Sunday, April 15, 2007

For The Love of the Game

In a recent eMarketer research report, Video Game Advertising, advertising spending in video games (either by in-game advertising or advergaming) is expected to grow by 23% CAGR (compound annual growth rates) annually in the next 5 years. In the US alone, such spending is expected to almost triple between 2006 ($346MM) to 2011 ($969MM). Advertisers are finally realizing where their target consumers are and going after them there. With such tremendous growth in ad spending, it also means that (1) more consumers are playing video games than before, and (2) that more than young males (ie women and older gamers) are being targeted.

KW Low Down Video Game Advertising

More players mean fewer of them are watching television, the advertisers' previous playground. Looks like it is no longer enough for a television network to offer broadband videos anymore, they will have to include a gaming strategy as well, if they want to keep their piece of the total advertising pie. Google bought Adscape recently for $23M and bought Massive for $200MM, both of which insert advertising into gaming environments. It's only a matter of time before they make it easy for advertisers to buy into video games and with better analytics.

While console games still skews young, adults prefer casual online games. According to WSJ, Forrester Research reported that over 50% of online games players are over 30 years old. Their favorite games include mahjong, Sudoku and solitaire, and the gender breakdown is evenly split between male and female players.

Even print publications are getting in the "game". In the same WSJ article, teen titles from Hearst Magazines such as CosmoGIRL! and Seventeen had been getting up to 10% of their site traffic from casual online gamers. Understanding that fact, they are redesigning the site to feature casual games more prominently to increase and engage their audience base. Other magazine websites are following suit. As casual games become mainstream and are easily available, their players will have to trade out other entertainment time (ie television, movies, etc..) for games.

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