Gaming is a lucrative channel, where 3billion active gamers will spend almost $176 billion on games in 2021, a figure which is set to surpass $200 billion in 2023.
Brands and advertisers have only begun to capitalize on what gaming has to offer as a media channel, particularly on mobile, which is now larger than PC and console gaming combined.
In-Play advertising platform Admix wanted to understand what brands know about the video gaming market, their experience of in-game advertising to date, and their plans for reaching a vast – and growing – gaming audience in the future.
The firm commissioned independent creative market research agency Atomik Research to conduct an online survey of more than 400 respondents in the UK and US, with responsibility for media-buying in their company.
The survey found that around 93 percent of advertisers had seen an increase in video game advertising spend over the past 12 months. But, while the prevalence of in-game advertising may have increased, it’s still considered a grey area by many.
According to Samuel Huber, CEO and Co-founder at Admix: “Just as the desktop web was the dominant media channel for the 2000s, surpassed by social media in the 2010s, video gaming is now on the cusp of claiming the crown of key media channel. However, although buyers are broadly aware of this, the survey reveals that they appear to underestimate how close we are to it becoming a reality.”
Games advertising growth
81 percent of media buyers plan either to maintain or increase in-game advertising spend over the next 12 months, with 93 percent intending to run some form of in-game advertising by 2025.
Key drivers for growth
The rapidly developing infrastructure behind in-game advertising is driving its growth – with increases in the availability of programmatic options, third-party verification for in-game advertising performance and an increase in the availability of in-game inventory cited by advertisers as the most common reason for the category’s growth.
Barriers to adoption
However, a fifth of media buyers cited a lack of understanding as the biggest reason for not investing in in-game advertising, with 31 percent considering it a grey area.
60 percent of respondents felt consoles offered more premium video game inventory than mobile. However, a third identified casual mobile games as being premium – narrowly higher than any other in-game environment.
Advertisers realise that video gaming is a huge market – 34 percent believe gamers’ average spend is between $100- and $500billion. In fact, it’s estimated that gamers spent $165billion in 2020 – more than half of that on mobile gaming.
Media buyers drastically underestimate the scale and diversity of gaming audiences, with a perception of the typical gamer most closely matching the profile of a male console gamer. A third believe there are between 100- and 500million active daily gamers, while 27 percent think there are between 500million and 1billion. In reality, there are 3billion across the world – 2.8billion of whom play on mobile – with an even gender split.
US brands seem to be more wary than their UK counterparts. 23 percent of US buyers aren’t spending on in-game advertising due to resistance from clients, compared to just 9 percent in the UK, while 52 percent of UK media buyer’s clients are asking for in-game activity in the next 12 months compared to 33 percent in the US.
Samuel Huber added: “With over 3billion gamers generating hundreds of billion dollars in annual revenues, it’s impossible to ignore video gaming as the next key media channel. Indeed, it’s no surprise that Netflix sees Fortnite as a bigger competitor than other video on-demand platforms. But while media buyers are certainly aware of gaming’s potential as a media channel, it’s clear from the findings of this survey that they’re less certain about how to access it. Gaming is still a massive, intangible opportunity in the minds of many advertisers. Education is needed, therefore, to give them the knowledge and confidence they need to access it in a meaningful way with In-Play; and reap the rewards it represents.”
For the full findings of the survey into the potential of gaming as the next media channel, you can download the report here.