Advertisers are still circling gaming, without a clear direction

Maybe the metaverse changes things, or maybe that never happens

Earlier this week, the IAB hosted its first annual PlayFronts, a forum for companies to help brands figure out how to crack the increasingly massive - and sprawling - world of gaming.

For those of us who’ve floated around this world for a while, it was hard not to feel a weird sense of deja vu - specifically flashing back to the In Game Ad Forum of 2005, the last time in-game advertising was supposed to explode.

Here’s a lot of what we heard then, and at the PlayFront: Gaming is massive. It’s not just teens in the basement. But gamers are fickle, so brands need to be careful. That likely means inserting ads into the background of games, because rule number one you can’t interrupt gamers. Or you need to build unique gaming experiences for your brand - and then you somehow need to get people to visit them.

Don’t get me wrong, the IAB event was terrific and well-timed. Not only has gaming broadened in scope and exploded even more in importance since the pandemic -but gaming is increasingly seen as this gateway to the metaverse we’re all going to someday soon.

So the urgency for brands to figure this out is very real.

Yet it struck me, for all the talk about how the metaversey future will be decentralized, what this ad market market desperately needs is centralization. Because it really isn’t even a market yet, at least one with any sort of concentrated buying or selling power on either side. As Krishan Bhatia, President & Chief Business Officer at NBCUniversal noted, gaming and streaming are often viewed heading on parallel upward trajectories these days, but with a big difference. Ad money is flowing fast to streaming. As for gaming…

“When we talk to clients,” he said. “It’s a media platform that everyone is of course excited about but no one feels like it’s been solved for at scale.”

So the question is, “how do we bring the scale and premium content potential of gaming alongside that premium TV and streaming space to marketers?”

It’s a great question, and seemingly greater challenge. Because right now ‘gaming’ for brands is eSports sponsorships, it’s mobile video ads, it’s influencer deals, it’s pre-rolls on video platforms, it’s integrations, it’s custom skins, its mobile games and so on.

Yet so much of what was presented at the IAB show felt like was in-game ad networks 2.0. For example, Anzu which NBCU has invested in, showed off digital signage in a sports game - a tactic which has existed for decades. Other presenters showed off how their tech could deliver virtual branded objects into the background of games. At least three companies claimed to be selling ads into Roblox, which by the way, Roblox also does.

Speaking of Roblox, American Eagle touted the fact that over 7 million people had visited a virtual store in Roblox. I’m not trying to knock it, but this sort of program felt much like something you might see a brand pull off in the Simms a dozen years ago - raising the same sort of questions. How do you drive people to this virtual store? Can it scale? Did it have any impact? All seemingly still TBD.

To me, for all the great energy at the event, it was very telling who wasn’t there. For example, Roblox didn’t appear on stage. Nor was anyone from Xbox, or PlayStation or Epic Games (Fortnite).

It says something about how these companies do and don’t value advertising, and how careful they still want to be on that front.

To be sure, it could just be a timing thing. Sam Huber, founder of the in-game firm Admix, admitted that what is available to brands during actual game play right now is very Web 2.0, or “kind of business as usual.”

Whereas in Web 3.0, while it’s very, very early, the thinking is - advertising will look entirely different. According to Huber, “in the metaverse, it’s not really about advertising,” he said. “It’s about advertising in a very different way…brands and content being one together.”

An example is the recent Fashion Week in Decentraland, where Admix helped bring some brands along.

“We’re going to be talking amore about experiences, not ads.”

Conceptually, that sounds intriguing, but far from simple. One eyebrow-raising prediction Huber made was that in the metaverse (or metaverses), targeting, identity, first party data- all the stuff brands and ad tech companies are obsessing over right now - won’t matter at all. Kinda sounds nice. We’ll see.

In the meantime, it’s no wonder that so many brands right now who want to target gaming simply elect to run ads alongside gaming content on YouTube and Twitch.

Because as much as many marketers would probably love to squeeze their way into all that that time people spend playing immersive console and online games, as Nakesha Holley, Media Strategy at Verizon put it - for these players, “Their space is sacred.”

“Don’t come assuming you’re going to give them a bunch of ads and banners, because the don’t want to be interrupted,” Holley said. “They are ready to play their game.”

And what happens if you mess up? “It’ not going to be good for you,” she said.