‘Brands follow where people are’: An oral history of the evolution of in-game advertising

Brands and marketers are finally starting to realize the power of in-game advertising.

As the gaming community has expanded in size, so too has the potential for brands to reach gamers directly via their entertainment medium of choice. In accordance with this influx of brand interest, in-game advertising companies have proliferated. Today’s in-game ad firms are building fungible, programmatic in-game ads and immersive experiences that sometimes improve players’ in-game experiences — and sometimes not so much.

In spite of this growth, the industry is still rife with common misconceptions about the relationship between gamers and brands. Going into 2022, stakeholders in the in-game advertising industry are looking to raise awareness about the reach and effectiveness of their services and help non-endemic brands ingrain themselves further into the gaming space. The in-game advertising market is projected to grow by nearly $11 billion over the next three years, according to Technavio’s In-Game Advertising Market by Platform and Geography report. Here’s the story of how the modern in-game advertising industry took shape — and how some industry observers predict the space could evolve in the future.

The early days

In-game advertising has been around for almost as long as the game industry itself. The original in-game ads were hard-coded directly into games, and were usually the result of developers or their hired agents directly wooing skeptical brands to place their products into the game.

Samuel Huber, CEO, Admix, an in-game advertising infrastructure company that serves publishers and advertisers: For a podcast a year ago, we tracked down pioneers in in-game advertising, and I think the oldest I found was in the mid-80s — someone trying to inject brands into a Nintendo game. There was a Pepsi campaign in 1999, I think, where you could collect cans instead of coins. It was just trying to integrate the brands in a native way. So, brands have always tried to reach that audience, but it was very much like, “oh, let’s do a campaign on this game, or a campaign there.’ It was very manual; the game developers had to actively implement all of this stuff, literally designing the cans of Pepsi and putting them in the game. It was more creative work than advertising in any scalable model.

James Draper, CEO, Bidstack, an in-game ad provider that connects developers and brands: The first in-game advertising was back in the ’80s. I think the game Zool was the first one where a product, Chupa Chups, was up there in the background of a platform-based game. This guy was almost like a broker — he would go out to advertising agency groups to try and broker deals, then go to game producers one by one and try to bring brands into the storyline.

Natalia Vasilyeva, vp of marketing, Anzu, an in-game ad firm that recently partnered with Roblox creators to bring ads into the platform: The beginning of it dates back to the ’80s, when we had the first hard-coded ads in games — …read more

Source:: Digiday