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The test uses audio encoders to identify when and for how long players are exposed to product placements within the game.

Nielsen also conducted pre- and post-test surveys to understand the perceptions of in-game advertising, as well as the impact on brand awareness.

Of the 500 male gamers aged 13-to-34 involved in the 'Tony Hawk's Underground 2' research, most perceived in-game advertising positively with two-thirds believing it made the game more realistic.

Nearly one in three gamers noted that advertising in videogames was more noticeable than traditional television advertising.

Other findings revealed brands that gamers actively interact with have an impact on consumer awareness and recall, with 87% remembering the highly integrated more frequently than the less integrated brands.

Highly integrated ads also tend to enhance a gamer's interest in purchasing the advertised product, with 40% admitting it made them more inclined to buy the advertised product.

Robert Kotick, chairman and chief executive officer of Activision, said: "Companies are beginning to recognise the tremendous potential of in-game advertising. Our partnership with Nielsen Entertainment is aimed at taking video games to a new level as a mainstream advertising."

Michael Dowling, general manager of Nielsen Interactive Entertainment, said: "The industry is starting to benefit from a philosophical shift -- marketers are more willing to experiment with new ways to reach consumers that go beyond the traditional methods."

The latest research comes as personal video recorders, which allow audiences to pause and record live television and skip commercial, forces advertisers to look for new mediums.

Starcom Motive forecasts that by 2010, there will be a total of 7m PVR-enabled boxes.

In-game advertising could be one way forward for many brands wanting to target a niche market of gamers.

McDonald's has already partnered with Electronic Arts as a launch partner for The Sims Online, incorporating in-game product placement.

Activision and The Chrysler Group have also just announced the Chrysler brand will feature heavily in the simulation game, The Movies, from award-winning designer Peter Molyneux's Lionhead studios to be released in 2005.

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