Opinion: In-Game Advertising's Big New Play

[Instead of shoving messages down the gaming world's throat, EA's new ad guy Dave Madden wants to give away free stuff, including console DLC games, sponsored by brands. Will consumers get the message? Gamasutra business editor Colin Campbell investigates.] In-game advertising. My, doesn't it just blow? It's the unfunny photo-bomb, the inappropriate clanger, the unwanted guest. It tries so darned hard to worm its way into your affections, you just want to take it outside the back door to the concrete yard, and kick it repeatedly, savagely, until it just curls up and begs to die. OK, yes, I have my opinions on this subject. So does Dave Madden, although his opinions are of a milder hue. He's the new head-honcho at EA's grandly named Global Marketing Solutions Group. To say that his job is to sell ads and stick them into games would be both entirely accurate and grossly unfair. Sure, EA wants to sell advertising, but Madden understands that the 2005 concept of shoe-horning some miserable retailer's logo into a mall-shoot-out scene, again and again and again, is not the way forward. In fact, Madden's vision sounds a lot like good sense. I'll illustrate his ideas with a story. Last month I bought the excellent MLB At Bat for iPad. Alas, I am not a subscriber to MLB's TV streaming service (MLBTV) so I was unable to access this 'extra' part of the package. But the good people at BMW decided to give MLB a bunch of cash so I could watch a month's worth of baseball games, for free. Now, I count this as a favor and it makes me feel good about BMW. I have also been exposed to some propaganda about their products which I otherwise would have avoided. Bravo BMW. Who says the Germans are no fun? Take this model to, say, Xbox Live. A piece of DLC sits there waiting for your purchase. You can buy it. Or you can watch some ads and play a version with some branding built in, for FREE. So at this point, I am apologetically picking up our old pal "in-game advertising" and dusting my shoe marks off its raincoat. I'm inviting it back into the kitchen for a glass of lemonade. It might not be such a bad chap after all. Here's the nub. If you give the people something for nothing that they would otherwise have paid for, everybody's happy. Madden says, "This is the right place where brands can get involved and still have the user be in an opt-in situation. Where they can choose to get additional content courtesy of brands. I would like to posit [free DLC] as a legitimate opportunity for game publishers and advertisers to really have a great experience for users." He believes that offering consumers value and choice is the smart way to persuade them to tolerate brand marketing within games. "Without a doubt the best way is to put the user in control to decide whether or not they want to engage with the advertiser. And if they don't, then the gameplay experience is exactly what it would have been without the advertiser. But the ability to earn virtual goods is up to the consumer. There is a big difference between that and forcing a situation on a user, which can have the wrong impact." This isn't to say that non-optional advertising is set to disappear from our games screens. Sports games in-stadia marketing is here to stay, and it may well be that this "enhances the experience" as Madden says. But a media company of EA's scale cannot afford to turn its nose up at the potential of advertising. Think about the $100 billion being spent on TV and online advertising. These ads are targeting the same people who are spending more and more of their time on mobile devices or on social networks playing games. Madden says that in-game advertising, to date, has been "a niche business" adding that "when you take it out to these gigantic social, mobile audiences, that's where brands are going to want to interact and build business". In the social and mobile space, free-to-play is the norm. Upgradeable experiences are the model. So the opportunity for brands to subsidize those experience is much larger than in the traditional console space. "If you give the user the opportunity to earn the same goods for items that they were going to pay money for via an ad engagement or an ad view, 99.5 percent of the time they are going so say, 'sure, I'll take that deal,'" says Madden. At his previous employer, WildTangent, advertising went from single-digit share of revenues to over 50 percent, as the company moved from selling its goods, to an ad-subsidized model. What's the ambition here? Nothing less than the models we see in other media businesses. "If you look at any major media type - TV radio, print - you'll see that advertising can be in significant double digits [share of income]. If you watch ESPN, your cable provider is charging you $4 a month to watch that. But ESPN is still making 30 percent of its revenue from advertisers." "There is always a healthy mix even in mature platforms and gaming is moving so quickly to digital and free-to-play with transactions, that the system exists for that value exchange to become meaningful, significant revenue." Advertisers are torn between two problems here. They want to engage with people playing mobile and social games because they understand that is where the action is right now. Advertisers follow the crowd. But creating a campaign around a game is complicated. And it's difficult to find the right metrics to compare against the tried and trusted TV ad campaign. Madden says his main role is to make life simpler for the Don Drapers of this world. "My goal is to make it easier to buy and implement and measure. The thing that advertisers really care about is efficiency. They manage enormous budgets with small teams of people. They don't want to get too deep into the weeds of every little detail. They want to find some trusted partners, get good results, repeat and grow. So they want systems that offer results that they can compare with an ad on, say, Yahoo. They need to be able to see that it works so they can accelerate and grow." In its simplest terms, the advertiser isn't weaving its narrative through a game, it is merely sponsoring a piece of content that a person downloads. It is adding its message to the content, just as it's always done with soap operas. But do we really believe that watching an ad will be the end of the consumer's relationship with the brand, as he or she interacts with the experience? Surely, there'll be some weaving going on, and this is where life becomes complicated. Putting games and ads together in a way that isn't a huge turn-off can only be done through creative thinking and lots of interaction between the ad team and the developers. (Madden says the worse thing advertisers can do is attempt to create their own content, the kind of dreary marketing ghettos that plague Facebook, Second Life etc.) Whatever systems he puts into place, it's never going to be as simple as booking a network TV campaign, nor should it be, since TV ads are horrible things that we seek to avoid, while games - with or without ads - need to be something we embrace. The old model of advertising worked because people put way less value on their own time than we do today. In order to let a brand into my life, I expect something in return. This trade is the foundation of Madden's approach. Advertising cannot be viewed as something consumers are forced to tolerate, but something we opt into, according to our own perceived benefit. The danger comes, of course, when the advertising option seems to penalize other options, when the guy who watches the ads gets a bigger gun instead of something neutral, like a more snazzy jacket or a pair of fabby sunglasses. Marketers coming to gaming - social or hardcore - without understanding the potential pitfalls of pushing too hard, will likely come to grief. [As well as being business editor for Gamasutra, Colin Campbell works for a marketing agency. You can follow him on Twitter at @brandnarrative.]