What marketers need to know about the state of game advertising now

Latest IAB Game Advertising State of Nation report and handbook highlight maturity of game advertising and how brands and think out a strategy. We find out more

Game advertising remains in the experimentation stage and requires brands to shift their thinking away from demographics and niche genre and audience thinking towards gaming as an everyday media activity to become mainstream.

That’s the view of DoubleJump business development manager and gaming industry veteran, Simon Slee, who spoke with CMO following the release of the second annual Interactive Advertising Bureau (IAB) Australia Game Advertising State of the Nation report.

The report found 62 per cent of its 80 respondents had used game advertising to date, with 30 per cent regularly considering or using it. This was up from 20 per cent a year earlier. In addition, 55 per cent have increased game advertising participation in the last year.

Game advertising is usually handled by digital media teams in agencies. While 72 per cent of report respondents buy directly from media owners, 58 per cent access through programmatic private marketplace deals. A further 44 per cent also cited buying programmatic traded inventory on open exchanges while 19 per cent had bought programmatic guaranteed deals.

Dominate formats currently are mobile game activations (68 per cent), streaming adjacent display and video (64 per cent), direct in-game product placement (64 per cent), live streaming video (62 per cent) and game influencer marketing and ambassadors.

A distinct finding this year from the IAB’s report was that brand focus has shifted to diversity of game audiences as one of the top key drivers for activations (45 per cent). Previously, getting access to hard-to-reach audiences was the main driver for investment.

The IAB’s report also indicated a slight increase in the number of agencies considering different forms of game advertising regularly when creating media plans, from 20 per cent in 2021 to 25 per cent in 2022. Against this, one-third of agencies still have gaming in their experimentation bucket (32 per cent). And about four in 10 (38 per cent) have no experience with this form of advertising, though the majority are looking to in the future. 

IAB Australia noted multiple research studies showed a continued lack of creative tailoring to suit the media environment, with only 17 per cent always tailoring the creative for gaming environments and 39 per cent rarely or never doing so. 

The rise of the metaverse has also spurred interest in gaming environments, although again it’s early days. While only 8 per cent of respondents had experience with metaverse activations or planning, a further six in 10 are hoping to experiment over the next year.

The 2022 IAB Australia Game Advertising State of the Nation report was conducted in June 2022 by the IAB Game Advertising Working Group and sought responses from 80 advertising decision makers working in agencies and brands. The report compares results from wave 1 survey conducted in August 2021.

To help with education on game advertising as well as showcase best practice, the Game Advertising Working Group has released the first IAB Australia Game Advertising Handbook. The Handbook looks at all forms of game advertising that occur in the game, around the game and away from the game. Working Group member organisations include Azerion, Digital Turbine, DoubleJump Communications, DoubleVerify, ESPN, Foxcatcher, Google, Group M, Howatson+Company, InMobi, Interplay Media, Magnite, Oracle, Samsung Ads, Twitch, Twitter, and Yahoo.

How marketers best approach game advertising

Speaking to CMO following the launch of the report and handbook, Slee summed up the state of game advertising today as still very much in its infancy compared to video or another digital media.

“I wouldn’t say brands are even ready to test and learn, they are lightly experimenting. There’s a way to go before we see a mainstream adoption in agencies,” he said.  

For example, while IAB figures showed a 55 per cent increase year-on-year in those dipping their toes into game advertising, many are simply diverting a small sliver of programmatic advertising running as part of digital media spend overall across multiple formats.

“There aren’t not many brands with a defined strategy for this space,” Slee said. “The feeling overall through the first half of 2022 is we would have expected it to accelerate a bit more than it did. But there were positive signs in terms of adoption, interest and a few formats have grown.

“What did shift was what the objectives were. Last year, it was about getting to hard-to-reach audiences; this year, it’s more about building brand awareness and top of funnel. Although I think a lot of brands losing stature and impact in other formats, such as out-of-home, has put brand awareness top of mind now. Gaming is going into that mix.”

The persistent misconceptions

One of the biggest misconceptions around gaming remains audience understanding and targeting. According to Slee, everybody is a gamer today. In the new IAB handbook, the working group outlines several ways to approach audience firstly by type of game console or device, and secondly, by frequency in the predominant mobile marketing space from ultra-casual to midcore mobile gamer.

The handbook then details six types of personas in the wider gaming spectrum as set by GlobalWebIndex: Mobile-only; casual gamer; esporter; socialiser; cloud gamer; and influencer.

Yet for Slee, the key thing to remember is gaming touches every sociodemographic view these days.

“The best thing to do therefore is not think about audience, but the environment they are operating in,” he advised. “You don’t really think about a music listener being 18-34, it’s about listening to music and what they’re doing with their attention. Gaming is the same.

“The other thing to remember is the majority of consumers do not identify as gamers. So it’s hard to target in that sense. Trying to pigeonhole them into a segment doesn’t work – gaming is a past time, like entertainment, music or movies. It’s how to put your brand into a gaming environment and activate with audiences in the same way you do with other media.”

While agreeing contextual thinking is useful, Slee also highlighted other aspects to consider. “We have moved on from perceptions of a gamer as 15-year-old boys in the basement. But not enough brands recognise grandma could be playing Candy Crush with friends on their phone,” he continued.

“She’s playing 8-14 hours a week, more than streaming TV or other forms. You have to think broadly, and stop thinking gaming is just Gen Y or Gen Z.

“It’s also important to note, in-game environments are primarily the domain of mobile gamers. Of these gamers, 50 per cent are female and usage is very casual. That’s ideal for some brands wanting to get to millennial mums, for example, or boomers. With hardcore players, it doesn’t align all that well. You have to look to other environments for them.”

The other misconception is narrowing your thinking about what genre is best suited to your brand.

“Many brands make the mistake of only aligning with sports or a particular genre. Most gamers are playing 3-5 genres simultaneously and often on different platforms – the hardcore male playing on the console in the lounge room also plays a mobile game while on the train,” Slee said. “Don’t go narrow for genre, let data guide you as you might be surprised what genres and areas of gaming respond to your brand.”

Slee said the fact Australian brands are conservative plays a part here. “But I also think they’re overthinking it,” he said.

“Don’t be too narrow, because you might cut off audiences and not get the scale you need. It depends on what a consumer’s attention is focused on at any given day or point in time. Don’t overthink positioning. Many brands test narrowly in gaming when they should be thinking more broadly.”

In, around and away from the game

Instead, the IAB handbook outlines three ways of considering game advertising: In the game; around the game; and away from the game. In the in-game environment, Slee said brand opportunities to integrate with games are an emerging area only been available in the last two years thanks largely to programmatic.

“Previously, putting a product in a game was more like product placement, like a movie, done on a global level that’s expensive and done here and there,” he explained. “Now with programmatic in-game formats, which are basically digital billboards, it’s more accessible. That has stirred up investment as result.”

As with all new digital formats, questions of whether advertising placements are secured and certified have come up. But Slee said given the programmatic advancements of recent years, the fraud and brand safety side of the picture has also accelerated very quickly.

“As a category, it’s fairly safe ­– at least as safe as digital media you are already buying,” he said. “A lot of problems have resolved themselves. With around the game and mobile environments, we have had advertising for years. They have the same certifications as digital media and programmatic, so these things are less of a concern.”

Where the challenge has existed is in measuring and understanding viewability of billboards in a 3D gaming space. It’s taken time for a standard for this, but IAB has come up with one recently.

“Previously, companies had their own measures on viewability, making it challenging to test and get apples to apples. It’s starting to standardise and it’s very much aligned to brand,” Slee said.

Arguably, the most mature and traditional mode of game advertising is with existing mobile advertising. A growth area, meanwhile, has been playable ads in that format, which IAB’s results showed were up almost 10 points year-on-year.

“Brands are starting to see how to gamify ads and develop clever ways to align their larger campaign messaging to build into a mini game. It’s relatively cheap and has lots of impact,” Slee said. “It’s been underutilised as a category.”

An example Slee pointed to was Shapes, which built a game where consumers throw Shapes to a face. This tied into the brand’s TVC, which featured people throwing boxes of Shapes. “It brought creative elements across other formats with play in an interactive way,” Slee said.

Around the game environments get less airtime in discussions, according to Slee, but include the creator economy and content marketing as well as Twitch and sponsorships. Key examples include FMCGs doing on-pack promotions, and the wealth of advertorial, ambassadorship you can do in that space.

“Brands definitely activate in that. It started with esports sponsorship – some got burnt, some have found a formula and are doing it well,” Slee said. “But it’s broader than that now and creators are celebrities in their own right. We’re working with them to go beyond Twitch shout outs and going more into a content marketing realm.”

Away from the game, Slee saw KFC as the posterchild of gaming social strategy. The QSR has developed its own social gaming channels that avoid product talk and are full of memes and gaming cultural references. More recently, KFC debuted the mythical gaming console that looked like a hoax but rode on the wind of the last next-gen gaming console launches. NRMA also built a game in Minecraft to educate and raise awareness of climate and endangered species.

Measuring success

“International case studies can show some results but we need more brands to test these things,” Slee said. “Programmatic is relatively safe; you could carve a little slice off other forms of programmatic to try [game advertising] and the data will tell you quickly how it performs. Even clickthrough rates might improve against mobile formats you buy regularly, which is fantastic. That’s a safe place to start.”

Larger activations are tricker, but Slee said one of the challenges of measurement is the wider question of how marketers demonstrate contextual, brand awareness and top of funnel impact.

“Not a lot of brands are doing brand uplift studies so behind hygiene metrics, they don’t really know how this kind of advertising pays off as they’re not testing enough on their own,” Slee admitted. “There’s some onus is on media to do this, but brands are also accountable. They don’t always have the budgets to do fund brand awareness research.”

For marketers still in the consideration phase around game advertising and wondering what to do next, Slee advised starting with the brand problem first, then working out the gaming environment and activation that best suits.

“Don’t overthink gaming. Consider it as another environment to operate in, then rely on data to test and learn,” he added. “It’s same as other forms of media – navigate based on what your brand needs.”

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