Commercial break-through

Who is it that’s driving in-game advertising – is it publishers or developers?

Primarily it’s the publishers, but developers are waking up to it a lot more. We’ve had some notable success with people like Nadeo – those guys have developed TrackMania Nations into one of the biggest online/driving franchises in the world now through advertising, through being able to release a free client. They’ve generated audiences of six, seven million people.

If you look at the rest of our client list – people like Valve, people like SimBin – we do have a pretty significant proportion that’s developers. But really, when it comes down to the publishing market, these are the guys that have huge rosters and release between 15 and 100 games a year – they are the ones that have the huge PR costs and huge development costs and huge marketing costs, those are the guys taking the huge risks. They’re the ones that need to be finding the new revenue streams, because they’re getting squeezed at retail and they’re trying to fund and produce increasingly complex games.

Something needs to change, and I think in-game advertising is one of those changes, and I think the trick is for us to be able to do it in a creatively compelling manner, keeping it contextual and unobtrusive to the gamer – and that’s really what our focus is as a company.

What’s in it for developers if a publisher wants to add advertising to their game? Does the developer get part of the money or is it a case of ‘if you want your funding you’ll do this’?

It very much depends on the deal – if it’s a work-for-hire deal then typically it’ll be part of the publishing process and so the developer can schedule for it and it’ll be covered in the costs.

What we are seeing is more developers coming in and looking it as maybe being a way of funding a game so they don’t lose ownership of the IP – they can generate revenue streams and get investment on the back of that, be it completion bonding or venture capital funding. A lot of developers see this as a way of bringing in additional financing and reducing the risk that comes with developing a game.

It all depends on the game concept, though – you can’t come to us with a 1920s war game and expect us to be able to generate enough money from advertising for development. But we’ve got more people coming in with really contemporary online games where they can, like the Nadeo example, give the client away for free and generate a large audience.

Do you act as a consultant in regards to helping developers integrate in-game adverts in the best possible way?

Yeah, it’s less consultancy and more just part of what we do. We’ll look at the game concept, even from the design doc stage, we then have internal game producers who’ve worked in the industry for a long time – people from Sony, Namco etc. – and they can talk schedules and all the sort of day-to-day issues with the development team.

They act almost like town planners, they’ll come in and look at the game environments and recommend where the billboards can go, so we can make sure we’re reaching a certain number of impressions per hour, and that helps us build a model from a revenue perspective. It’s not a case of dictation, it’s a close working relationship – if we don’t get the right imagery in there, the developer won’t be able to generate the right revenues for it. It’s an iterative but cooperative process.

Do you find that developers plan for advertising properly?

Some of the developers we’re working with we’re now renewing contracts for new games, so we’ve been through the process once and they know what needs to be done. But we do still get a lot of people who come in and say “We’ve got three weeks left until master, can we throw some ads in?” and it just doesn’t work like that.

The planning process, locating the ads, the way the level design process works these days means there’d be a lot of re-exporting, re-lighting and pre-calculation, collision detection, that kind of stuff. You just can’t do that at such a late stage. We’re doing an awful lot of work in terms of conference talks, those kinds of things, to get people to start thinking about this at an earlier stage.

When is the best time to be thinking about this integration?

Preferably it should be right at the beginning. As soon as you decide what your game concept is, if there’s a place for in-game advertising then you should be thinking about it, scheduling it. It doesn’t take a long time to integrate the tech – maybe half a day – but deciding on where the billboards should go and then really optimising them, that’s the key.

You don’t want too many, because that’s bad for the gamer and affects the balancing of the delivery of the campaigns – you can churn through a campaign too quickly, which isn’t desirable for the advertiser. There’s a minimum number of impressions you need to generate on an hourly basis per user, so if you plan for this early it won’t impact the schedule at all.

How has the reaction been from the brands? Were there many that were keen straight away or has it been a slow burn?

It’s been the obvious ones that have been up for it straight away – Red Bull were one of the first clients that came into the space and spent money and did things properly with a strategy. What we’re seeing now is that firms have dipped their toes in and seen measured results and positive benefits, and now they’re coming in with a dedicated budget. Also, we’ve now gone from talking to the brand directly to talking to agencies, and agencies can represent tens or hundreds of brands.

Who is it that decides what ads go in which game? What stops, for example, a tampon advert appearing in The Darkness?

For dynamic ads there’s a sign-off process that happens before any ad goes live. When the game goes live we use our booking system to interface with the SDK that’s in the game. So a campaign will come in, we’ll input the campaign data – billboard size, the length of the campaign, etc. What happens then is that the developer and the publisher then get an e-mail notification that shows them the creative and the campaign details and they can then click Accept or Decline. What that means is that they’re able to vet every ad that comes in.

We’ve found that often the publisher is having a sign-off and the developer is having a sign-off too, so the publisher is looking at it from a legal/marketing point of view and then the developer is looking at them more in a creative context point of view – ‘does this fit with the look and feel of the environments?’ and so on. So I think there’s definitely a role to be played from both sides.

There have been research stories recently saying the in-game advertising isn’t very effective, because people are so entranced with the game that they’re not noticing billboards on the periphery. Firstly, what do you think of this, and secondly, how do you intend to progress in-game advertising beyond static billboards?

There are some research studies coming out that are trying to grab headlines with these top-line assertions – first of all they conflict all these studies by very respected companies like Nielsen, Interpret. Secondly their methodology is fairly flawed – how we qualify our ad impressions is based on time and size on screen. We don’t even count an impression until a certain ratio of the screen, so when it does hit this ratio it’s going to be big enough to register in the players head.

When you talk about billboards not being at eye-level and so on, it wouldn’t have registered as an impression on our network and the brand wouldn’t have paid for it anyway. So it’s completely irrelevant unless you’re testing with our impression metrics.

In terms of future things, there’s definitely a lot of things we’re working on. When it comes down to it, if it’s not ‘opt-in’ then it needs to be something that’s completely contextual and adds value to the gamer.

We’re doing a lot of stuff like downloadable content, add-ons, those kinds of things, where you’re actually giving the gamer content to make the game longer or to give them a new experience in a game they’ve already paid money for. I think that’s an area where brands are going to become increasingly involved. Also, being on consoles nowadays is something that’s really important to brands – typically advertising was limited to PCs which is less desirable to advertisers.

There’s a lot more integrating you could do, but you’d have to do it on an opt-in basis. So that’s something we’re looking at for the future. There’s lots of things that we’re working on, but you’ve got to be very careful of the consumer at the end of the day, because that’s our focus. The brand wants the best impression on the consumer and so does the publisher, so we’re no going to do anything that affects that impression or we wouldn’t have a business.