Ten years ago, the word 'gamer' conjured up the image of a teenage boy barricaded in his bedroom, living in a fantasy world inhabited by blue hedgehogs and moustached Italians. Fast forward to 2006 and it's a completely different picture. The average gamer in the UK is 28 years old and gaming is increasingly viewed as a group activity.
Recent research from the BBC revealed that 59 per cent of six- to 65-year-olds in the UK are gamers, equating to 26.5 million people. Gamers were defined as those people who had played a game on a console, PC, handheld device or via interactive TV in the last six months.
The survey found that, at the younger end of the market, gender had little bearing on whether a child played games, suggesting that in future it could prove as effective a medium for reaching females as it currently does males. All of the six- to 10-year-olds interviewed were gamers; 95 per cent of whom played several times a week and 61 per cent every day.
Additionally, the 'grey' market is also growing.
Mainstream medium
These statistics prove that, while gaming has not quite shaken off the 'geek' stigma, it is a mainstream medium. Those in any doubt should bear in mind that UK sales of Grand Theft Auto: San Andreas generated £24 million in gross revenue over its launch weekend in 2004. This was more than the cinema release of Harry Potter and the Prisoner of Azkaban, which took £10 million in its opening weekend. According to OMD, the UK gaming market is worth more than £2 billion and over £14 billion globally, making it bigger than cinema.
"The geek image of gaming is completely wrong. OK, it's not a good medium for reaching old ladies, but it's great for anyone under 35," says Jean-Paul Edwards, head of media futures at Manning Gott-lieb OMD. "Gaming is now becoming a must on a media schedule for any youth-targeted brand.
These audiences are not watching as much TV and they're hard to reach.
Gaming won't do the job on its own, but it will play a significant part."
Edwards sees some wealthy niches within the gaming market. "IT entrepreneurs who are millionaires by the age of 30 often use gaming to relax," he says, citing the fact that Aston Martin received numerous phone calls enquiring about purchasing the model that appeared in Grand Turismo.
Nissan even created a specialist version of an existing model on the back of demand created by gamers.
Brands are starting to experiment with gaming, but, according to Ed Bartlett, CCO and VP of publishing at network IGA Partners, the medium could be made to work a lot harder. He highlights a study by Nielsen in the US, which found more than half of 'heavy gamers' liked real products in a game and 70 per cent thought their inclusion improved it. "That's a unique situation for an advertiser to be in," says Bartlett. "It's rare to find a medium where the user wants advertising. But, while in the US, people are spending as much time gaming as watching TV, less than 0.1 per cent of ad spend is going into games."
Channel test
Why the hesitation? Bartlett thinks it's down to nervous clients waiting for the "big case studies" to reassure them, and he advises clients to get to grips with the market now and test the channel.
One brand that has tried gaming is fashion label Ben Sherman, where head of marketing Suzanne Egleton has a significant advantage over her peers as she spent 10 years working in marketing in the gaming field at AOL, Microsoft and Sega. Yet, even with her experience and industry contacts, she finds the gaming industry hard to negotiate at times.
"How the gaming industry is structured is a bit of a minefield," says Egleton. "It's hard to know whether you need to be speaking to media owners or games publishers. It's an area that media agencies need to start looking at more because clients need help, support and advice on how to approach it."
She adds that clients should not be put off by the technical side. "You don't need the depth of technological understanding that you'd think you need. It's very different from marketing on the internet, where you need a level of technological knowledge."
Egleton thinks gaming is a "natural" advertising area for Ben Sherman, given that it is a lifestyle brand targeting 18 to 34-year-old, mainly male, customers. The first deal she struck was to advertise in Pro Evolution Soccer, where the brand appears on billboards lining the football pitch.
This is called static branding.
But, Egleton doesn't see herself as an advertiser: "I see myself as a partner, not an advertiser. It's not just about pure in-game advertising.
It's more than that. I'm looking for a strategic partner who I can work with on a number of levels. It's about co-marketing, which enhances the two brands; it's not about 'here's my brand, stick it in the game'."
Ben Sherman looks to generate extra value from its association with the game through PR activity, promotions, retail marketing and online marketing.
The most difficult decision for clients is deciding which game to support.
Aside from doing your homework on which titles are tipped to be hits and which audiences they're likely to attract, Egleton advises clients to ask themselves if the game offers the right brand fit. Some of the most successful games are also controversial, such as Grand Theft Auto.
"I respect a lot of the controversial games in the marketplace, but, from a consumer point of view, we have to do the right thing by the brand and make sure we don't do anything too controversial," says Egleton. Pro Evolution Soccer was chosen for its global reach, mainstream appeal, and the fact that it is compatible with multiple games platforms and the 18 to 34-year-old core audience. She describes the deal as a resounding success, which she measures by the number of units sold and average length of time spent playing the game.
In Ben Sherman's second, unnamed, gaming deal, which was in the process of being finalised when Revolution went to press, gamers will be able to dress players in the brand's clothing by moving the icon into its retail store, which has been realistically recreated for the new game. "This is about brand experience," Egleton explains. "It's not just about branding, but about making an emotional connection with consumers. After all, fashion is a very emotional attachment," she says.
This kind of advertiser involvement with a game is called 'situation placement', which is defined by IGA Partners as a "fully interactive product placement" and the "seamless integration of a brand or product into a fully interactive gameplay situation".
Product values
Bartlett believes the most successful situation placements enhance the gaming experience without being irrelevant or obtrusive. Examples include placing energy drinks within games to revitalise the characters or the use of GPS systems to help them navigate. "You can illustrate the product values in a far deeper way than with other media. Your character can drink and actually be refreshed, so there's a real implication of a brand's value," adds Edwards.
Another option is to develop 'branded content' within games. This is where advertisers create extra, branded features or gameplay within a game, based on their product. For example, in Red Bull's link with TT Superbikes, gamers could access a more powerful bike on completion of the game. This deal was forged by Hive Partners, IGA Worldwide's in-game communications consultancy. "Players could then unlock a virtual facsimile of the real Red Bull-branded superbike, as well as a completely new challenge, allowing them to play the game again with the new bike, and try to beat their best time," says Bartlett. "That added hours of extra fun for the consumer at no extra cost."
Honda is another good example of a brand-specific advertiser, he says.
It recently branded a section of popular racing franchise Race Driver, by UK publisher Codemasters. This enhanced its profile in the retail game and in the distribution of free demos, which raised awareness of Honda and the game.
Other brands have preferred to part-fund an entire game, earning the right of headline sponsor and an exclusive presence for its products.
Ford did this with its Ford Racing game franchise.
Barlett explains: "This is more akin to product licensing, and we're seeing this increasingly extending from real-world sports and film franchises to brand and media owners. Games have changed dramatically in the last decade from being largely based on fantasy to being based on real life, so gamers expect to see photorealistic cities, believable handling of a car, and real advertising and products to rubber-stamp that authentic context."
Brands can also boost their offline sponsorship properties by sponsoring similar games online, and this is set to gain popularity. "With online gaming, it's becoming increasingly like a sport. Xbox Live allows tournaments and leagues, and even real-time spectating of matches, so there are lots of relevant opportunities for brands who already sponsor racing leagues or sports tournaments," says Bartlett.
The experts agree that online gaming is set to change the face of in-game advertising. It already allows 'dynamic in-game advertising' (DIGA), where advertisers can reach much bigger audiences because game titles and ad spots are aggregated via an ad server.
"The problem with static advertising is that games are a hit-driven business.
If a game flops, you have issues because your brand is hard-coded on to the disk, so you have to make sure the game is suitable in reach and sales.
With dynamic advertising, you don't have that problem. If you're a car brand, you can put your campaign across 20 racing titles at the same time.
And if you do dynamic billboard advertising in a game, we're able to update them and measure their effectiveness," says Bartlett.
DIGA also allows geo-targeting, where advertisers can target specific territories. For example, enabling ads to be seen in France and the UK but not the US. But, as yet, not all platforms are compatible, and the 100 million PlayStation 2s on the market cannot receive dynamic advertising.
Yet, with the launch of Xbox 360 and imminent arrival of PlayStation 3, it is expected that at least half of the gaming community will be connected online by 2008. "Then the market will really take off," adds Bartlett.
Dynamic advertising will also be more attractive for advertisers as it will be much more accountable. It will be possible to track ad impressions.
"We will be able to deliver above-the-line advertising messages in a very engaging medium, but with below-the-line levels of measurability," says Bartlett."
Direct sales
In future, Edwards believes more advertisers will link gaming with the direct sales of products. This is already happening in the US, he says, citing Pizza Hut's deal with Sony game EverQuest. "The average EverQuest player plays for 22 hours a week. It's so addictive that it's acquired the nickname 'Ever Crack'. Gamers need to eat, but they don't want to leave their computer, so they can press a button and a small pizza menu will pop up. They click the pizza they want and Pizza Hut bills Sony, which adds the cost to the gamer's bill," he says.
Pizza Hut has added a feature where a knight in shining armour appears on the screen bearing pizza when the delivery man arrives at their door.
The idea being that most people will play EverQuest wearing headphones and wouldn't hear the doorbell.
Advertisers could also build on their association with a game via on-pack promotions that give away cheat codes or passwords to a secret level where prizes can be won. "We need to think about how the brand can fit into the game, not how the game can fit into the brand," says Edwards.
While online gaming will make it easier to measure the effectiveness of in-game advertising, there's still a dearth of research on the subject.
Bartlett says the medium is "very cost-effective compared with traditional marketing channels", but admits he does not have any hard evidence to back up his claim. "We are limited in what we can say. We know it's a completely engaging medium, unlike TV where you could be leaning back or chatting, because gamers have to be looking at the screen," he says.
Research is an area that in-game media owners like IGA are addressing by running consumer focus groups worldwide to discover the effect of ads.
IGA is also working with ITVX in the US to ascertain the value of product placement in games.
But, clients like Egleton don't need convincing that in-game advertising is an effective and increasingly important medium for reaching ad-savvy audiences. She believes gaming is only just starting to realise its potential: "As gaming develops and goes online, there will be a lot of new technology that will make games more interactive. With that, there will be plenty of opportunities to communicate a brand in new ways. It's an exciting time."
MASTERCLASS PANEL
Jean-Paul Edwards is head of media futures at Manning Gottlieb OMD. His brief is to advise clients on how they can take advantage of the new technology platforms available. Previously, he ran the agency's online department.
Suzanne Egleton is head of marketing at Ben Sherman. With 10 years' experience in the gaming industry, she has held marketing roles at AOL, Microsoft and Sega. Last April, she joined Ben Sherman, for whom she has struck two in-game advertising deals.
Ed Bartlett worked in video game development for 12 years, from managing product analyst teams on titles and platforms to design. He is now CCO and VP of publishing at network IGA Partners and founder of Hive Partners, a creative in-game ad consultancy.
CHANNEL 4 TARGETS 'ANARCHY ONLINE' GAMERS VIA 'LOST' ADS
Channel 4 used in-game advertising, through network Massive, to launch drama series Lost in August 2004. A £1.4 million trailer was created to promote the series and was aired within a popular online game called Anarchy Online.
The game is global, but has a particularly active UK base, which Channel 4 wanted to target.
Being a sci-fi themed, multi-player game where players explore an epic, realistic world, it fitted well with Lost, in which plane crash survivors are stranded on a desert island with mysterious inhabitants.
The link allowed Channel 4 to communicate to the key target audience of 18 to 40-year-old males who are tech-savvy and interested in science fiction.
"The Anarchy Online and Lost audiences mirror one another perfectly.
AO is targeted at males aged 18-40 who are tech-savvy and enjoy being immersed in this type of TV," says Massive chief marketing officer Nicholas Longano.
In-game advertising was also chosen because it reaches people in the middle of their entertain-ment experience, rather than interrupting it.
Both static and video ads were used, all contextual, and viewed on posters or video games within the game. Some appeared in real-life situations such as on roadside billboards or on the wall of a subway, which served to make the gaming experience more realistic.
Within the game, players were encouraged to view a number of teasers that led up to the trailer being aired in both the game and on Channel 4 itself.
"We worked with the game's creators to ensure the advertising did not jar, but rather fitted well into the game environment. The advertising was relevant and interesting to the gamer," says Longano.
To measure effectiveness, Massive used focus groups and ad-hoc surveys.
According to its research, the campaign achieved a recall rate among the target audience of 60 per cent.
The push was deemed a success as it provided access to an audience that Channel 4 would normally have trouble reaching with traditional promotions, but who would be interested in the subject matter in Lost.
TOP TIPS ON IN-GAME ADVERTISING
1. Research how games can be used, from the title's creation to in-game advertising.
2. Find out which games are being released and which are predicted to be hits. Get expert help from media agencies with gaming experience or specialist consultancies.
3. Understand the different types of games and audience they attract. Each genre appeals to different people, so take the time to understand which genre is appropriate for your brand.
4. Use your imagination: audiences respond to new experiences and a driving game might not be the best way to promote a car brand.
5. Be ambitious: you're creating entertainment, so you can develop an open dialogue with your consumers that could last for months or even years - don't stop when you've got their attention for five minutes.
6. Use your data on your customers. You're the expert on their favourite shows and music - that's invaluable in planning games initiatives.
7. Understand all the benefits. No-one expects a game from BUPA or M&S, so it would attract attention from the press and consumers.
8. Create a deal that works for your brand. As games are a hit-driven business, investigate whether your contract has any flexibility with regard to the success of the game.
9. Understand the games retail market. Use knowledge of your existing channels to help your games reach your target audience.
10. Enjoy it - you're creating entertainment that could redefine your brand or market.
Source: branded entertainment specialist Tweed London
CHECKLIST Questions that should be considered when embarking on advertising within games - Is this the most effective use of my budget? - What in-game advertising am I going to do? - Is this the right game to be associated with? - Is it a good brand fit? - How can my brand's presence enhance the gaming experience? - Am I using interactivity to the fullest? - Can I show the benefits of my product? - What else can my brand do to engage gamers? - Where is my brand being included in the game and how will that affect the number of people who see it? If it only appears in the final level, for example, you run the risk of being seen by less gamers - How can I increase distribution and awareness of the game? - How can I leverage the game tie-up in other activity, such as PR and in-store? - How is the ROI being measured?