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IT'S ONE OF THE MOST hotly anticipated videogames of the fall, in a franchise that has already sold more than 4 million copies. Midnight Club: Los Angeles, from game publisher and Grand Theft Auto creator Rockstar, will have its street-racing fans zipping from one end of the sprawling City of Angels to the other in tricked-out exotic and tuner cars, all the while talking smack to each other on their T-Mobile Sidekicks.

    And another sound gamers will hear? No, not police sirens. It will be the five-tone T-Mobile jingle, which will be as much a part of game play as gunning engines and head-banger music.

    The prized integration, brokered through T-Mobile's agency Optimedia and in-game ad firm Double Fusion, is part of the exploding medium of in-game advertising, a once-experimental tactic that's now drawing blue-chip marketers like Procter & Gamble, McDonald's, Kraft Foods, Nike and General Motors Co.

    "Gaming is no longer a niche space, especially if you're targeting young men. It's one of the first places you look," says Vijay Rao, vp/director of open planning at Optimedia. "It's pure engagement with your brand for extended periods of time."

    Though in-game advertising isn't new-it goes back nearly a decade with static product placements akin to those in Hollywood's feature films-it's changing in ways that are drawing more dollars, more attention and more results.
    
    "It's been a coming-out year," says Jonathan Epstein, president and CEO of Double Fusion, an in-game ad firm. "The industry is really hitting its stride."

    He predicts an eye-popping 150 percent to 200 percent growth in 2009, while technology research firm Parks Associates, Dallas, estimates that what was a $54 million business in 2006 could hit $800 million in sales by 2012. Throw in virtual worlds, a host of casual online gaming (see sidebar on page G3), cassette and PC games, and platforms like Microsoft's Xbox 360, Nintendo's Wii and Sony's PlayStation 3, and that number could jump to $2 billion in the next five years, some studies say.

    Hollywood studios and TV networks were among the early adopters and continue to be among the most voracious clients of in-game ads, using the medium to sell everything from upcoming TV series to DVDs. Other marketers in the space include quick-service restaurants, footwear, soda, apparel, consumer packaged goods, automotive, telcom and others. They're as diverse as adidas and Charles Schwab, with integrations across sports, action adventure, racing and, increasingly, popculture titles like the multimillion-selling Guitar Hero.






    Still more categories are starting to explore the medium, including pharmaceuticals and female-targeted goods, and that will expand as game publishers release more demo-specific game titles.

    The draw? A millions-strong audience of advertiser coveted young men, 12-34 years old, who are less reachable with traditional media and more embracing of a digital lifestyle. And now, an even larger audience, as more and more game developers reach across demographic lines to snag women (think: The Sims) and both younger and older players (think: Rock Band). "We are now seeing the demand for more focused women- and children-targeted game content, which really opens up the number of advertisers interested in the gaming space," says Hendrik Volp, vp of business development for in-game ad-selling firm Jogo Media.

    The videogame business at more than $18 billion a year continues to outpace the Hollywood box office with its hardware and software sales, and, according to NPD, 72 percent of the population ages 6 to 44 played videogames last year, up from 64 percent in 2006. Young adults spend an average six hours a week gaming, according to in-game ad firm IGA Worldwide.

    "Marketers used to ask, 'Why gaming?'" says Alison Lange, director of global marketing at in-game ad firm Massive Inc. "And now they ask, 'How can this work for my brand?'"

    The in-game ad industry has evolved from static-only campaigns to include dynamic ones that can be dropped into the most popular game titles, zoned for areas of the country, times of day, switched out quickly to meet a marketer's launch plans, and splashed across heavily trafficked platforms like Microsoft's Xbox 360 and Sony's PlayStation 3. Marketers can sponsor tournaments or free game trials, weave their products into game play, or decorate the in-game environment with customized messages. Because the ads are served through a Web connection, players' exposure to and interaction with the ads is easily measured.

    "It's the most immersive medium you can work with," says Brian Bos, senior vp convergence director at Mindshare, Team Detroit, agency of record for Ford Motor Co. "A gamer's attention is very focused on the environment and the experience."

    A study published this summer by Nielsen Games and Nielsen BASES, commissioned by IGA Worldwide, found that the majority of gamers-82 percent-had no problem with in-game ads, which the research found to be exponentially more effective than messages appearing in traditional media.

    There was an average 61 percent increase in gamers' favorable opinions of products advertised in-game, and a 44 percent increase in post-game aided recall. More than 70 percent of the most vocal gamers in the study said they had a better opinion about the brand they saw during game play and that seeing them in that context made them more interested in the brand.


For more Videogame Advertising coverage:
Game On!
Bigger Playing Field
Media Plan Nitty-Gritty