Gamasutra is reporting on comments made by Activision Blizzard CEO Bobby Kotick and Sony Group CEO Howard Stringer in the Financial Times, where they express doubts about the future of in-game advertising, and advertising in the digital landscape.

Sony Group CEO Howard Stringer and Activision Blizzard CEO Bobby Kotick have both voiced their skepticism over the potential growth prospects for in-game advertising, in a new joint interview at the World Economic Forum in Davos, Switzerland.

Speaking to British newspaper the Financial Times, Stringer commented that “The [supposed] solution to everything at the moment in the digital space is ad-supported. While advertisers are happy to talk that up, there is a limit to the amount of money available.”

Read more here.

An innovative and targeted Ad campaign could be very successful. The problem I see for a lot of MMOs is that it would be hard to blend the Ad into the game content. For example,  a Pepsi bottle or Nike shoes would seem very out of place in a fantasy MMO like DAoC or WoW. On the other hand, it would be relatively easy to integrate products like these, or even build a complete functional online store inside of an MMO like Second Life or Enropia Universe.

One technique that would be very likely to work would be a game-specific "Look under the cap" style campaign. For example: when you buy a marked bottle of Coke you get code that you can use in-game to get some random reward like limited edition items or gold or something. This might work with a game like WoW that has a large presence in main-stream society. I think WoW is popular enough with young adults who have disposable income to generate worthwhile returns for a company like Coca-Cola or Pepsi or anyone else selling a cheap, readily-available, consumable luxury item. MCDs a prime example company that could execute a campaign like this extremely effectively, especially since they now have (paid) WiFi access in many of their locations. Buy a Big Mac, get 10 gold in game. They could even sponsor a red-haired-clown race.

90% of sucessfull ingame advertizing is  location location location

first the add needs to be either  neutral or imbeded/ organic  like a mcdonalds sign  or window art

second method  is as some form of function or benefit  hoping into a chevy pickup to go accross town  or using  vodka to clean a wound    

Originally posted by Szark

Gamasutra is reporting on comments made by Activision Blizzard CEO Bobby Kotick and Sony Group CEO Howard Stringer in the Financial Times, where they express doubts about the future of in-game advertising, and advertising in the digital landscape.

Sony Group CEO Howard Stringer and Activision Blizzard CEO Bobby Kotick have both voiced their skepticism over the potential growth prospects for in-game advertising, in a new joint interview at the World Economic Forum in Davos, Switzerland.

Speaking to British newspaper the Financial Times, Stringer commented that “The [supposed] solution to everything at the moment in the digital space is ad-supported. While advertisers are happy to talk that up, there is a limit to the amount of money available.”

Read more here.

They are both correct in having those doubts.  People who think there is a place or possibility of success for in-game ads .... are thinking pie-in-the-sky for the most part.

There are always exceptions - some in-place ads do drive home a positive memory or 2 but usually they are in tv-shows or movies.  A flashy car in a movie or some cool gadget may leave a memorable impression and be worth it for the company who makes the product....    but it's mostly a miss-or-miss proposition [hits are very rare]

I honestly block out a lot of in-game ads - because i really am NOT looking for a friggin product when i'm relaxing playing.  dungeonrunners is loaded with ads and i completely block them out from memory so i can see the same one day after day after day and be completely oblivious to the product.

i do the same for most every website page as well - when i want a product i go looking. 

i cant be *sure* of this but i think there will be a fair correction in all online advertising just as there was the dot-com correction years back - it wont be to the same scale, scope, or cause as many jobs to be restructured- but it will cause a lot fo companies to rethink their marketing, strategy, and budget allocations.

I really dont see long-term viable "success" for most f2p games; similarly since Wow is a juggernaut i cannot see a huge success for any company that prices it's mmo/monthly sub above what blizz has WoW set at.   Maybe non-Blizz companies will realize as far as mass-market penetration goes low $$ costs + fun product makes for a competitive long-term sustainable scenario. [sure so many on here THIS SITE are probably willing to pay $20 a month to multiple mmo subs off and on ... but that isnt "mass market" that's a select vocal few lol]  In-game ads can possibly help supplement a low monthly subscription fee and garner a big game population for a new mmo ... but I sure would be careful with estimates if I was an internal analyst at some of these companies - they seem to miss the boat 50%of the time - not as bad a percentage as professional athletes ... but still a terrible "batting percentage" from a business perspective.

peace,

x

@xkey: I'm not thinking about it from the perspective of "this will allow MMOs to reduce the monthly cost for users" That's just a ridiculous proposition. I'm approaching it from the perspective of "this will help the company who invests advertising dollars move product and see a substantial return on investment". In-game currency, in most MMOs, is not backed by any real value so it costs nothing to give it away to players, at the same time, it costs nothing to build a temple to McDonnalds or some other ridiculous in-game gimmick because it's all just a matter of creating the models and sticking it where players will see it. Therefore the costs involved are low (not unlike banner ads and email spam). In order to successfully sway people, however, the ads need to be more interactive and offer some sort of pay-off. Maybe something as simple as sponsorship ("This quest was brought to you by Honda") would get people to stop and notice it as opposed to block it out. But tying it in with something in the real world (ie, codes under the cap, or a special label with WoW art on a box of cereal) would really drive it home. Especially now while there is relatively little competition for in-game ad-space, ad agencies can negotiate good deals for their clients and developers can make some extra money (which will probably NOT offset the monthly payments but probably be reinvested in content development and expansions).

The game producers like Blizzard are wary of these kinds of stunts because there is the risk of a backlash from the community. Regardless of whether or not the ad campaign is successful or even fun for users, there will be people who will complain loudly (probably on MMORPG.com's forums) about how it's "invasive" or "ruins the game" (as if there's much of a game to be ruined in some of these MMO...). Despite this valid concern, however, it's very likely that a good ad campaign will draw in more new and returning users than it will drive away. In the end, all the publicity will be good for both companies revenue streams.

SOE notes that since gamers don't like advertising in their games, in-game advertising would not be successful. I guess they learned that from the /pizza idea.

Yet SOE is pushing RMT in their future release "The Agency", when a majority of gamers don't want RMT in their games either.

Originally posted by xoring

@xkey: I'm not thinking about it from the perspective of "this will allow MMOs to reduce the monthly cost for users" That's just a ridiculous proposition. I'm approaching it from the perspective of "this will help the company who invests advertising dollars move product and see a substantial return on investment".

I understand what you're saying here, but I have to ask, if it's not going to do anything for the players in terms of reducing their fees,  then why should the players put up with it?  You later mention that the additional revenue from ads would allow developers to add more content, etc., but personally I really doubt it.  I think it will just drop to their bottom line.

This article is pretty timely for me because I was just thinking today -- as I stopped at my local gas station and saw that they had installed video screens on all of their gas pumps so that ads could be screamed at me while I pump my freakin gas -- that I'm so sick and tired of having advertising shoved in my face constantly.

The last place I want to see ads is in a mmorpg.  I play games in part  to get away from all of that .  Any company that is going to have in-game advertising is a company that is getting exactly zero of my dollars.  Luckily it looks like at least some CEO's get that.

There's a reason that people go to MMOs...to get away from real life, to include advertising.

Also, there is no way that any enhanced revenues to the publisher will result in a reduction in fees to the consumer.  These things do not work this way.

In game ads would work in a game that is set in either "modern" or "near-future".  Would make no sense to see a Coke ad in Orgrimmar for example.

The Matrix Online would be a game that ingame ads would work well.  Have billboards showing a coming soon to theaters flick, TV's ingame running commercials, etc.  For this game, this would actually help the immersion I would think.

For the most part, players don't want to be bothered or distracted by ads.  Put too many into a game and you will drive people away.

Originally posted by DrowNoble

In game ads would work in a game that is set in either "modern" or "near-future".  Would make no sense to see a Coke ad in Orgrimmar for example.

They can just replace healing potions with Coke and mana potions with Diet Coke.  Change the cooking skill so you make a Big Mac instead of charred wolf meat.

Even better, make Coke the Horde's beverage of choice, and Pepsi can be the Alliance's.  Finally WoW will have a real reason for the Horde and Alliance to fight!  All the NPCs in Orgrimmar can wish the player a Coketastic day!  The possibilities are endless.  Instead of raiding day after day for better equipment, you can raid day after day for real life coupons for 50 cents off a Whopper with the purchase of a large drink and fries, or other fine products.

Originally posted by xoring

An innovative and targeted Ad campaign could be very successful. The problem I see for a lot of MMOs is that it would be hard to blend the Ad into the game content. For example,  a Pepsi bottle or Nike shoes would seem very out of place in a fantasy MMO like DAoC or WoW. On the other hand, it would be relatively easy to integrate products like these, or even build a complete functional online store inside of an MMO like Second Life or Enropia Universe.

 

One technique that would be very likely to work would be a game-specific "Look under the cap" style campaign. For example: when you buy a marked bottle of Coke you get code that you can use in-game to get some random reward like limited edition items or gold or something. This might work with a game like WoW that has a large presence in main-stream society. I think WoW is popular enough with young adults who have disposable income to generate worthwhile returns for a company like Coca-Cola or Pepsi or anyone else selling a cheap, readily-available, consumable luxury item. MCDs a prime example company that could execute a campaign like this extremely effectively, especially since they now have (paid) WiFi access in many of their locations. Buy a Big Mac, get 10 gold in game. They could even sponsor a red-haired-clown race.

I like how one random post on an MMO forum shows more insight, creativity, and ingenuity than an entire team of Smedlys could come up with in a year.  Dude, don't give them ideas.