and delivers millions of raw display impressions. Plus, it’s worth nothing that Mobile game ad revenues will only be 2.5% of total digital ad spending in the US in 2024 - so that category is not exactly a juggernaught.
In terms of brands truly getting into gaming – you think of Madden and Fortnite and World of Warcraft and so on. That’s harder to do – and may never be as big as we once hoped.
It was telling that at the Playfront event, you didn’t see big executives from PlayStation or Epic Games or Nintendo making presentations – and as one attendee noted to me, you don’t see a lot of the top media buyers roaming the halls either.
It seems to say a lot about these tech giant’s priorities right now. More than one executive at the show told me stories about how it took multiple years of meetings with developers to get in-game ad partnership off the ground.
“One of the reasons you haven’t seen ads bloom in the gaming space is that it’s still pretty profitable on its own,” said Kelly Metz, Chief Investment Officer, OMD USA on my podcast a few weeks ago. “They haven’t been forced into advertising because the cost of production is so great that they need it as much as other channels”
“The second issue,” Metz added, “is that these are all closed platfroms.” That means they all have different consumer IDs, different ad tech, infrastructure, etc. – which doesn’t make it easy to buy or measure, Metz added. Plus, brand safety is still a real concern. “There is still a lot of risk in that environment that is holding demand back.”
Yet there are signs of real hope. A company called Moonrock gave a presentation at Wednesday’s show centered around a unique partnership between the Milk brand– which is trying to make inroads with teens -and Fortnite.
Jen Grubb, Marketing Manager at the Milk-backing agency MilkPEP, said that the brand launched three exclusive ‘maps’ in Fortnite last year, where players could drink virtual milk and try out various ziplines. Thanks to a big promotional push on Twitch, TikTok, YouTube and others, Grubb said that the Milk Zipline world became a top ten Fortnite game during the week of launch. How many players were reached? She didn’t say. How does that translate to a TV ad during a sporting event, or on a Hulu show – you tell me. But, Grubb did note that teen milk consumption jumped half an ounce per day from 2022 to 2023, which seems no small feat.
Another cool brand integration came from the ice pop brand Bomb Pop, which collaborated with Roblox to sell virtual bombs in the game Restaurant Tycoon 2. According to Alnese Thomas, Sr. Brand Manager at Wells Enterprise (which make Bomb Pops), the activation drove 12 minutes of time spent and 28 minute of game time per user, and 50 million virtual Bomb Pop’s changed hand. Plus, in real life - sales jumped 20%, she said,
These numbers all sound impressive, if not hard to contextualize in a broader media strategy. As Max Bass, Director of Emerging Connections at GALE said, “We’re talking about immersion over impressions,” he said. “It’s a different story we need to tell.”
None of these campaigns seem easy to replicate or execute, in a world where media buyers love easy. That may be coming, thanks to the emergence of cloud gaming. While Google may have flamed out in this endeavor, Nvida is thriving with GeForce, where people can play high intensity PC games without having to have uber powerful gaming computers.
Nvidia announced aa deal with Simulmedia’s PlayerWon at the Playfront which will see brands provide fans a free hour to the paid service (which features 1900 PC games) as long as they watch a video ad. These sorts of offerings should be a reliable video impression generator and easier to plug into a GRP tracking spreadsheet.
“It’s time to think about your TV and gaming strategy as one effort,” urged Justin Fromm, head of insights at Samsung Ads. “Cloud gaming is coming.”
We’ll see what that means in terms of removing friction from the market. In the meantime, “we’re still leaning in,” said Metz, who is hoping Microsoft’s ad plans for Activision Blizzard start taking larger shape. “You’ve gotta test. You’ve gotta learn, You’ve got to force the issue. I think eventually it will take off.”
BTW, in case you missed it, here’ my conversation with RPA’s Lisa Herdman from earlier this week, where we talk about what might be a ‘dangerous’ move for TV advertising.