Sitting in Manchester airport waiting for my flight home I decided that I'd have a look at some of the magazines that were available. Now I obviously avoided the ones that I don't understand and came across this article by James Forsyth who writes for "The Business" magazine. This article highlights another level of marketing which goes beyond viral marketing.
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The battle to find the next big thing in online advertising revenue is heating up. Google has established itself as the leader in text-based advertising and now it wants to do the same with other forms of online advertising.
Its competitors, meanwhile, are desperate not to be beaten to the punch again. In June, Google pulled in 76% of all search spending - despite accounting for only 60% of searches.
The extent of Google's dominance in evidenced by its ad revenues being seven times largers than Microsoft's, despite the Redmond giant increasing online ad revenues by a third in the last quarter, to more than $500m (£247m, €365m).
But text based search adveritising in not the future. Indeed Google's failure to meet second-quarter earning expectations recently was largely because it has hired a slew of staff tasked with finding new revenue streams.
One particularly promising field is in-game advertising. Both Microsoft and Google have purchased specialist companies: the former splashed out $200m for Massive in 2006, while the latter spent a reported $23m for the smaller Adscape in March.
Studies show that 80% of computer gamers notice ads when playing, a much higher awareness than for television adverts. They cannot be skipped - as TV ads can - because they are built into the fabric of the game. And they target the notoriously difficult to reach, but free-spending, 18 to 34 year old demographic, which increasinly prefers playing games to watching TV.
In-game advertising was worth $50m as recently at 2005, but analysts predict it will reach $600m by the end of the games and $1bn shortly after that.
The best kind of games to advertise in are sports ones. Because of the commercialised nature of sport in the real world, they sit naturally within games and can even add to the realsism (for example, adverts on the hoardings around football pitches or a sponsor's logo on a shirt). Theyre is also no danger of gamers revolting over adverts because incongrous and intrusive - as happned when ads were palced in two battlefield-set 'shoot-em up' games.
So the competition to place ads in five of the most popular sports games developed by Electronic Arts, the US gaming giant that uses the logo "it's in the game", was particularly fierce. In a deal announced last week, Microsoft pipped Google to the post. Financial terms were not disclosed, but the agreement will see Microsoft feed ads into games desgined for its X-Box console and for PCs when users are playing while connected to the internet.
The dynamic nature of these in-game spots allow advertisers to tailor campaigns. For instance, gamers in Los Angeles could see billboards promoting David Beckham's appearances for LA Galaxy whislt those in New York might see ads for local shops. Equally, a British player might see a Carlsberg logo on the pitch and a South African user would be present with a Castle Lager logo. The spots could also tie in with campaigns running in traditional media or run during a specific period of time, such as Christmas.
Microsoft's determination to steal a march on Google proves just how competitive this market is going to be. With the number of people playing games online set to rocket in the coming years, in-game ads will be an increasingly attractive and important channel for advertisers.
For this reason, Google is unlikely to allow itself to get left behind and will no doubt make its own splash in the near future. But long gone are the days when its rivals wil allow Google the time and space to build up the sort of dominance it currently enjoys in text based search
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Well done James - fantastic article.!
Can you imagine that? You're playing a game and you are being advertised to and they are not just adverts - they are RELEVANT adverts. I've no doubt that something like this will soon be taking into account browsing patterns or perhaps if the game-player were to beat a top score then they get an online discount on a X-Box game.
How about all the financial institutions that sponsor sporting events - Santander now sponsor the McClaren F1 team, RBS sponsor the cricket, golf and rugby, Barclays sponsor the football. What opportunities are now open to them to get their brand in people's faces.