Long Read - The year gaming advertising goes mainstream 

Jason Pollock
By Jason Pollock | 12 January 2024
Photo by Javier Martínez on Unsplash.

Part three of a three part series. Part one is here. Part two is here.

Game advertising, with interest from brands reaching the “frothiest point” that some agencies can remember, is expected to break out and go more mainstream in 2024.  

Seven out of ten (72%) Australian advertisers intend to increase activity in the gaming advertising space this year, according to one estimate (2023 Game Advertising State of the Nation).

Azerion’s Georgia Woodburne says 2024 is likely to see the continuation and expansion of trends, with a growing recognition of gaming as a valuable reach channel for advertisers.  

She outlined eight key areas that she predicts advertisers will focus on this year: increased investment; audience targeting; innovative formats; brand building; gaming integrated with video; leveraging partnerships; measurement and ROI; and brand safety and trust.

“The access to diverse audiences through gaming will continue to be a key driver for advertisers. As advertisers recognise the variety of demographics and interests within gaming audiences, they will refine their targeting strategies to reach specific segments effectively,” she says. 

“Advertisers will explore and expand their use of innovative ad formats within gaming, such as playable ads, influencer marketing, shopping integrations, brand extensions, and metaverse/social gaming experiences. These formats offer unique ways to engage with audiences.” 

Woodburne said that gaming will increasingly be planned and bought in conjunction with other digital media, especially video.  

“This integration will create more holistic and cross-channel advertising strategies,” she tells AdNews.

“As advertisers seek to invest more in gaming advertising, there may be a stronger emphasis on measurement and proving ROI. Providing concrete data on the effectiveness of gaming campaigns will be essential to attract further investment.” 

Matt LawtonMatt Lawton (pictured right) of Five by Five Global, says that while new platforms like iion.io will make it easier for brands and agencies to access gaming audiences – and thus the popularity of in-game advertising will continue to rise - rather than seeing advertisers test and learn from gaming focused campaigns, the industry will start to see more long term strategic approaches to commit funds that support gaming communities on an ongoing basis.  

“The time for toes in the water has passed,” he says. 

“It doesn’t matter if you sell tools to tradies, nappies to mums and dads or cars to pensioners, they’re all playing games staring at a screen that provides opportunities to engage.” 

“Advertisers will also increasingly leverage Epic Games’ Unreal Engine to create perfectly replicated scenes that don’t require crews to film on-location. This gamified production process will bring new levels of creativity to advertising.” 

Stacia Grooby, also of Five by Five Global, says that due to gaming being essentially borderless, there will be an increased focus on how publishers and brands can strategically leverage communities and content from different regions to celebrate a global fan base, while simultaneously developing always-on community strategy and delivery for local, regional communities.  

“Each feeds into the other and will create ongoing consumer engagements that can be easily adjusted and curated according to brand needs without requiring major rescoping across multiple regions and internal/external providers,” she says. 

Not a silver bullet 

Jordan Barclay says that for all its potential, gaming advertising is currently “incredibly under-reached” relative to the market size, because of repeated misunderstanding of the market.  

“Brands come in, and focus purely on creating inauthentic and disingenuous content that feels like forced and unwanted marketing,” he says. 

“Gamers are often playing games as an escape, and this doesn’t align with their values. After the campaign, or a competitor’s campaign fails, companies leave the market.”

Jordan BarclayTo get advertisers more invested in gaming, Barclay (pictured right) says brands need to be shown the success stories, but also be educated about the reasons behind these successes and introduced to people who understand, live and breathe this market, to hopefully prevent agencies and companies from viewing it as a “silver bullet” that will automatically increase sales with no investment or understanding of the market

“By setting expectations correctly, this will help legitimise the market and its potential,” he tells AdNews.

Barclay says the issue is that traditional marketing agencies don’t understand this space, where high-quality content and authentic audience connection is king.  

“Who does [understand]? Content creation networks and media companies run and driven by people who have proven and repeated success with gaming audiences; who have developed massive communities through authentic interactions over the long-term,” he says.

“Spawnpoint Media is a network of social media talent with the likes of EYstreem and Firelight that have built brands with the pure focus of creating authentic and genuine relationships, community and content that viewers choose to watch willingly, even if it’s advertising content. To the audience, it doesn’t feel that way.” 

Brand partnerships to take centre stage 

IAB’s Gaming Advertising State of the Nation report found that of the top drivers of continuing to use and recommend game advertising, ‘being effective at brand building’ came out on top with 53% of respondents saying it was the top driver. 

The diversity of gaming audiences (51%); higher audience attention and engagement (49%, an increase from 2022); access to harder to reach audiences (45%); and better targeting and personalisation (43%, an increase from 2022) were also listed. 

No Standing’s Scott Cleaver says the collaboration between gaming platforms and brands is likely to intensify, with an emphasis on unique in-game experiences.  

“From live performances by renowned artists to exclusive digital collectables, these partnerships will create novel ways for brands to interact with consumers,” he says. 

We Are Social’s Suzie Shaw says now that the legal space within gaming has evolved, and game developers and publishers are locking down their IP, brands have no choice but to collaborate with them to bring to life in-game integrated campaigns.  

“Effective crossovers between mainstream brands and video game titles can become a remarkable source of hype for the fans, as long as these partnerships are well-constructed,” she says. 

Aaron PearceAaron Pearce (pictured right) says that brands getting into games is nothing new, but You Know Media has found that as more global partnerships happened with Fortnite, more brands were asking how to get into that game.  

“Now thanks to UEFN (Unreal Engine) more brands are doing ‘Fortnite looking’ virtual maps, and discovering if you build it, you also need to get people to it,” he tells AdNews

“As the build/dev costs lowers (e.g. out of India vs USA), you will find a trend of more locally targeted virtual maps, with brands driving to them rather than URLs.” 

Pearce said that through You Know Media’s conversations in market, brands want to see campaigns that help them create value for game communities, so more non endemic brand and gaming IP partnerships amplified in-game and around the game (through media or talent) may feature in 2024.  

“For example, this could be the creation of more gaming tournaments for a particular game popular in Esports, the creation of in real life/digital collaboration merchandise, or value given out in unique ways of certain digital currencies gamers use on the daily (e.g. Robux),” he says. 

“In 2024, we feel some brands will come into the gaming space with partnership/talent plays, and others will continue to dip their toes in with media buys to see how gamers respond to their brand/product messaging.” 

Rachel Fyfe of The Pistol says that as games become more realistic and immersive, expect to see an exponential increase in in-game advertising and branding partnerships, where brands embed ads within the gameplay itself in a non-intrusive way, such as through in-game cosmetic items as the NBA 2K series and Nike have done. 

“In-game cosmetic purchases continues to grow, so I wouldn't be surprised if rev-share models between game publishers and brands leveraging their IP as in-game cosmetic items became more and more prevalent for AAA titles throughout the next 12 months,” she says. 

Mark Murray says that the barriers to entry around games, and particularly mobile gaming, are coming down all the time and that SmartMedia Tech is already seeing more brands taking an interest in creating and owning a gaming asset for themselves as a way to create deeper engagement and brand affinity with customers.  

“This is also now going beyond the screen and into the real world as augmented reality technologies become more accessible,” he says. 

“We’ve already had notable success with brands like Jack Daniel’s in this space, and as it becomes harder to grab consumer attention on other channels more brands will find ways to gamify their experience.” 

Interactivity and immersivity on the rise 

Havas Media Network Australia’s Virginia Hyland says gaming advertising is becoming more immersive when the brand is highly relevant.  

“Brands are becoming part of the gear that is purchased or worn in the game. The focus for brands is how they introduce products or services in game that pique the interest of the gamer to then explore those brands in the online arena,” she says. 

“Gamers are highly attuned to making fast decisions and if a brand engages in an interesting way, then audiences are making fast decisions to potentially purchase in the future.” 

Shaw says advertisers that can focus on value creation and integrated storytelling in 2024 will rise above the rest

The best in-gaming advertising seamlessly integrates into the game and adds value to the gamer’s experience, rather than getting in the way of their gameplay,” she tells AdNews.  

“Advertising in gaming isn't just about selling a product but it’s about becoming a part of the community, solving gamer problems, integrating into gaming culture and conversations, supporting content creators, and much more.  

“As gaming advertising popularity increases, this will become more and more crucial for brands to seamlessly fit into native gaming environments."

Shaw also says that the transmedia approach is on the rise, with developers tapping into a range of different media to create stories around their brand comms – for example, gaming developers creating music videos, Netflix series, comic books and more. 

“This allows gamers to experience a heightened sense of immersion in the products they’re interested in - this could mean giving the characters in those ads their own social channels, allowing them to engage with the gaming community authentically, finding new and interesting ways to plug them into gaming environments, streams, in-game, etc,” she says.

Scepticism still exists in the market 

Taz PapouliasTaz Papoulias (pictured right), head of media strategy and investment at Murmur Group, says that the problem is not the audience - as gaming reaches a predominantly broad male audience aged 10-45, with female reach starting to grow – but more so the relevance of the environment and engagement. Unless it is highly relevant to the game, brand and environment - it has little cut through. 

“Relevance is obviously key with all advertising environments but more so within the gaming universe as the audience are focused at the task at hand as their mind is locked into the tactics and outcomes of the game,” he says. 

“In terms of driving extended awareness outside of typical channels, gaming works excellent for well-known brands albeit poor for those with low brand awareness as recognition does not occur in the finite time of exposure.” 

Papoulias says that while COVID drove a “huge interest” from brands globally – including Australia - spends remained the same. Murmur Group found current and potential clients keen to learn more but sceptical to dip their toe in the water due to high entry levels and a phase approach – for example, a $20k test and learn works best followed by $20k per month, he tells AdNews

“Personally, I believe the biggest opportunity is around sports-related games such as tennis, football, basketball and so on, these games tend to replicate actual tournaments and placements within the games can be replicated (think of the Australian Open and sponsorship around the court which is exposed to the viewer for the entire match),” he says. 

“In terms of in-app advertising (usually banners) click through rates remain strong but unfortunately this is usually from accidental clicks due to the real estate size and often I find turning off mobile devices improves the real engagement of an overall campaign. 

“I don’t see 2024 growing by more than 3% in gaming advertising spend but I do see the technology expanding with introduction of AI, improvements in VR and the quality of the ads as gaming engines and rendering improve each year.” 

An intersectional future  

Jaclyn Hadida

Jaclyn Hadida (pictured right) at InMobi says at a macro level, more technology and media and entertainment companies will double down on gaming in a bid to capture the future of entertainment in 2024.  

“With Microsoft’s acquisition of Activision Blizzard finally closed, we’d expect to see more M&A activity hit the gaming market – and Netflix’s success (or not) of its games arm will be a litmus test that could tempt more entertainment companies into the space,” she says. 

“When it comes to actual gaming ads, the key question for brands is how they ensure that the ad experience does not detract from their gameplay yet delivers on goals. Consequently, we’ll see more innovation and experimentation with things like experiential playable ads, interactive rich media ads and shoppable content.” 

Twitch’s Gemma Battenbough says gaming is headed towards an intersectional future, meaning it’s crossing over into different areas of pop culture.  

“Gaming is much more mainstream than people realise and gaming culture is no longer confined to existing consoles or computers, but rather we’re seeing gaming in movie theatres, on social media, sports and even in fashion,” she says. 

“This trend of intersectionality is driven by a change in fan behaviour, which according to our latest global research, reveals that the average person no longer commits to a single passion or focus area but is part of 7.6 different fan cultures. For example, someone who likes video games may not only identify as a gamer but also as a sports fan, a concert-goer and an artist.” 

Battenbough says that the Super Mario Bros film setting a record as the most successful video game adaptation ever and similar instances with HBO’s The Last of Us TV show and the Dungeons & Dragons film demonstrate gaming's power to bridge cultures and attract diverse audiences with gaming cross-pollinating into other cultures, which is in turn pulling new audiences and reducing stereotypes. 

“So why does this matter to advertisers? This is good news because it means that every brand is welcome to enter the gaming space and are actually actively encouraged to lean into the various fandoms that one person might identify with,” she tells AdNews

“This is further backed by our research which found that 61% of fans enjoy seeing brands sponsor or create content for their community, and, 62% of fans feel positive about brands that have been involved with their fandoms for extended periods of time.  

“Fans will welcome brands into their spaces if they display integrity, authenticity, and relevance in their actions—even if the brand doesn’t have a direct connection to gaming.” 

AI and NFTs and Web3, oh my! 

It isn’t just pop culture where the agencies AdNews spoke to predict the future of gaming advertising to be headed – emerging technologies such as artificial intelligence (AI) and non-fungible tokens (NFTs) were also raised as areas for increased attention and investments from gaming advertisers in 2024. 

Liam WilsonUM’s Liam Wilson (pictured right) says that generative AI will be changing the game with its ability to provide players with an experience like no other through hyper-personalisation.  

“Gamers will be able to have unscripted dynamic conversations with non-playable characters (NPCs) who are capable of developing their own storylines,” he tells AdNews

“This is the perfect opportunity for brands to engage with gamers through tailored approaches via NPCs, offering immersive and captivating experiences."

Wilson also says that Web 3.0 will also continue to revolutionise the industry by engaging players with in-game tokens enabling users to sell them on blockchain marketplaces.  

“Shrapnel is an upcoming FPS game, built on blockchain, which offers true ownership for gamers,” he says. 

“Players can freely trade NFTs on the marketplace to secure in-game benefits, enhancing their experience. This tokenisation and ownership provide more control to the player and builds a community centred around the tokens and the game itself.” 

Cleaver says that personalised advertisements and an increased focus on digital collectables are set to be the big issues for gaming advertising this year. 

“As AI technology advances, we can expect a surge in personalised advertising within games. These adverts will be tailored to the gamers' preferences, ensuring higher engagement rates and a more substantial impact,” he says. 

“NFTs and digital collectables are also becoming more prevalent as part of gaming advertising strategies. They offer a unique value proposition, blending the excitement of gaming with the lure of exclusive ownership.” 

Changing tastes and formats creating new opportunities 

IAB’s Gaming Advertising State of the Nation report found that of the game advertising formats used last year, mobile game ads; streaming adjacent display and video; and playable ads rounded out the top three, the latter rising from the 2022 research. 

Game influencer marketing and ambassadors (41%), Esports sponsorships (leagues, teams, players) (31%), shoppable formats (25%), brand extensions (on-pack, branded cross promotions) (24%) and metaverse activations (19%) were all also increased from 2022. 

Gary Fung of TotallyAwesome says a wave of consolidation and acquisitions is likely, as seen most recently with Microsoft's $69 billion acquisition of Activision Blizzard.   

“With gaming ad revenues predicted to surge in 2024, major tech giants are eyeing the long game and establishing a strong position in the fast-growing market rather than chasing quick wins with short-term boosts,” he says. 

“Collaborative gaming platforms such as Roblox which encourages creativity and collaborative forms of play will come to the fore while shooter style games which are very popular genre among Gen Z audiences will slip back.   

“Our recently completed Youth-first Digital insights 2023 research found that shooter styled games now only appeal to 16% of gamers, with most preferring Action & Adventure (35%), Puzzle Games (28%) and Strategy/Brain Games (21%) instead. We can also expect to see ongoing innovation in gaming platforms.” 

Fung says that playing video games will continue to evolve from simply offering a regular entertainment activity for young gamers to one that also provides them with social and emotional benefits.  

“According to our Youth-first Digital insights 2023 research, 35% of gamers believe that playing video games helps them de-stress and emotionally regulate themselves during gameplay, with 66% stating they want to game more because they can escape the stress and challenges of real life,” he tells AdNews

“Marketers will start to consider and develop gaming dialogues that emphasise and facilitate positive play to increase engagement among next-generation gamers."

Five by Five Global’s Matt Alchin says that gaming advertising at the moment is fighting the battle of attempting to harness the attention of gamers who, as well as Tiktok, YouTube, Netflix and similar services, have essentially every piece of entertainment media that has ever existed at their fingertips.  

“This has pushed companies to the extreme ends at either side,” he says. 

“This year has been a record year for highly immersive epic single player adventures like Baldur’s Gate 3, Final Fantasy 16,  but it also has been a year for the ‘battlepass’. A term which elicits groans from the gaming community. 

“It is essentially a pseudo subscription model designed to be layered over the top of any existing game, where you can pay for the privilege of having in-game items held over your head until you complete challenges and objectives within the game.  

“These are designed to be time-consuming, such that the game developer can boast about the playtime of the collective playerbase.” 

Giuseppe Martoriello says iion anticipates significant growth in in-game advertising, particularly audio in-game, as agencies have identified this channel as ripe for uptake.  

“While gaming was a popular topic in 2023 across indie agencies, we expect to see greater penetration across holding companies and large media groups in 2024,” he says. 

Murray says that longer video ads with gameplay and storytelling, user-generated content (UGC) and authenticity and a focus on gamer’s motivation will be three key themes to watch for in 2024. 

“Longer video ads will take centre stage, providing ample time to showcase game features and gameplay, offering a more immersive experience for viewers,” he says. 

“While video ad formats may be costlier, they offer a higher return on investment. Incorporating dramatic storytelling into these ads will tap into users' emotions and attract a wider player base.  

“The combination of engaging narratives and gameplay previews addresses the curiosity of potential players, ultimately attracting high-quality users who are more likely to contribute to revenue generation.” 

Murray says that UGC is a rising trend in mobile game ads, especially on platforms like TikTok, as content creators address their audience directly, recommending apps or showcasing gameplay.  

“UGC satisfies users' desire for authenticity, as it fosters a sense of trust and connection between players and creators,” he tells AdNews

“Companies can also leverage their player community to create cost-effective content that promotes their brand. This trend is becoming an essential tool for creating engaging and effective ads, driving user acquisition and revenue growth.” 

In 2024, he also predicts that mobile game ads will place a stronger emphasis on understanding gamers' motivations. 

“Advertisers will delve deeper into the driving forces behind players' engagement with various mobile games. By doing so, they aim to create more targeted and personalised ad experiences that resonate with users on a profound level, encouraging them to return for more,” he says. 

“Notably, self-expression through game personalisation is a key motivator, leading to the success of renovation and makeover-themed ads. It’s a simple equation - if the player is open to changing or reskinning their avatar in the game, they’re more likely to be open to transformation in other platforms like social media filters.

"Logically this also extends beyond the digital realm into real life as well.” 

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