As the gaming industry continues to grow across all formats – boosted significantly during the pandemic – advertisers and brands are increasing their focus on “in gaming” advertising as a way to reach and engage with audiences in a virtual setting. This immersive method of advertising presents a host of opportunities for both game developers and brands, but equally poses some unique – but not insurmountable – challenges specific to the format.

The gaming industry

There are a plethora of statistics out there that demonstrate just how popular gaming now is, and how much it forms a part of our everyday lives – we know for example that nearly half the world’s population regularly play games across the three main formats: PC, console, and on mobile. It is almost cliché now to point out that gaming is mainstream – in truth it has been for a long time – but it is the boom in mobile gaming over the past decade that has transformed the landscape.

No longer the exclusive pursuit of stereotypical nerdy, hard-core gaming enthusiasts – casual gaming, in particular on mobile, is very much the norm. Anyone who commutes regularly on public transport will be well used to the sight of a hoard of workers, faces lit by screen-glare, immersing themselves in some virtual quest or other. From an advertising perspective, the gaming audience is now much broader too, with statistics showing that the majority of mobile gamers are female – and while it is particularly popular with the under 24s, there is also growing engagement from older women. The gaming industry saw a huge boom throughout the pandemic, as people sought to while away time during lockdown, investing in consoles in search of both escapism from the bleaker aspects of the real world, as well as some form of indirect human social connection through interactive multiplayer games online.

With such a broad, engaged, immersed audience, it is clear to see why gaming represents such an attractive opportunity for advertisers. In the increasing battle for attention in our “second-screening” culture, why not stop trying to draw eyes away from the virtual world and immerse your advertising within it.

In-gaming advertising

So, we’ve established that gaming is obviously popular, but what does in-gaming advertising mean and what does it look like? It comes in a variety of formats, but here is a rundown of some of the most common:

Display – these are ads which are displayed much in the same way as out-of-home or “OOH” advertising in the real world, but in a virtual context. Imagine navigating a city as your chosen character in a game and walking past a billboard, seeing bill posters on a wall or advertising hoardings around the sporting venue your character is playing in. Developers are able to make these slots available to brands to appear naturally within the game’s landscape. It can offer a realistic feel to the game, whilst also subtly bringing the brand to the gamer’s attention in a natural way.

Videos – in a very similar way to display, these ads are immersed within the landscape of the game but will roll as videos, typically on banners, billboards, TV screens or other mediums within the game.

Pop Ups – whether gamers or not, we are all very familiar with this format in the online world. These ads will pop up as the gamer navigates the game – often when browsing menus or between levels – rather than during gameplay. These tend to appear exclusively on mobile games, typically at the less premium end of the app scale and are a format which is, understandably, less popular with users.

Interstitials – these ads typically appear between levels, or when there are other breaks in game play – e.g. while a game is loading or is paused.

Reward Ads – again something familiar to mobile app users, developers may offer in-game rewards for a user agreeing to be exposed to an ad, e.g. by clicking and watching the ad, the user will be able to gain extra points, coins, lives or other in-game benefits. The formats of these ads may vary (e.g. plain display or video) but have the benefit – in theory at least – of having the user’s engagement.

Audio – these are audio ads familiar from the world of radio and podcasts which can be overlaid into games, whether simply as a standalone – out of context to the gameplay – or contextually immersed within the game, e.g. appearing on a radio with the game world. This format can be popular with gamers as they may be less intrusive, and can be consumed without interrupting the flow of gameplay.

With the rise of never-ending, immersive “metaverses” and with people spending more and more time inhabiting a virtual world, it makes sense for advertisers to occupy this space, using all the above formats, in very much the same way as they would in the real world.

This in-game ad inventory can be sold by publishers dynamically in the same way as it would be online (i.e. on websites or mobile pages), as part of a programmatic bidding process whether through private marketplaces, programmatic guaranteed, or direct in order for developers to have closer control or exclusivity over the brands they work with.

Developer integrity

One of the key challenges facing in-gaming advertising is the protection of developer integrity. Developers naturally wield significant power within the industry and will view their games as artwork. The carefully constructed virtual world and its authenticity and believability could be destroyed by the wrong in-game advertising. Equally, a gamer’s experience may be ruined by excessive or intrusive advertising which gets in the way of the gameplay itself or puts the user off altogether. The balance then is a delicate one, but if done right, it offers both a healthy ad revenue stream for the developer, as well as a natural immersive brand interaction for the advertiser.

Brand safety

On the other side of the fence, one of the key concerns for the advertiser with this type of advertising is brand safety. Many games centre around, or involve, a significant amount of violence and brands will be understandably cautious about associating themselves with that type of imagery. However, this is perhaps something that should be looked at twice – violence is not necessarily toxic for brands. Think of extreme violence in other areas such as TV or film, where the popularity of the show or franchise outweighs the negative connotations that association with violence may bring – brands have certainly not been put off, for example, by the twisted violence of Squid Game, the brutality of Peaky Blinders’ Shelby family or James Bond’s ever-growing kill count.

Similarly, although the creation of the game itself may be under the control of the developer, the actual gameplay – i.e. what the characters do and how they interact with that world once the gamer starts playing, is inherently at the hands of the gamer and therefore uncontrollable, with the potential for dangerous brand associations created by user generated content. Uncertainty is not the advertiser’s friend.

There are several ways around this, with advertisers – or more likely their intermediaries, such as SSPs – using a host of automated determination, as well as human assessment – to profile games and ascertain whether they may be suitable for a particular brand to associate with – using metrics such as the developer’s assessment, industry age ratings, user demographics and download figures –  in addition to human testing. While contractual guiderails can be put in place to ensure the parties are bound to follow particular guidelines with the aim of ensuring brand safety – there will always be some element of risk for the advertiser, which simply represents a cost of accessing the opportunity gaming presents.

Metrics

As ever with online advertising tracking and metrics are given significant importance both from publishers and advertisers. In this context, in-game adverts are often not intended to be “clicked on” or directly interacted with (much like a billboard in real life) and are more for the purposes of brand or campaign awareness. With that in mind, traditional metrics such as click-through or conversions will not be possible, but measuring impressions certainly will be. This will be coupled with traditional measurements for the effectiveness of brand awareness campaigns to build an overall picture of the impact and reach of a brand’s advertising.

Viewability of an ad will be a key concern in this regard, with all manner of data from the duration of time the ad is on-screen, to the angle of viewing, being crunched by various intermediaries to assess whether the advertiser is getting their money’s worth.

Contracting

As eluded to above, many of the issues inherent to in-game advertising can be addressed or mitigated to some extent through practical, realistic and intelligent contracting between the parties involved, be that the game developers, publishers, SSPs, agencies or advertisers. The contract can offer a way forward for the parties to work together to accurately apportion risk and ensure that the advertising delivers value for both developer and brand, capitalising on an engaged, immersed ever-growing audience.

Bristows is uniquely positioned to help in this area. We have extensive experience in all aspects of the gaming and IE industry, from early development and licensing to managing landmark litigation. We also have a renowned adtech practice and have advised publishers, advertisers and intermediaries alike on programmatic advertising contracting across the supply chain. With this convergence of experience in these two fields, we are well placed to assist, so if you have any queries or would just like to discuss any of the above issues further, please do not hesitate to get in touch.