Last year Microsoft paid $300 million or so for NYC-based Massive and kicked off a wave of hype about the future of in-game advertising: The idea was that marketers could place their messages inside video games and get in front of elusive youngsters who had abandoned TV, radio, etc. The market was perhaps $70 or $80 million, but would grow to $2 billion by 2010, Massive said.
Now MediaPost (pdf) takes a look at the in-game ad growth and finds it stunted. The Yankee Group now predicts a $980 million market by 2011, but even that may be too optimistic. The industry has major hurdles, Mike Shields reports:
• The “billboard” ads that comprise most in-game messages are boring and don’t do much.
• There’s no standard measurement metric for the ads.
• There are few places to put the ads — “dynamic” ads that can change on the fly are more or less limited to PC games, which have a niche audience. They are theoretically available for some Xbox 360 games, and not available at all for Sony and Nintendo platforms.
The good news for marketers who want to reach gamers: They can already do so, with a minimum of hassle, by advertising on low-tech “casual” games, where they’ll reach a very broad audience. MediaPost (pdf)
Related: Massive: In-Game Advertising Works