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Jun 3, 2008

NEWS: In-Game Ad Company: In-Game Ads Really Work! (MSFT)

In-Game Ad Company: In-Game Ads Really Work! (MSFT)

video game ads.jpgHey marketers and investors: You know those nagging doubts you've been having about the prospects of "in-game advertising" -- once hailed as the ad biz' next big thing? Ignore them! Putting an electronic billboard in the middle of "Guitar Hero III" totally works!

So says Massive, whose business is -- you guessed it -- selling in-game advertising. The NY-based company, acquired by Microsoft (MSFT) a couple years ago amid much hype, has been struggling against the recent perception that there's a much more limited market for the ads than once thought. And they're also trying to convince advertisers that gamers -- a much sought-after market of youngish men who are abandoning traditional media like TV and radio -- will be perceptive to their pitches. Luckily, they have a new survey to prove just how great their ads are. MediaPost:

Adidas, for example, saw lifts in ad recall and brand affinity in users that were exposed to its ads in "Major League Baseball 2K7." Some 40% of exposed gamers were able to recall the company's tagline "Impossible Is Nothing," an increase of 90% over those that weren't exposed. Exposed gamers were also 70% more likely to agree with the statements "adidas is the only brand for me" and "adidas is an inspirational brand" than the control group.

Meanwhile, an entertainment studio ran a campaign for an upcoming DVD release in "Rainbow Six: Vegas." The study found that some 80% of the exposed gamers said that they would "probably or definitely purchase the DVD," up 23% from the control group

Even better news for Massive and the rest of the not-there-yet in-game ad business: Once you demonstrate these results to advertisers, they're compelled to throw money into the sector. So says... Massive marketing director Allison Lange Engel:

Engle said that the research enticed advertisers to up their spend. "We've seen buys jump from five- to six-figures and then from six-figures to over a million dollars," she said. "The return on research is showing how effective this medium is, and why it deserves to be part of their media plans.

We don't actually doubt that in-game advertising will work -- in particular circumstances, for particular products, in particular games. But to us this kind of hard sell sounds like an industry trying to convince itself that it's relevant. And that's a bad pitch.

See Also: Video Game Ads: Dollars Don't Match Hype

Ed: specific niche like sponsorship. Not scalable.

Mochi Media launches game-plus-ad network for web publishers

Mochi Media, the San Francisco company that offers ads that run in online casual games, and analytics services that look at game performance, is coming out with a new service. It has packaged its ads and analytics services together with its catalog of white-label games it syndicates, creating a way for web site publishers to both engage users through games and make money from that engagement.

Partners that are using the service include virtual world Gaia Online, social network application makers Slide and RockYou, and anime site Crunchyroll.

One of the target customers are the large game portals, like MSN Games or Yahoo Games, that are always looking for fresh games to offer. Mochi is a one-stop shop for finding, measuring and monetizing games. Some portals, at least, would otherwise, need to build their own ads and analytics services, or work with a variety of partners.

Revenue from ads on the publisher game network is shared between the publisher, the game’s creator, and Mochi. Games are rights-free, so the publishers don’t have to worry about complicated negotiations — or lawsuits. Ads can be targeted to web domain, game category and geographical location of users.

A similar concept was recently launched by NeoEdge Networks, a company that has built an ad network around downloadable casual games. NeoEdge, whose chairman is Atari founder Nolan Bushnell and which we recently wrote about, wraps its ads into the games, which are beefier and more complex than the Flash-based games that Mochi creates. Then NeoEdge allows customers to post widgets on their sites that let players download and play the games. NeoEdge gets a cut of the ad revenue. While the company strategies are very similar, both say they are in different markets because of Mochi’s Flash emphasis and NeoEdge’s downloadable focus.

While Mochi isn’t disclosing many numbers, it does tell me that its network is getting 60 million global unique visitors a month. Having only launched in October, this is pretty impressive — and a growth pattern we’ve been covering.

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