Programmatic for in-game advertising is the only way to scale

Tobias Knutsson, Chief Commercial Officer at Adverty, says that in-game ads and programmatic are made for each other. 

As 2020 limps towards a welcome conclusion, there will be many advertising executives eagerly anticipating the eventual resumption of business as usual. Though in many respects our habits and routines will have been permanently altered by months of lockdown, as life gradually returns to something nearer normal, so too will the majority of consumer behaviour.

It was perhaps inevitable that Netflix reported it had fallen short in subscriber targets in Q3 – 1.1m fewer than the Wall Street projections – given not only the sheer volume of new members they had signed up in the previous two quarters, but also the signs of TV viewer fatigue that has become another casualty of endless lockdown.

However, the world of gaming is seeing no such signs of slowing down. Gaming usage had increased by 75 per cent in March – before we even entered lockdown – and the pandemic has not hurt the sector one bit. Indeed, 2020 has been a bumper year for the industry, which is now worth an estimated $159bn (£117bn) globally, up 25 per cent year-on-year, with a projected growth to $200bn by 2023.

And of those engaging with gaming, 2.6bn now play on mobile, making it the youngest, largest and fastest-growing gaming platform, which is outpacing TV as the media platform of choice.

Huge growth
It is this huge growth in mobile gaming that presents the biggest opportunity for advertisers, and yet it remains an enigma to many. Despite the significantly higher engagement rates of gamers compared to TV viewers or those browsing the web, a study by OMD Sweden earlier this year showed that just $4.5bn was spent on gaming advertising compared to $93bn on social media.

Gaming today covers such a far broader range of demographics than it once did. As well as a huge proportion of women taking part, it is also the perfect channel via which to interact with young, digital-savvy consumers. These are people who have grown up with advertising, and so are arguably more accepting of its existence – particularly in the popular free-to-play (F2P) world – but also have higher expectations for its role in their lives, demanding tailored, personalised and unobtrusive advertising.

And it is these precise criteria that support the increasingly-popular school of thought that the one true way to scale in-game advertising is by trading ads programmatically, taking advantage of the contextual, flexible nature of the approach and perfectly marrying the high engagement rates of gaming with the availability of first-party data to provide the perfect opportunity for targeted, effective advertising.

In-play advertising
A perfect case in point is a campaign we are currently running for Activision’s Call of Duty: Black Ops Cold War with OMD Sweden. Out of home advertising seamlessly steps into the digital world in the form of in-play advertising. The ad in the digital world looks exactly like it would in the real world – in this instance on a bus stop – and is exactly in the player’s line of sight. Agencies and brands are realising that gamers today are far removed from the cliched gamers of years ago: they are all ages, all genders and from all sorts of different backgrounds. Today a gamer could be anyone with a mobile device – brands who overlook gamers are missing a golden opportunity to effectively and efficiently target consumers, with powerful results.

But marketers needn’t just take my word for it, or that of my peers. The technology now exists that allows advertisers to measure the performance of their ad, feeding back information about how often it was seen and by whom.

Furthermore, the nature of gaming all but promises to deliver a greater impact for ads. Native, in-play ads, which appear as part of the scenery, whether it’s a billboard or a clothing brand that appears as part of the game, makes brand advertising impossible to ignore. Similarly it is impossible to skip ads, and while players remain steadfastly focused and in the zone, there is very little chance they will look away and miss the chance to see an ad.

At a time when advertisers are desperate to engage with audiences and avoid having their ad skipped, muted or ignored, in-game advertising eradicates the risk of all three eventualities. Ads that appear seamlessly in video games are measured in views and time in view, not clicks, ensuring the medium remains completely fraud free – a problem that has plagued traditional programmatic advertising almost since its inception.

Thanks to the popularity of the F2P format, 98 per cent of gaming revenues come from in-game transactions. That, combined with the size, diversity and continued growth of the market, make it the optimum environment for advertisers. Throw programmatic into the mix – with its targeting, flexibility and effectiveness – and it is clear to see why it is fast becoming an unmissable opportunity for brands who want to make an impact.

If they are to tap into this hugely valuable audience, marketers and their agencies must start seriously considering in-game advertising in their media plans, and ensure they are utilising all the available technology.