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The Fast Company Executive Board is a private, fee-based network of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience.

Game on: Advertising reimagined for the gaming world

Ad spending tied to gaming is still relatively small compared to the total spent on digital advertising. However, its growth rate is strong, and its potential is nothing less than staggering.

Game on: Advertising reimagined for the gaming world
[Mkorobsky/Adobe Stock]

Current forecasts about “the future of advertising” invariably assert that advertising will powerfully combine with gaming. The momentum is accelerating for this convergence of advertising and gaming, which a quick sampling from the media landscape illustrates:

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  • Ad Age, which closely monitors advertising industry news, recently announced its expectation that gaming will be “the next huge advertising channel.”
  • Business Insider, often breaking news about the latest business plans and deals, reported that two leading gaming powerhouses, Sony and Microsoft, are making acquisitions and other preparations to smooth the entrance of advertising into the growing gaming universe.
  • Fast Company, scoping out important innovations in marketing, has also shined a spotlight on this development and concluded that “You’re about to see a lot more ads in video games.”

THE FUTURE ARRIVED YESTERDAY

Many have seen this coming. The seismic shift of attention from analog media like traditional TV, print, and radio to digital ads like paid search, display, and social campaigns reached a tipping point around 2019 when, according to various sources such as eMarketer, digital ad spending eclipsed traditional.

Ad spending tied to gaming is still relatively small compared to the total spent on digital advertising. At $6-$8 billion, it represents less than 6% of total digital advertising in the U.S. However, its growth rate is strong, and its potential is nothing less than staggering.

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THE ECONOMICS OF ACTION

Just look at what the early foray into gaming has already produced:

  • In-game advertising: Barack Obama’s election campaigns placed advertising in games, including Guitar Hero III, Madden NFL 09, NBA Live 08, Burnout Paradise, Nascar 09, Need for Speed Carbon, and Madden NFL 13.
  • Product Placement: The online multiplayer mode of Uncharted 3 featured Subway meals and staff uniforms in the game.
  • Cross-Promotions: KitKat repurposed its tagline—”Have a break. Have a KitKat.”—in its “Giving gamers a break” campaign integrated with the soccer action in FIFA 22.
  • Sponsorship: Intel and Red Bull both are major sponsors of esports events.

When Pokémon Go burst onto the scene in 2016, players and pundits alike realized that the gaming medium offered possibilities that were scarcely dreamed of in other advertising scenarios. The game effectively broke the fourth wall of on-screen performance, with engaged players spilling out into the physical world in pursuit of virtual Pokémon creatures.

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For its part, Niantic, the game creator, offered sponsored locations that included game tie-ins designed to draw foot traffic. Whereas advertising rates for other channels might charge for mere exposure or signals of engagement like cost-per-click, Niantic focused much further down the sales funnel with a cost-per-visit metric.

In Japan, McDonald’s was all-in, aiming to drive Pokémon Go gamers to its 3,000 outlets. In the U.S., Starbucks designated 12,000 of its stores official “Pokéstops” or Gyms.

JUST LIKE OTHER ADVERTISING—ONLY MORE SO!

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Still not convinced that gaming is a platform or channel that makes sense for your marketing challenges? Here are four more reasons to consider getting in the game:

  1. Market size: By any measure, the dimensions of this market are impressive—and growing (about 15% per year). There are nearly 3 billion players who reach around the world, which is about one in four people.
  2. Audience engagement: It’s off the charts. By one account, a young gamer in a strong gamer culture will have 10,000 hours playing online by the age of 21. And those hours are characterized by intense concentration often punctured by the exhilaration that comes with an “epic win.”
  3. Potential for innovation: Human creativity has combined with the exponential advances of technology to fuel the rapid evolution of gaming. Gaming will continue to be experienced in more ways by more people and offer more surprising benefits and outcomes.
  4. Portal to the metaverse: Gaming technology is already applying augmented and virtual technology to new worlds and novel experiences. At the same time, the platform on which a game is played can include the presence and personality of an unlimited number of users who carry with them their possessions, capabilities, and spending power. The parallels to the metaverse are striking.

THE FUTURE OF GAMING

It’s tempting to be dismissive of gaming, to consider it a pastime or passion of young males. Of course, this demographic stereotype is inadequate. In the U.S., women account for about 45% of the gamers and almost 30% of U.S. gamers are over 45. Still, others continue to see gaming as a social virus: addictive, escapist, and unproductive.

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But for a unique perspective entirely, consider the vision of game designers like Jane McGonigal or economists like Edward Castronova, who find in games and gaming communities the means to reinvigorate human purpose while building stronger communities that can be enlisted in constructing a better and healthier future.

As the gaming world enlarges, the prospects are compelling: “Over the next generation or two, ever larger numbers of people, hundreds of millions, will become immersed in virtual worlds and online games… [Things] won’t be happening in the same way. You can’t pull millions of person-hours out of a society without creating an atmospheric-level event…I think the twenty-first century will see a social cataclysm larger than that caused by cars, radios, and TV, combined…” (Edward Castronova, Exodus to the Virtual World)

I believe this social cataclysm will provide the proving ground for a similar wave of advertising innovation. Call it a cataclysm; label it disruption; but it will bring opportunity: immersive advertising at an unprecedented scale fully capable of capturing players’ imaginations and constructing new possibilities.

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Blake DeCola is SVP of Client Partnerships at Brado, an insight-to-activation marketing firm. 

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