Epstein clarified a basic misconception we’d had about in-game ads: they don’t actually have to be inserted into the games themselves. In-game ads are usually depicted as billboards that gamers see as their character moves by. That seems like a limited market, since it’s hard to stick a McDonald’s ad in, say, a medieval setting. But Epstein points out that advertisers can also take traditional TV-style ads and run them just as they would on television by inserting them at the beginning of games, or in between levels — which means you can run ads in any game you’d like. (And because in this model, the games themselves are free, the ads may not be infuriating to players.) More after jump:
You can see for yourself: McDonalds is now sponsoring three games from UbiSoft at News Corp.’s FilePlanet site: Far Cry, Prince of Persia: Sands Of Time and Rayman Raving Rabbids. Far Cry and Prince Of Persia in particular are popular, high-quality games, so sitting through ads in exchange for free games seems like a worthwhile trade. And you will indeed have to see the ads, as they’re not skippable — another vote in favour of the concept, from an advertiser’s perspective.
What’s that worth for an advertiser? Epstein won’t talk about McDonalds’ deal, but says it’s reasonable to expect a CPM between $10 and $20. Even so, we still think it’s unlikely that in-game ads will become a significant business in the near future: Epstein says he’s comfortable with projections from Parks Associates that peg dynamic in-game ads at a modest $675 million by 2012.
Epstein, president and CEO of the in-game ad agency, also clarified how a new piece of technology would make it easier for advertisers and developers to insert ads into games. This sounds promising but not revelatory.