IN-GAME ADVERTISING – COST AND PRICING
MARKET OVERVIEW
The gaming industry is worth billions. There are 2.81 billion gamers worldwide in 2021 (statista.com), and the industry generates 78.5 billion dollars (Clement 2021). Over a three-month period, gamers worldwide spent an average of over 123 US dollars on gaming in 2018. This included full game purchases, downloads and support for live streamers. The number of gamers worldwide is estimated to grow at an average of 9.3 percent, reaching 3 billion gamers in 2023.
The entire gaming market is expected to be worth over 200 billion US dollars by 2023 (statista.com). Smartphone gaming generated 77.2 billion US dollars in global revenue in 2020 and is estimated to reach 102.8 billion US dollars in 2023 (Clement 2021). The revenue for digital games and interactive media revenue worldwide in 2018 was 115 billion US dollars and 124.8 billion US dollars in 2020.
IN-GAME ADVERTISING
Mobile game creative advertising campaigns will help to achieve business goals quickly and easily (Media Ant 2020). Whether it is via in app promotion, display marketing or rewardable ads, advertisers can get data from collected information such as location, browsing preferences and communication records.
An advertiser’s relationship (Barnett 2014), with the gaming audience is strengthened if the brand becomes an enabler (Howard 2021). Helping a player to earn more lives, or to acquire additional equipment or ammunition in order to reach a higher level. Alternatively (Barnett 2014), a gamer might be asked to watch a free video to gain more credits that can be used to buy in game goods.
DYNAMIC IN-GAME ADVERTISING
This method of in-game advertising usually takes the form of billboards, posters, short videos, or banners integrated into the gaming environment or gaming app (Howard 2020). This allows for targeting methods such as geo-targeting, targeted specific genres and day parting. This also allows for the implementation of new ads within the game. For this type of advertising, what is used is a CPM pricing model – Cost Per Thousand Impressions. The CPM for in-game advertising should fall between the range of USD 4.00 to 12.00. Platforms usually include Consoles (Xbox 360 & PS3), Mobile (iOS & Android) and Flash games.
Benefits of this kind of in-game advertising is that:
1. Geo targeting is possible by continent, country, region and city
2. Ads can be inserted and removed from games in Real-Time. This is what makes time sensitive campaigns possible.
3. The implementation time is extremely fast, taking up to 24 to 48 hours once paper work is signed and banners/creatives are sent over.
4. The price model (CPM) is easy and simple.
Factors that affect dynamic in-game advertising include:
1. This method of in-game advertising does not allow much customization and engagement.
2. Dynamic in-game advertising will require for gamers to constantly have an active internet connection in order for ads to be displayed
STATIC IN-GAME ADVERTISING
Static in-game advertising is the type that involves directly programming advertisements within the game. The pricing model for this will almost always be on a flat-fee basis. For medium to large scale console games, it could lie in the range of $50k all the way up to $500k. This depends on the level of integration and expected audience-size/success of the video game containing the integration. This advertising method is ingrained directly into the game. It can be compared to product placement in movies or television. Once the static in game advertising is put into a game, it stays there forever. The benefits of this type of in-game advertising include:
1. This does not require for the players to have a constant internet connection since the advertisements are programmed directly into the game.
2. Some advertisers prefer the flat-rate price model over the CPM model.
Factors that affect static in-game advertising include:
1. Several months (or years) are taken to prepare static in-game ads. This is because the process takes place in the developmental stages of the game. Advertisers find it hard to plan for a promotion this far in advance.
2. Product placements cannot easily be tracked as there are either limited or no capabilities.
ADVERGAMING
Advergaming is an advertising technique based on advertising brands through video games with the aim of generating notoriety and improving engagement (Alcoverro 2020). For fully functional console games (Howard 2020), the prices spike up to hundreds of thousands of dollars, or more. For mobile games, prices fall within the range of $15k-$100k. This is when a game is created solely by a brand to advertise a product. Advergaming should not be confused with the ads that are inserted inside a video game. Ads that you see when playing a game are banners or display advertising. In advergaming, the presence of the brand is not secondary, but constitutes the core of the game.
1. It offers a non-intrusive way to connect with the public. The customers themselves download, address and interact with the game voluntarily.
2. Advergaming is easy to customize. By designing a video game from scratch (or adapting an existing format), the brand can include its style and values to create a unique and representative product.
3. There is a high chance of going viral. With a social component, these games are very addictive.
4. It is easily measurable. User interactions and impressions are recorded within the game for example: The time they spend playing, the number of times they log in or the screen they leave.
Factors affecting advergaming include:
1. It requires a lengthy preparation time.
2. This will typically be the most expensive in-game advertising option.
References:
BARNETT, M., 2014. In-game advertising: Mind games. [online]. MARKETING WEEK. [10/03/2021]. Available from: https://www.rapidfire.com/blog/in-game-advertising-pricing-and-costs/
CLEMENT, J., 2021. Leading payments methods used by global gamers 2018. [online]. STATISTA. [11/03/2021]. Available from:https://www.statista.com/statistics/536433/mobile-games-revenue-worldwide/
CLEMENT J., 2021. Number of video gamers worldwide 2015-2023. [online]. STATISTA. [11/03/2021]. Available from: https://www.statista.com/statistics/748044/number-video-gamers-world/
HOWARD, L, J., 2020. In-Game Advertising Pricing and Costs. [online]. RAPID FIRE. [11/03/2021]. Available from: https://www.rapidfire.com/blog/in-game-advertising-pricing-and-costs/
©Keren Obara Mar 2021