You recently signed a major deal with NBC – can you tell us a little about it?
Justin Townsend: This new agreement effectively means that their digital sales force in North America will be able to sell a portion of our inventory alongside the various premium TV properties NBC owns and represents. This has a wide variety of benefits, not only extending our sales coverage dramatically through the most respected sales force in the industry, but also rapidly raising the profile of in-game advertising on the agenda of the leading brands and agencies in the US.
At a more strategic level it also reinforces in-game advertising as a premium TV media buy, versus the more commoditised online approach some of our competitors have been taking. Any CPM price erosion happening now is going to be amplified a thousand times once we are talking about a $1billion plus industry in a few years, which is something that publishers need to consider carefully.
You've also signed a number of new publishing deals including Codemasters, Merscom, Nadeo and Frogster Interactive Pictures in recent months – what do these deals bring to the company?
Ed Bartlett: Each deal has its own significance – Codemasters as already a valued partner on titles like Brian Lara and DiRT, however the company continues to go from strength to strength and their forthcoming titles are looking fantastic, so it's great to be able to extend our deal. Merscom on the other hand highlights our commitment to expand the network outside of just premium retail titles and the 18-34 male demographic to include exciting opportunities like casual gaming.
The deal with Nadeo was also a very important one for IGA given the unprecedented success of the original Trackmania Nations, which has had over seven million downloads to date. And Speedball, besides the personal resonance with the original game, is shaping up to offer a unique online experience to a new generation of gamers as well as the two million fans of the original.
It's currently the second most wanted game in Germany behind Crysis, so we expect strong consumer and advertiser demand right from launch. Bringing a new title into our network demands significant resources from our side, so every new signing is closely vetted by each different area of our business. We are definitely not interested in signing up games simply for the sake of a press release.
Do you feel that your business model has developed significantly in the past few years?
Peter Bilotta: It's been the advent of the dynamic network which has had the most impact on the industry and our own business. Being able to continually update new advertising campaigns after a game has shipped, geo-targeting and the CPM billing model have introduced the scalability and flexibility that was necessary to see the market grow beyond being more than just a niche.
That said, static and product placement still plays a very significant part and we don't see that changing. Brands today are seeking to engage with the consumer at their level and on their terms, and there are few stronger opportunities on any media schedule in the world today than a well executed contextual dynamic campaign or a seamlessly integrated product placement. We believe our current combination of investors, management team, technology and clients puts IGA in the strongest possible position to extend its leadership position in the market over the coming years.
IGA is clearly expanding rapidly at the moment – how much have you grown already, and what are your targets for future growth?
PB: We are now over 60 people, split fairly evenly between the US and Europe. The bulk of the management are based out of the New York, London and Los Angeles offices, with technology housed in Connecticut and additional sales offices in Chicago, Austin and Berlin. We have pretty much reached the peak of the ‘hyper growth' phase and are now growing more organically, particularly into additional European territories such as France, as well as working with respected media sales partners in certain territories such as Sensis in Australia.
The next major expansion for us is the push into Asia, which we are doing with the help of KTB Ventures. We already have significant consumer reach into the Asian territories through games like CounterStrike and TrackMania, which we are building out further with additional market-specific products.
Do you feel that the market is now embracing in-game ads – after some initial doubts?
JT: Wholeheartedly, yes. In fact increasingly we are having to scale down people's ideas and expectations. It may sound like hyperbole but I think once people see it working successfully in titles like CounterStrike and particularly Battlefield 2142 with its near-future setting, not to mention the TrackMania success story, they start thinking much more positively, looking at the opportunities rather than the perceived risks.
We currently have over 50 titles signed from over 20 different game developers and publishers and as you would expect we are extremely engaged with literally every major developer and publisher in the world, bar none, for products stretching out as far ahead as Christmas ‘09.
Is there a risk that publishers not getting involved now will lose out in the long term?
EB: There will always be strong advertiser demand for good quality ad inventory in premium games, however regardless of the market size and revenue potential today, the paradigms that are being set now will pretty much define the state of the market for the foreseeable future.
Every piece of research and every analyst report points to a market that is going to be worth of in excess of $1billion within a few years, but there are significant strategic hurdles and doors that need to be opened to get to that stage and at the moment the onus and expectation has been put almost entirely on us to drive that process.
How do you respond to some gamers' fears that ad-driven gaming can disrupt play or stifle creativity?
EB: Like most things it's impossible to get 100 per cent positive consensus. My immediate reaction would be to point people at the Burger King advergames developed by Blitz, which not only won the top advertising award at Cannes this year, but also sold over four million units as well as generating some positive reviews from the gaming press.
If the ad revenues brought into a title by IGA can make the difference between a new game IP being greenlit or not, then I think in-game advertising could actually be the single biggest catalyst for creativity in games in the last decade.