Pay For Play

He shoots. He scores. The crowd goes wild as he celebrates by jumping, spinning and cartwheeling down the soccer field. For the grand finale: a knee slide.

It’s not the showboating of Real Madrid’s David Beckham. Rather, it’s the choreographed post-goal routine of a virtual forward in the latest online game from Nike Europe, aptly called Gooooooal! The real-time multiplayer game, which pits thousands of participants from around the world against each other, took home the first One Show Interactive gold Pencil last month in branded online gaming—a category added this year to recognize its “explosive growth.”

Nowadays, it seems that every marketer— from automakers such as DaimlerChrysler and BMW to packaged-goods giants like Unilever and Cadbury Schweppes—is incorporating its brands into casual, action or role-playing Web games to reach both genders across all age groups.

While still a relatively small market, advertising in and around online games is forecast to grow at a compound annual rate of 25 percent from $77 million in 2002 to $230 million by 2007, according to Deloitte Corporate Finance.

“You can invite the users into your brand universe and let them play. It’s a more subtle way of getting a message across, and if the game rocks, it’ll create positive associations around the brand,” says Lars Bastolm, creative director at Framfab, the Copenhagen, Denmark, interactive shop responsible for the Nike game.

The reasons for advertisers’ growing love affair with games are so frequently cited, they’re fast becoming trite. Marketers are looking for alternative ways to target consumers, whose media-consumption patterns are less and less predictable and who are armed with TiVo-type devices that let them avoid commercials. Electronic games are seemingly one sure-fire way to do that, since, according to a study by Framingham, Mass.-based research firm IDC, they’re capturing a larger share of consumer time at the expense of traditional media.

“If you’re looking at in-game advertising, you’re effectively looking at an engaged consumer,” says Paul Jackson, a Forrester Research senior analyst based in Amsterdam. “And if the game’s successful and your brand within it is successful, you can do very well.”

“An advertiser should theoretically be agnostic to the distribution mechanism,” adds Scott Singer, managing partner and head of media and entertainment at New York-based Deloitte. “Advertising has found that video and audio together make a more compelling impression for the consumer, and so, obviously, that’s why TV has the largest percentage of advertising. But if you can plant content or a message into a game itself, there is a significant potential revenue opportunity.”

New vs. established games

Some marketers connect their brands to an existing game, while others custom-publish their own. The former is akin to product placement in movies or television shows, while the latter is comparable to creating a TV commercial.

When Cadbury launched 7-Up sister product dnL last year, it leveraged age-old board games Checkers and Reversi, branding the gaming pieces on the AOL Instant Messenger gaming platform, which is wildly popular among the soda’s target, 12- to 14-year-olds.

“As opposed to re-creating the wheel, there are hundreds of titles out there that have very dedicated, very loyal players in large numbers,” says Sam Huxley, chief strategic officer at Bounce Interactive Gaming, a 2-month-old in-game advertising enterprise majority-owned by WPP Group’s Young & Rubicam in New York. “It makes sense to tap into existing communities that already have favorable reaction to the title.”

For a well-established brand, however, an original game can further solidify its position among the fan base. Nike Europe, for instance, has amassed a worldwide player base for the soccer games it has launched in each of the past three years: Skorpion K.O. in 2002, Magia in 2003 and this year’s Gooooooal!

“What you see is these companies will start to build a consumer base looking for their next game,” notes Dave Madden, evp of sales, marketing and business development at WildTangent, a Redmond, Wash.-based game developer that has worked with Nike and Sony, among others. “You have a way to engage your consumers, teach them about your brand, get them excited about your products, yet without them feeling like, ‘I have to figure out how to get away from this ad.’ And because a lot of [games] are tied to tournaments and leader boards, and are competitive in nature, they become very viral.”

Consumer acceptance

For all the companies jumping on the in-game branding bandwagon, the trend still begs the question: Why would consumers who are already barraged with marketing messages choose a sponsored game over a generic one? Game developers contend that consumers get higher-quality content when it’s paid for or advertiser supported.

“You can find 300 free versions of solitaire—they are relatively easy to do, and the programmers who can do them are a dime a dozen,” says Garry Kitchen, president and CEO at Hackensack, N.J.-based Skyworks Technologies, which has created games for BMW and PepsiCo. “Hopefully, what we’re delivering to our clients is a more exciting experience. Our games are much more sophisticated than many of the simple, free games that are online, and are specifically targeted to the brand’s demographics.”

Finding the right context for a brand, as with any product placement, also goes a long way toward player acceptance. A soda marketer has a natural presence within a virtual basketball game, whereas in a futuristic or fantasy game, it would come across as forced. “We’re not going to do product placement where consumers feel that they’re being interrupted,” says Chip York, senior manager at Coca-Cola Entertainment Marketing. “We don’t want to put anyone off. What we’ve seen in our research is that if you brand it too much, you step over the line and there’s a backlash. Frodo in Lord of the Rings game isn’t going to take a break and have a Coke in the middle of fighting.”

This spring, the Atlanta-based marketer sponsored Live the Madness, an arcade-style basketball game designed for the NCAA men’s tournament on Branding was incorporated into the center-court logo, the scoreboard and signage. Twice during the game, Coke cans floated above the floor; if a player ran over them, the soda would help his performance, allowing him to slam-dunk or run faster.

“It’s mirroring the real world, in that you expect to see advertising on basketball courts,” says Forrester’s Jackson. “But because consumers are more actively involved in the game, they are more likely to see that brand and interact with that brand in the context of the game. You don’t know if people are looking at the TV when your logo flashes by.”

Though Coke is still compiling figures, York reports that players averaged 35 minutes with the game, which boosted purchase intent and brand health metrics. Research also found that the month-long effort, which was aimed at an 18- to 24-year-old audience, resonated best with 16- and 17-year-old boys.

In general, a well-executed game will see anywhere from half a million to well over 1 million unique players over a three- to six- month period, according to WildTangent’s Madden. Players spend anywhere from 10 minutes to an hour or more with the game, he says.

“If you look at the share of time certain targets are spending with this, it behooves marketers to consider it,” says Huxley. “That’s time [consumers are] spending where we’re not talking to them.”

Everyone’s playing

It’s no surprise that online games appeal to young men. After all, some studies have found that videogames are the fourth most popular entertainment medium—behind TV, radio and the Internet—for the elusive 18- to 34-year-old male demographic. And if you consider games as part of the Internet, the category is likely higher than fourth, Huxley notes. But the perception that an online gamer is typified by a lone young male adult in front of his PC is false.

According to IDC, nearly 60 percent of Americans regularly play games on one platform or another. A recent survey conducted for America Online by OpinionPlace, a research site operated by Digital Marketing Service, found that women over 40 spend the most hours per week playing online games, beating out both men and teens. This female age group logs about 9.1 hours with online games, or 41 percent of their weekly time on the Web. Their male counterparts spend 6.1 hours doing likewise, or 26 percent of their weekly total.

Research has found that men tend to play casino, arcade and sports games for the competition factor, while women derive enjoyment and stress relief from strategy, puzzle and word games. For instance, women made up nearly three-quarters of participants in a Vanilla Coke murder-mystery game a year ago.

Many online games lure kids, as well. In April, about 608,000 visitors to Kraft Entertainment were 2- to 11-year-olds, nearly 17 percent of the 3.6 million total, according to Nielsen/NetRatings. Teens made up about 23 percent of visitors to the company’s gaming network, which includes NabiscoWorld and Candystand.

Such statistics have advocacy groups like the Center for Digital Democracy calling for a Federal Trade Commission investigation into digital marketing’s effect on kids. Marketers argue that they adhere to the Children’s Online Privacy Protection Act of 1998 and that those who don’t are forced into compliance by the Children’s Advertising Review Unit. CARU, an investigative arm of the Council of Better Business Bureaus, recently worked with Interstate Bakeries Corp. to modify, which previously allowed kids to enter identifying information without parental consent.

“We’re very sensitive and very concerned about that. Our sites never take any data or information from those 13 and under,” says Kitchen of Skyworks, which created Candystand in 1997. “Most of our games played online are actually played by those over 18, even on the sites that may appear to be more kid-oriented.”

Indeed, according to Nielsen/NetRatings, almost a million 35- to 49-year-olds visited Kraft Entertainment in April, the largest subset of any group of visitors.

‘Hero’ brands

Kitchen draws a distinction between brands that can be the “hero” of a game and the more mundane products. “If someone comes to us and they make vacuum cleaners and they want to have a vacuum cleaner in a game, it’s a little more challenging,” he says. “But for automotive, to put a BMW in a game is a no-brainer—it’s exciting and fun to drive the car. With product categories that could be the hero in the game, you’re going to see those categories be more active.”

Automakers have certainly dominated the space by placing signage in virtual stadiums and cars in Nascar-like competitions. DaimlerChrysler, for one, recently launched Go 4×4 Trail Challenge, a game designed to teach owners and prospects how to maneuver safely through challenging environments such as deep water, snow and sand.

“It allows the customer to experience the product in such a way that it gives you [a taste of the] driving experience without being behind the wheel,” says Chuck Russo, vp and managing director at Omnicom Group’s Organic in Detroit, which oversees DaimlerChrysler’s interactive account.

For brands that may not be the hero, a popular option is to advertise on hot gaming sites such as Yahoo! Games, EA Online, and (The top 10 online gaming sites reached 47 million people in April, about a third of the Internet population, according to Nielsen/NetRatings.)

AOL runs large-format, audio- and video-enabled advertising from clients such as DreamWorks and 20th Century Fox as games are loading. “It’s not perceived as interruptive, because people are waiting to play the game,” claims Matthew Bromberg, general manager at AOL Games, a unit of the Dulles, Va.-based Time Warner Internet arm.

Online vs. console games

Advertisers have seized on the popularity of console and PC-based videogames, a market that surpassed movie-ticket box-office sales worldwide in 2002. Product placement in these games is expected to rise at a 35 percent compound annual growth rate from $10 million two years ago to $45 million in 2007, according to Deloitte.

Still, some argue that online games hold distinct advantages over retail titles, especially since the production quality now rivals that of retail games. And development time for online games is significantly shorter than the approximately two years it can take to design a console game. “Because console games take a long time to develop, there’s not that much flexibility, so you have to be in early,” says Madden. “[An online game] can be a living, breathing application that can be updated in real time.”

An an estimated cost of a few thousand dollars for a simple Flash product up to a half-million dollars, an online game is also a bargain compared with the rates that some popular console games command for product-placement deals. But perhaps the biggest plus for marketers is the ability to track and measure consumer interaction with online games and, in some cases, to follow them through the purchase funnel.

Last year, for example, the General Motors-sponsored game Hit the Pros on attracted 970,000 people, who played for an average of 22 minutes each. From its dozens of games, DaimlerChrysler has created a database that’s millions strong, says Julie Roehm, director of marketing communications for Chrysler, Jeep and Dodge in Auburn Hills, Mich.

As more clients become converts, however, it’s harder for any one game to stand out. “When the first two or three [online games] came out, it was fantastic,” says Forrester’s Jackson. “Now, it’s become a bit like the downloadable-screensaver phenomenon. Every brand has to have [an online game].”

Few online games are compelling, adds Framfab’s Bastholm. “There’s still got to be a unique angle to your game,” he notes, “and that’s harder than it sounds in a very cluttered marketplace where companies are fighting for the gamer’s attention.”

When done right, though, marketers can profit immensely from games.

“Games offer a significant value. They truly engage consumers on a more emotional level,” says Juan Santos, creative director at Atlanta-based Studiocom, which has created online games for Coke. “There’s a bond that’s formed between that message and the consumer. Being able to interact with the ad, being able to change what happens, you really create a connection. It’s a two-way communication.”

The bottom line for players and marketers, says WildTangent’s Madden, is that both sides benefit: “Consumers are being entertained, not marketed to. It’s the ultimate benevolent marketing platform.”