Forget the mall food court, the parking lot behind the 7-Eleven and the local bar when it comes to youth hangouts. For 40% of millennials and members of Generation Z, video games are the primary social outlet, a Deloitte study revealed. Deloitte Vice Chair Jana Arbanas explained that modern video games provide “interaction, socialization and utility and their popularity with younger generations could potentially transform the media and entertainment industry.”
While I sadly must point out that my fellow millennials and I are no longer really “younger,” those older than us are also getting in on the video game trend. AARP reports that 45% of Americans who are at least 50 years old play monthly or more often, a significant increase from the 2019 figure, and roughly 22% break out the video games on a daily basis.
The line between video games and other media is blurring, too. Sure, my generation had Pac-Man cereal and a Mortal Kombat movie better remembered for its theme song than its script, but now the Grammys have created an entire category for video game soundtracks. The “Super Mario Bros.” movie was a hit this time around and shows based on “The Last of Us” and “The Witcher” have made it onto prestige TV lists.
So, how do marketers take advantage of this growth? How do they go beyond the Pac-Man Cereal and the Ronald McDonald platform game? They do so by embracing the modern, fluid boundaries between games, ads, media and people’s lives.
In-game ads
Since video games are the primary social venue for a lot of people, one main marketing technique uses similar strategies to those companies employ when advertising in out-of-home locations like billboards and stadiums. At their simplest, in-game ads let brands’ names and logos appear in digital environments — an Obama billboard in Madden NFL 13, for example, or real restaurant chains in the Crazy Taxi setting.
Pokemon Go creator Niantic has taken in-game ads a step further with Rewarded AR. Brands can set up experiences with in-game rewards, like the huge coffee cup Circle K sponsored, which had a 76% engagement rate and 96% completion. The game company is also offering full production process management for brands’ creative assets, a feature that may become extremely important as brands attempt to engage gamers on their own level. (Last year, the Snapchat AR game was looking to attract the interest of marketers.)
Measurement is a crucial part of any advertising medium, so it’s no surprise that companies like Anzu are developing techniques for detailed and accurate ad metrics. Data points Anzu’s technology measures include whether other in-game scenery partially or completely obscures an ad, where in the virtual world it is and how much of the screen it occupies. As games and in-game marketing become more popular, other crucial factors may well reveal themselves.
Video game tie-ins
Video games based on movies have been around almost as long as video games themselves. These days, though, even studios that make entirely new movie-derived games are doing better than the version of E.T. Atari put out. A number of other companies have opted to add tie-in content to existing game franchises, capitalizing on established names and already-popular playing styles.
Apple recently went the video game route to promote “Ted Lasso,” but instead of making a separate property and trying to sell gamers on that, the company made a deal with EA Sports to include the show’s title character in its FIFA 23 game. EA and Apple avoided show branding to make the promotion feel more authentic, and it seems to have worked: the addition won this year’s Cannes Brand Experience and Activation Grand Prix.
Tie-ins don’t have to involve other forms of fiction. Coke’s League of Legends promotion capitalizes on the gameplay itself by advertising that the new flavor “tastes like experience points” and providing QR codes that let users turn their selfies into game characters, while KFC took the Ted Lasso approach to their brand mascot, Colonel Sanders, by making him playable in Street Fighter 6.
Livestreams
Just as some companies tap into influencer marketing to sell beauty or fashion products, others sponsor gaming livestreams – live video of gamers playing through titles while responding to fan comments and talking about the on-screen action. Statista estimates that livestreaming will reach $11.7 billion this year and annually grow at 10.44% through 2027. That’s been a significant audience for brands selling everything from PCs to snacks, and even brands without a direct gaming connection are starting to get in on the action.
It can be difficult to find the right streamer for the right brand, especially because the ranks of new and aspiring livestreamers are growing so fast. To address this problem, EA has patented a system of pairing sponsors with streamers, and although the platform itself is still in development, its creation indicates that the market is attracting a lot of interest.
Conclusion
Historically, video games haven’t drawn as much advertising attention as other media. Even now, only 3% to 5% of ad budgets go to gaming, largely because of myths about the medium’s brand safety, ease of use and expense, as well as the difficulty of measurement. As a result, gaming is a valuable market and one that few companies have tapped so far.
That’s starting to change. More monitoring in online communities makes games safer for brands, games have developed entry points even for those who aren’t technologically savvy, and companies such as Anzu are developing sophisticated measuring systems. Marketers have started responding: a recent survey of advertisers found that more gaming investment is in the cards for 63%.
Whether they pursue in-game ads, livestream sponsorship, tie-ins or a combination, companies are recognizing the role video games play in people’s lives–and their value as the next market.
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