Three takeaways from VideoWeek’s gaming and advertising event

Gaming was already a massive industry before 2020, but the pandemic inspired a surge in play as consumers turned to mobile and video games to provide entertainment, distraction and social interaction. In the US, video game revenues rose 20% to reach almost $180 billion last year, making the gaming industry bigger than movies and sports combined.

While some brands have seized the chance to reach engaged users with relevant advertising in the gaming environment, there is still some hesitancy around how to approach this valuable opportunity. VideoWeek’s recent gaming and advertising conference explored some of the key topics surrounding in-game advertising in a series of insightful sessions. Here are three of our key takeaways from the event.

Moving beyond the gamer stereotypes

When considering gaming many people have a preconceived idea of ‘the gamer’ and jump to the stereotype of teenage boys in dark rooms fuelled by energy drinks. But this typecast is far from representative of today’s gaming audience. In fact, for some types of gaming, young people are very much in the minority. To understand more about who is playing games, brands have to consider the various gaming formats.

Mobile gaming is booming and is played by a wide cross-section of society. Across the globe, users downloaded 30% more games in Q1 2021 than in Q4 2019, spending a record $1.7 billion per week. It is important for brands to understand that players of mobile games like Words with Friends are just as much ‘gamers’ as those playing console games, and the advertising opportunity for these games is just as vast. Mobile gaming puts brands directly into the pockets of consumers, meaning they can target audiences wherever they are at various times of the day, not just when they are at home in front of a console.

Even with more traditional console-based games, the audience is becoming increasingly diverse, spanning a wider demographic range. However, interpreting the data from certain games for ad targeting purposes can be difficult or misleading. For instance, some female players will choose to play certain male-dominated games as male characters to reduce the potential for sexism within the gameplay.

Exploring the advertising value exchange

Advertising in gaming has to strike a delicate balance between getting the message across and protecting the user experience, but players are generally far more open to advertising if there is a fair value exchange.

In mobile gaming the value exchange is relatively well established and users are generally more tolerant of ads, particularly if they don’t have to pay to play. They largely understand that advertising is necessary to fund game production. However, the value exchange is more difficult in other types of games, especially if the user has paid to access them.

Players of expensive console games like Call of Duty can be understandably hostile towards ads that interrupt or take away from their gaming experience by breaking immersion. However, when ads appear natively within the gaming environment, gamers are far more receptive and willing to engage with them. VideoWeek event partner, Bidstack, enables in-game advertising that appears naturally during gameplay, perhaps on billboards and signs in open world games or on pitch-side hoardings in virtual sports stadiums. These ads help to make the experience more authentic and actually increase the enjoyment of the game. To make a success of in-game advertising, brands need to find innovative ways to add value.

Another way to ensure a fair value exchange for advertising is to offer in-game rewards to players that choose to watch ads. As an example, Simulmedia, another of the VideoWeek event’s partners, ran a trial to introduce TV-like advertising into the gaming space. In one particular game users have to wait in a virtual foyer for other members to join. These users were given the opportunity to watch ads in return for rewards that would usually be paid for, such as coins or tokens. The trial had a positive response and gamers that watched ads also ended up playing more frequently and spending on extra rewards within the game. The study defined four critical elements of in-game advertising, concluding in-game ads must be permissioned, opt-in, skippable and rewardable.

Reaching a wider streaming audience

While the focus is often on reaching the gamers themselves, brands shouldn’t neglect the wider audience that can be accessed through video-game streaming, which continues to increase in popularity. The number of hours consumers spent live-streaming video games, via platforms such as Twitch and YouTube, increased almost 70% in 2020. And viewing pre-recorded gaming sessions on the same platforms is also popular.

In addition to continuous smaller-scale streaming of popular games such as League of Legends, there are also big ticket events brands can associate themselves with. As an example, concurrent online viewing of the pre-pandemic Fortnite World Cup in 2019 peaked at 2.3 million, while 19,000 fans packed out New York’s Arthur Ashe Stadium for the event.

While many brands have already started to take advantage of advertising in and around the gaming space, others are only just opening their eyes to this immense opportunity. Once advertisers move beyond the obvious stereotypes, consider the wider gaming audience and find innovative ways to offer a fair value exchange, gaming can be an applicable, valuable and relatively untapped environment for just about any brand.