Citi Analyst: In-Game Ads Could Total $1 Billion By 2014

In-game advertising has received less attention than it had been getting a year or two ago, but the segment continues to grow, and a research note by a team of Citi analysts suggests the market could reach $1 billion in total by 2014. Currently, the in-game ad market stands at about $600 million, and Citi sees the most growth coming from the online gaming space. By contrast, the overall online advertising market is estimated at about $20 billion. Despite the widespread debates about the acceptability of in-game ads amongst gamers and the gaming press, Citi reports that such ads "have higher engagement and slightly higher [cost per thousand users, representing value] than traditional banner ads." The group also found that "advertisers' appetite for in-game marketing appears to be increasing." The average gamer age is 35, say the analysts, and 40 percent of "total gamers" are female -- broad demographics that make the space attractive to advertisers. Advertising is also tying directly into the separate trend of microtransactions, says Citi, as real-world brands are setting up shop in virtual worlds. And with Apple and Chinese internet portal Tencent investing into microtransactions as well, the firm thinks the segment could be "a multi-billion dollar opportunity."