Nowhere is the around gaming-vs.-in-game advertising debate more at issue than with Xbox Live, Microsoft’s digital network, which essentially serves as the user interface/media hub for 40 million subscribers. Via Xbox Live, traditional digital ads and interactive TV ads are available. And just last week, the company finally rolled out NUads, landing Toyota and Unilever as debut sponsors. With NUads, Xbox can deliver interactivity to advertisers while leveraging their TV spots—and bring a massive gamer audience. “It is the centerpiece of our [gaming ad] strategy,” says Ross Honey, general manager of Xbox Live entertainment and advertising.
Taking a spin around E3, one might wonder why a brand would even bother showing up. While the Nascar-esque passion is palpable (consider the not-inconsiderable number of gaming “journalists” dressed as Power Rangers or mushrooms from Mario Brothers), gaming remains a tricky medium. Yes, E3 featured family-friendly games such as the new Wii U Sports. But it also played host to the trailer for the shooting game Far Cry 3, whose dialogue includes the line: “You think you know what it takes to f--king kill?”
Well, actually no—and it’s a fair guess Procter & Gamble won’t know, or want to know, either. More than half the games at E3 involved people shooting people—lots and lots of people. Not to mention that E3 veterans were generally disappointed in the sequelitis infecting this year’s show.
But as important as the event is, E3 may not be the best representation of the industry, argues Jonathan Epstein, former CEO of Double Fusion. “Most of the games at E3 are rated M [for mature], but there are only, like, 50 of those games on the market,” he says.
With the growth of PC, social and mobile games, ad opportunities abound, Epstein adds. “We realized at Double Fusion that advertisers want volume and mass reach—they like big numbers,” he says. “But a 10-second exposure when you’re not sure when people are looking just wasn’t competitive.”
Plus, nobody wants to see another Fight Night Round 3 controversy. That title included a notoriously obtrusive brand integration from Burger King, including the presence of the King in a boxing ring. “That was a disaster,” confides an EA insider.
Others see great value in attracting brands to E3. “There are more opportunities out there,” says Dario Raciti, director of Ignition Factory at OMD, who met with eight clients at this year’s show. “It’s easier to be in the game than it used to be. The lead time is shorter; more games are connected.”
Raciti noted how Microsoft’s Kinect, which incorporates a motion-sensitive camera, has upped the around-game ante. Raciti’s team executed a campaign last year in which players could flash a Gatorade bottle at the Kinect camera and unlock free content.
Unlocking content appears to be the next frontier for in-game advertising. Matt Story, gaming specialist at Denuo, pointed to games like EA's Battlefield 3, which continually release 'extensions,' i.e. updates of the game that people can download well after purchasing their $60 gaming disc. "As games become almost like 'software as a service' there are great ways for brands to deliver content without directly linking to game play. There were a lot more of those talks going on behind the scenes at E3 this year."
That's where EA's Madden seems to want to focus his energies. "We're becoming a digital entertainment company, and the shift to digital is also a business model shift," he said. "Games now are a living experience, and there is a thirst for additional content. Brands can add value to that experience."
So, in fact, maybe more brands should come to E3. Raciti hopes so: “Gaming requires a very unique approach in the media space. E3 is all about meeting with the publishers, sitting down for a couple of hours and talking about next year. A lot of clients don’t know a lot about the space, and it’s a lot easier to implement big programs when you have the right people in the room.”