Analyst: In-Game Ads To $732 Million By 2010

According to a new report published by analysts the Yankee Group, in-game advertising could surge in size to around $732 million by the year 2010, up from just $56 million in 2005 and $22 million in 2004, as companies begin to target in-game worlds for static and video commercials. The company envisages that nearly 200 games will contain in-game advertising by the end of 2006, representing nearly all the major video game platforms, as companies such as Massive Incorporated, IGA Partners, and Double Fusion swiftly move to sign up major publishers to their in-game ad networks. Yankee Group senior analyst Michael Goodman commented of the report and his view on trends: "Although the in-game advertising market is still relatively untapped, its promising business model will lead to swift market development. Effectively competing in the interactive gaming market for the video game and advertising communities requires careful attention to the intricacies of the industry." Interestingly, a recent survey from MarketingSherpa referencing in-game ads showed that only 10% of advertising firm respondents planned to spend on product placements within video games during the next twelve months, the lowest response compared to other new forms of advertising such as ads on RSS feeds (40%), blog networks (30%), and sponsoring podcasts (14%). However, when asked which advertising schemes the marketers planned on investing in more than a year out, in-game advertising gained the biggest response, with 36% of respondents saying they intend to do placement within the games, showing that the market is gaining significant interest. [The CMP Game Group, which also includes Gamasutra, is launching a series of events which include the GDC FOCUS ON: Game Advertising Summit, to be held June 9th, 2006 at the San Francisco Marriott, and featuring personalities from Microsoft, EA, and major in-game ad firms alongside advertisers discussing the issue.]