Game developers are angling to become the next big media owners — and brands are taking notice | International Association of Digital Marketing Professionals (IADMP)

By Alexander Lee

Here’s the latest sign that the gaming market is going through unprecedented change: games publishers are developing their own advertising businesses.

In fact, it won’t be long before Upfront-style events fronted by those businesses are a staple of the industry, said Paul Mascali, head of esports and gaming at PepsiCo. And he may have a point. More than most marketers, Mascali has had a front-row seat to why ad dollars are becoming ever-more-alluring to game developers.

“In previous years, there was some apprehension around in-game advertising; as a gamer, if I go out and purchase a $60 game, and then I end up getting served pre-roll, mid-roll or intrusive ad experiences, I will probably not be very happy,” said Mascali during Digiday’s Gaming Advertising Forum on April 20. “So publishers have been really protective of that.”

Times change, however. These days, publishers, like many other media owners, don’t want to be reliant on a singular income stream. Not if they want to create games that are regularly enjoyed by hundreds of millions of people, across devices at lower entry price points. And there are few better ways to offset the capital risk of development and the ballooning costs of user acquisition than advertising.

Yes, it may sound strange, but it’s not necessarily a surprise. Diverse business models and tiered price points are one of the main reasons the gaming industry has swelled into a far bigger economic juggernaut than Hollywood and the music industry. Advertising is just another recurrent revenue stream to game publishers — one that means they’re not having to constantly be reliant on asking gamers to spend a bit more money on their brands.

Not that any of this is necessarily new. For years, games developers have dabbled in in-game advertising, but it was always the exception, not the rule. In part, because the demand just wasn’t there from advertisers for games developers to believe advertising was worthwhile. Sure, there were marketers queuing up to get their brands in the latest versions of FIFA and Madden, but the interest in the sector wasn’t as widespread as it is now — especially once it became clear that gamers weren’t as averse to being advertised to while playing or watching games as previously thought.

“Creating a three-hour brand experience, where people are leaned in and completely engaged — that’s totally different than a 15-second TV commercial,” said Stephanie Perdue, vp of brand marketing at Chipotle, during her talk at the Gaming Advertising Forum. That paved the way for a nascent but fast-growing investment in gaming that included immersive in-game experiences, she continued, such as a massively popular Roblox experience, in addition to more targeted partnerships with streamers and influencers like Karl Jacobs.

“Once you think of it as a media channel, a way to create bespoke, unique content, I think you can go even further with unique brand experiences, depending on what the platform is,” said Perdue.

Going further isn’t straightforward. Games are unlike any other medium marketers advertise in. Measurement …read more

Source:: Digiday