Will In-Game Advertising Explode in 2022?

Product placement in films and TV has been around for decades. But video games don't always get included in the same conversations.

This seems like a missed opportunity for marketers. The gaming industry is huge, with around 2.5 billion people across the world playing some form of video game. The worldwide gaming market is set to reach $260 billion in the next few years — that's an awful lot of time and attention spent by consumers across the world.

So if you're a marketer and you've never considered advertising in games, you're missing out. Even if your brand isn't tech-related at all.

The wide world of IGA (in-game advertising) consists of virtual billboards to entire branded digital experiences. So below, we'll take a look at how in-game advertising actually works, and what you need to know if you're thinking of running in-game campaigns for your own brand.

The Rich History of Gaming and Advertising

The convergence of gaming and advertising is not particularly new.

Back in 1993, Cool Spot was released for the Sega Mega Drive. In it, you played as a personification of the red dot from the 7UP logo. Games have had a long history of film tie-ins, too — from the infamous E.T. to the mega-popular Lego Star Wars games.

Alan Wake, the 2010 cult horror hit, followed an author's descent into madness in a small Pacific Northwest town. When darkness falls, monsters come out to get Mr. Wake, but he defends himself with the beam of a flashlight — powered, quite clearly, by Energizer batteries.

Source: Alan Wake II

While it wasn't the first game to feature in-game ads (that honor goes to 1978's text-based microcomputer release, Adventureland, it did spark fierce conversation about what constitutes an appropriate in-game ad. Since then, we've seen the in-game ad landscape mature into a widely-accepted and highly effective form of brand-building.

Now, you're just as likely to see a Mercedes billboard in a racing game as you are a Marvel character in Fortnite. While gamers do have limits to what they'll deem appropriate, most now accept ads as a natural part of many gaming experiences.

If you're a marketer, the enormous variety of game worlds and genres means there's plenty of opportunities to find appropriate placements for your ads.

The State of In-Game Advertising in 2022

The games industry itself shows no sign of slowing down.

In mid-2022, amidst economic fears and increasing talk of a recession, VC firm Andreessen Horowitz chose the path of optimism by announcing a $600m fund for gaming. Its announcement stated that "Games Fund One is founded on the belief that games will play a pivotal role in defining how we socialise, play, and work over the next century."

This comes a few months after games publisher Activision Blizzard — of World of Warcraft & Call of Duty fame — was acquired by Microsoft for an eye-watering $68.7 billion.

As for the in-game advertising market, the industry itself isn't widely tracked, so you have to look at individual firms to get a grasp of its scale. Unity, the software engine that many modern games are made with, brought in $184 million in Q1 2022 from its Operate platform — which helps developers serve ads within their games. This is a 26% year-on-year increase.

We're likely to see much more metaverse branding as that sector matures, too. While it's certainly uncharted territory, this part of game advertising is gaining pace rapidly. WPP, the world's largest ad agency, recently partnered with Epic Games to help their agencies deliver a new era of digital experiences for brands in the metaverse.

The “metaverse” is essentially a type of virtual experience focused on immersive worlds. With infinite virtual real estate to be created, there are plenty of opportunities for advertising — but, with so many options out there, earning people's attention might not be the easiest task.

How Does In-Game Advertising Work?

There's a surprising amount of different ways that ads can work in games. Some of the ways you can advertise to customers while they play games are in the following ad formats:

• Product placement: Just like in movies and TV, product placement can make for a natural ad slot within a familiar environment. It might not work in fantasy games for example, but it's not a stretch to imagine Sonic the Hedgehog wearing a pair of Air Jordans.

• Banner ads: These are most common in free-to-play mobile games. They overlap a portion of the screen during gameplay.

• Interstitial ads: These take over the screen when the game is paused between levels, usually for a set amount of time before allowing the player to continue.

• Rewarding ads: Ads that reward the player with in-game items or currency for watching or interacting with them.

• Dynamic ads: Actual banners and billboards in virtual environments that can be updated and changed at any time. Great for racing and sports games.

• Brand partnerships: Any form of sponsored content within a game that creates new gameplay opportunities.

That last one is one of the more interesting and relevant examples for modern brands — even ones that don't have an immediate connection with gaming. Let's look at one of the current masters of virtual brand partnerships: Rocket League.

Rocket League: Helping Brands Score More Goals

Rocket League is a competitive e-sport soccer game in which you control a flying RC car. It's been played by tens of millions of gamers across consoles and PC over the last five years — and is owned by Epic Games, the makers of billion-dollar sensation Fortnite.

Rocket League is frequently updated with brand tie-ins that are much more substantial than mere ads.

During the Superbowl week, the game partnered with the NFL to run a limited-time “gridiron” game mode. Instead of using your rocket cars to kick a ball into the net, you'd carry it and throw quarterback-style passes to your teammates chasing a touchdown. You could also decorate your cars to show your support for whichever NFL team you followed.

Take a look at their partnership with Dacia, the car manufacturer.

Promoting its new range of “Spring” electric vehicles, Dacia appeared in Rocket League with a sponsored tournament and the Dacia Spring Electric Challenge Map, an entire gameplay arena 100x larger than any previously available ones. It was free for gamers to play and was created in partnership with the game's community. The arena was designed to give gamers a tour around an electric-powered virtual town and play with electric-themed vehicles — highlighting the values of Dacia's own Spring car and brand.

This partnership didn't just get exposure to those that played the arena. It was also visible to the viewers of participating streamers, including one with 1.4 million followers. (Streamers are a key entry point into the gaming community, and the streaming world is a very brand partnership-friendly environment).

What Rocket League is doing should give you an idea of the depth of what 'game advertising' really is; the scope of it is really only limited by your imagination.

What to Know Before Considering In-Game Advertising

1. Proper segmentation is crucial.

In-game ads reward specificity, so you need to get specific with who you're advertising to.

In an article for , Malcolm Poynton notes that explaining ad opportunities in gaming is like "describing the world, only with fewer people". Essentially, the world of gaming is so huge — you can't just decide to run some game ads and hope it works.

You still have to understand your audience segmentation, where they are in the brand awareness funnel, where they hang out, how they consume information, and what KPIs you want to measure from your campaign activities.

“Gamer” is an identity, yes, but it's about as vague as “mom” or “professional”. It's a start, but it's nowhere near specific enough to claim as your target demographic. Gamers these days can be 5 years old or 85, of any gender, ethnicity, ability, or preference.

2. Choose your partners carefully.

It's unlikely that you'll be able to make games or interactive assets yourself. You'll need to partner with a game advertising agency or syndication network — which should be able to liaise with game publishers to find you the best opportunities and execute them.

Companies like Bidstack and Anzu run platforms that deliver in-game advertising without disrupting the playing experience. In virtual worlds, dynamic ads are fairly simple in nature and can be customized depending on the player's profile.

You might also find there's a specific gaming brand that you'd love to work with. Why not reach out directly to their publisher and explore how you might forge a partnership?

3. Get creative if you want to stand out.

There's no reason that the traditional style of display advertising won't be a great match for your brand. Dynamic ad networks are growing in popularity, and you could always try some smaller campaigns with those if you want to dip your toes into the game advertising world.

But there's opportunity for so much more. You could create a virtual world of your own or make your brand mascot a playable character in a game. You could launch virtual versions of your own products or sponsor an item that gives players an advantage in a competitive arena.

However, you have to be sensitive about it (don't force your brand into somewhere it won't be appreciated) and data-driven. But if you get it right, you could make a huge splash with a gaming collaboration.

Final Thoughts

These options and more are something you'll want to explore with partners, as we mentioned above, but interactive, in-game digital campaigns could be an inspiring way for consumers to forge a connection with your brand.

Remember that, whatever you can imagine — in the virtual world, it can be built. So if in-game advertising sounds like something your brand would like to try, do your research, keep our tips in mind, and give it a go. It could be what launches your brand to new heights!