In 1978, the arcade game "Space Invaders" featured a unique form of in-game advertising. The game's developer, Taito Corporation, struck a deal with the Japanese snack company "Glico," where instead of earning points, players would shoot at descending rows of the company's popular candy bars, leading to increased brand visibility and recognition among players. 

This early example demonstrates the innovative ways in which advertisers have sought to integrate their brands into video games, laying the foundation for modern in-game advertising practices.

Key Points

• Placing adverts within video games or gaming environments is known as in-game advertising, or IGA.
• There are three main types of IGA: static adverts, dynamic adverts and gamevertising.
• Blending branded content into video games brings benefits for both players and brands.

What Is In-Game Advertising (IGA)?

In-game advertising (IGA) refers to placing advertisements within video games or gaming environments.

This type of advertising can take various forms, including static images, videos, branded products integrated into gameplay, and even entire games designed for advertising purposes. IGA aims to promote products, services, or brands to gamers while they are playing.

In the early days of gaming, simple arcade games featured branded logos or products within their gameplay. 

As gaming technology advanced, so did the advertising opportunities. The emergence of online gaming and digital distribution platforms further expanded the scope for advertisers to reach a vast and engaged audience.

Is In-Game Advertising Important For Business?

The gaming industry is a $455 billion community — that is why IGA holds a significant place in marketers' budgets and will in the future, according to Statista.

Gamers are often deeply engaged with the content they are playing, providing advertisers with a captive audience receptive to advertising messages. This engagement facilitates a higher likelihood of message retention and consumer action. 

Additionally, in-game advertising allows for precise targeting based on factors such as demographics, gaming preferences, and behaviour. This targeted approach enables advertisers to tailor their messages effectively, increasing the relevance and impact of their advertisements.

Finally, integrating advertisements seamlessly into the gaming experience enhances brand visibility and recognition among consumers. By embedding ads within the game environment, advertisers can establish a stronger connection with players, fostering brand loyalty and affinity.

What Are The Types of In-Game Advertising?

There are many different kinds of in-game advertising, each having unique traits and strategies for use. Below are the four main types of in-game advertising.

Static Advertising

Static advertising involves the placement of fixed advertisements within game environments. These ads can be billboards, posters, or other static elements integrated into the game's virtual world. 

Examples of static advertising include:

• Virtual billboards displaying real-world brand logos
• Posters featuring promotional images
• In-game retail places showcasing specific products

Static advertisements offer a non-intrusive option to include advertising in the gaming experience. They are often strategically placed in high-traffic areas within the game environment to maximise visibility and impact.

Dynamic Advertising

Dynamic advertising refers to inserting real-time advertisements into the game environment. Unlike static ads, dynamic ads can be updated or changed on the fly based on various factors such as user demographics, location, or time of day. This allows advertisers to deliver targeted messages to players based on their individual characteristics and behaviours. 

Examples of dynamic advertising include:

• Dynamically updated billboards displaying current promotions
• Video ads streamed during loading screens

Dynamic ads offer a more personalised and relevant advertising experience, enhancing engagement and effectiveness.

Gamevertising

Gamevertising is when games are specifically designed for advertising purposes. These games feature branded content or themes and are created with the primary goal of promoting a particular product, service, or brand.

Gamevertising can take various forms, including:

• Browser-based mini-games
• Mobile apps
• Full-fledged downloadable games

Examples of advergames include branded racing games sponsored by automotive companies, puzzle games featuring branded characters or mascots, or cooking games promoting specific food products. 

This type of IGA offers advertisers a highly immersive and interactive way to engage with consumers.

How Are In-Game Ads Served?

There are two main factors that conditionate the ad serving process. These are the type of ads to be served (static vs dynamic) and the environment in which they’ll be displayed (e.g. inside a mobile game or in a PS4 game).

While dynamic advertising needs to be connected to the Internet to alter as players advance through the game, static adverts are usually hardcoded into the game.

Ad Serving

To serve dynamic in-game ads, there’ll likely be an SDK to facilitate the ad-serving process between the game and the user’s device, e.g., a smartphone.

Two primary methods for assessing in-game advertisements are brand-lift studies and the IAB’s OM SDK.

Measurement

Determining whether users have viewed static in-game ads can be challenging since they seamlessly blend into the game environment. As a result, analysing brand lift may be the primary measurement option for brands seeking to gauge ad effectiveness. While this challenge also applies to certain dynamic in-game ads, there may be potential for measurement through the IAB's OM SDK, which can be integrated directly into the game, such as a mobile game.

But just like with many other areas of AdTech, a lot of innovation is happening in this space.

What Are the Benefits of In-Game Advertising For Businesses?

The in-game branch of the advertising industry has massive potential. Admix data indicates that throughout the course of the upcoming year, media buyers will both maintain and raise their in-game advertising budgets. Furthermore, by 2025, 93% of media buyers want to conduct in-game advertising campaigns. 

Blending branded content into video games brings benefits for both players and brands.

Benefits for players

Players enjoy uninterrupted gaming experiences when they see ads seamlessly integrated into the game environment, like on virtual billboards. This is much better than annoying ads that pop up and disrupt the game, like those seen in web advertising.

Benefits for brands

In-game advertising helps brands increase awareness and engagement in a natural way. By showing ads within the game, brands can connect with players without interrupting their gameplay.

A study by TalkTalk, a broadband provider, found that in-game advertising had positive effects:

1. Increased purchase intent — after seeing in-game ads, there was a 12% increase in the likelihood of players buying the advertised products.

2. Longer attention spans — players paid attention to the ads for an average of 29 minutes, which is longer than the attention span for online ads, which is about 17.5 minutes per thousand views.

3. More time spent viewing ads – players spent 13% more time looking at in-game ads compared to the average time spent on online ads.

4. High viewer interest — almost all participants (96%) in the study viewed the in-game ads, and most (84%) felt that the ads fit well within the game environment.