Double Fusion on in-game advertising and the role of the gaming industry

Let’s face it: in-game advertising is all around us, and it appears to be here to stay. Exactly how is the market view evolving, and what should the industry do about it? Double Fusion Chief Executive Jon Epstein took the time to answer those questions in a recent interview.  More on that after the jump.

Depending on who you ask, in-game advertising can either be a boon or a bane. Regardless of how people may feel about it, the fact remains that the market is changing. Double Fusion Chief Executive Jon Epstein tackles the issue on three fronts: why it’s important to the industry, how the market view is evolving and what the gaming industry should do about it.

Besides the obvious monetary reasons involved, Epstein explained that these ads act as a catalyst for building a gaming audience and helping that audience to grow. This is especially true for companies with free-to-play MMORPGs and casual games. The formula goes something like this: ads add more value to games, which brings in more players. Thus, the player, the gaming company and the advertisers all benefit from it.

According to Epstein, in-game advertisers have learned quite a few things about the market:

• They’re learning how to place ads better, and in such a way that they work for everyone.
• Contrary to previous belief, static, integrated ads do not detract from their more dynamic counterparts – they complement them.
• Likewise, around-game ads complement their in-game brethren and make for better revenue opportunity and balance.
• The ad campaign needs to fit the context. For example, it makes sense to use new technology, such as 3D ad placements, for 3D games.
• In-game advertising is on a roll.

Finally, Epstein outlined the gaming industry’s role in all of this. He said that there are a number of things that video game publishers must understand: how media markets work, what drives the markets, and what drives a sell-through. Furthermore, publishers must also realize that demanding large minimum guarantees and advances is not the way to go – planning is. As Epstein put it:

You have huge visibility on your games and game development cycles. If you want to benefit from in-game advertising revenues and user benefits, plan ahead and build it into the cycle. Developers have enough stress as it is making deadlines, and, as easy as it is, an unanticipated in-game advertising deployment in the schedule makes for poor work product, and suboptimal advertising. Commit, or not at all – we want to work with the publishers that want this to work, and we do not ever want to work with games where advertising isn’t appropriate.