The gaming market generates a staggering $183.9 billion annually, yet there’s a significant underutilization in in-game advertising. While millions engage with games globally, the opportunity for advertising remains largely untapped.
A new report unearths insights into the demographics, behaviors, and potential for brands within this dynamic ecosystem. This intriguing landscape holds promise, but complexities abound.
Untapped Potential in Gaming Advertising
A recent study highlights that the gaming market generates a whopping $183.9 billion in annual revenue. Yet, in-game advertising remains surprisingly low. This suggests a massive, untapped potential for advertisers.
The WARC Global Advertising Trends report reveals that despite gaming’s enormous reach of 3.4 billion people worldwide, in-game advertising is still not fully exploited. Alex Brownsell, Head of WARC Media, states, “Gaming is huge, both in audience and cultural impact, and its highly complex ecosystem spans devices and platforms defying conventional definitions of a channel.”
Diverse Gaming Demographics
Different age groups are engaging with gaming regularly. Newzoo’s research finds that 72% of individuals aged 35-54 and 46% of those over 55 play games at least once a week.
This broad demographic spread offers unique opportunities for brands to target a diverse audience. Nearly 90% of advertisers view gaming as a ‘brand safe channel,’ thanks to advancements in fraud deduction, age rating, and interactive ad metrics. Yet, caution remains in the marketing sector.
In the US, advertisers are projected to spend $6.7 billion on in-game ads in 2024, a rise of 10% from the previous year. This still only accounts for 3.7% of total US digital ad spend, according to Dentsu’s findings.
Complex Gaming Ecosystem
One reason for the slow uptake in in-game advertising is the complex nature of the gaming ecosystem. Brands have numerous touchpoints to reach gamers, from Twitch streams to Discord chats and e-sports sponsorships.
Publishers are working to prove the effectiveness of in-game ads, making it challenging for brands to commit significant budgets. Furthermore, people game for various reasons: 53% to escape daily life and 63% to bond with family and friends, according to Activision Blizzard Media.
Newzoo also reports that mobile gaming is popular, with 48% of players using more than one device. Jo Pereira from EssenceMediacomX notes, “Gaming is a whole entertainment ecosystem, not a channel, and is stealing share from entertainment platforms.”
Importance of Capturing Attention
Capturing and maintaining attention in gaming is crucial. Nina Fedorczuk of Omnicom Media Group Asia Pacific states, “Gaming requires attention. It’s unlikely that gamers multitask in-game; everything else is just background noise.”
For brands, the challenge is to engage gamers without disrupting their experience. According to Unity, in-app advertising has shown significant growth, with a 26.7% year-on-year rise in average revenue per daily active user.
Although platforms like Roblox are looking to boost advertising revenue, the report warns that such efforts may be ineffective without support from other channels, especially social media.
Future of In-Game Advertising
The future of in-game advertising looks promising but requires strategic implementation. Brands need to balance in-game ads with other forms of media to reach and engage their audience effectively.
As advertisers become more familiar with the gaming environment, they are likely to invest more in this space. However, the industry’s complex ecosystem and the need for compelling evidence to support ads are hurdles that need to be addressed.
Effective in-game advertising will also depend on the continual development of tools that ensure ads are engaging and relevant without interrupting the gaming experience.
Conclusion
Gaming, with its expansive audience and cultural impact, represents a significant opportunity for advertisers. Despite the slow uptake, advancements in technology and a better understanding of the gaming ecosystem could see a rise in in-game advertising, benefiting both brands and gamers alike.
Gaming is a multi-faceted and expansive market, ripe with advertising opportunities. As technology advances and the understanding of gaming ecosystems improves, in-game advertising is poised to grow, providing advantages to brands and enhancing the gaming experience.
The potential for growth in this sector is significant. With strategic implementation and a focus on non-intrusive adverts, both brands and gamers can benefit greatly from increased in-game ad investments.