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Advertising and Games Opportunities, Pitfalls, and Competition David J Edery WW Games Portfolio Planner Microsoft, Xbox Live Arcade Blog:

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Presentation on theme: "Advertising and Games Opportunities, Pitfalls, and Competition David J Edery WW Games Portfolio Planner Microsoft, Xbox Live Arcade Blog:"— Presentation transcript:

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2 Advertising and Games Opportunities, Pitfalls, and Competition David J Edery WW Games Portfolio Planner Microsoft, Xbox Live Arcade Blog: Upcoming book: “For Fun and Profit: How Video Games are Transforming the Business World” (Not sponsored or endorsed by Microsoft)

3 Research Challenges Avoided studies funded by the game industry Most university studies are problematic – Focus on a single genre (i.e. racing) – Focus on static billboards – Very specific population (i.e. college students) – Small sample sizes (i.e. 10 to 50 respondents) – Small play times (i.e. one 15-minute session) – Focus on brand recall, not subconscious effects

4 Research Challenges (cont.) Therefore, I’ve partially relied on: – More general psychology research – Research specific to film/TV product placements Placements date back to 1940 Research is, as a result, more prevalent and thorough – A few good, independent, game-specific studies

5 Psych 101 for Ads in Games

6 Integral vs Non-Integral Ads Ads are highly integrated (or not) with a game Integral ads: – A car you drive (gameplay) – A camera used to solve missions (gameplay & plot) – A brand prominently featured in cutscenes (plot) Non-integral ads: – Typical billboards alongside a road – Soda machines that aren’t part of a puzzle or plot

7 Implicit vs. Explicit Memory Explicit memory: Triggered by high-involvement stimuli The result of conscious processing Integral ads usually get stored here Implicit memory: Triggered by low-involvement stimuli The things you “miss” when focused elsewhere Non-integral ads usually get stored here Note: gameplay is generally “high-involvement”

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9 Implicit Memory Influences our behavior w/o conscious recall “Mere exposure effect” and “priming” MEE: Japanese ideographs (1) MEE: polygons displayed for imperceptible durations (2) Priming: words associated with the elderly (3) Leads to increased brand affinity Mars Pathfinder spikes the sales of Mars candy (4)

10 Explicit Memory Storage in explicit memory equals: – Conscious brand recall – Comprehension of product & brand attributes – Increased brand affinity, if ad well-implemented The opposite, otherwise! Examples of integral ads “done well” – Sony Ericson phone placements in Splinter Cell – E.T. and Reese’s Pieces … saved the candy (1)

11 Persuasion Knowledge People recognize and resist persuasion (1) Good placements aren’t seen as persuasion (2) – Except possibly outside of the game, which is OK (3) – Goldeneye and BMW Z3 … “$100m exposure”

12 Fit / Congruence Incongruent ads increase recall and PK Negative effects demonstrated in TV study (1) Resist temptation to stand out in unnatural ways: – i.e. Don’t put trucks on a skii slope as “obstacles” – i.e. No ads for “current” products in distant future – i.e. Don’t fill a city with billboards for a single brand

13 What Gamers Say (Integral & Non) 2007 study: GameSpot + Internet Ad Bureau (1) 73% did not mind in-game advertising 14% thought in-game ads spoil the experience Key: this is all predicated on ad recognition – The whole point is to eliminate recognition – Study revealed confusion as to what constitutes ads

14 Mood & Other Associations We have associational brains – I.e. happy TV & film = greater ad effectiveness (1) – Avoid sad portions of a game – i.e. Don’t put baby products in a bloody shooter – i.e. Don’t put Dasani on the side of a filthy truck They should request “clean textured" locations only In short, congruence alone is not enough

15 Summary: What Works When? Integral ads (done well): – Increase brand recall – Generate positive press – Can convey useful brand/product info – Increases purchase intent, even for serious purchases Non-integral ads (done well): – Increase brand affinity, but not recall – Can be employed cheaply and dynamically – Can’t convey complex meaning – Particularly good for impulse purchase decisions

16 Placement decision tree

17 Enough About Ads-in-Games, What About Other Things?

18 Advergame Research Little research exists on this topic – Preference to handle tech prior to purchase (1) Laptops, camcorders, PDAs, etc Opportunity to outperform non-interactive ads – Increased preference w/ children & Froot Loops (2) 65% preference over other cereals vs 35% control Ineffective before age 7; potential ceiling effects – High brand recall rates (3) Sadly, marred by small sample & other issues

19 Demonstrative Advergames Exploring educational & persuasive games – Ian Bogost’s Persuasive Games – MIT and U. Wisconsin Madison’s Education Arcade Examples: – Fiskars Prune to Win – Yoshinoya

20 Sponsorships The Lost Video Art? NA spent $14.9b on sponsorships in ’07 (1) – Double-digit increases for the past several years – Greatest percentage: sports, NASCAR, etc – What happened to sponsored video content, i.e. soaps? Classic psychology: create desire to reciprocate Potential: old retail games, casual games, etc Sponsored virtual currency – i.e. WildTangent + AdventureQuest

21 The Face of Games To Come?

22 The Coming Wave Promogames / Burger King 40% increase in profit for the quarter 3.2m games sold Many millions of hours of brand exposure This is only the beginning! – More companies will get in – Budgets will rise as companies fight for mindshare

23 The Coming Wave Promogames / Webkinz 1m+ Webkinz sold in two years (1) Longer visits than Facebook or MySpace (2) Already being emulated: – $5 to $10m budget per virtual Disney property (3) – Mattel launched $59 Barbie mp3 / virtual world Promotion? Revenue? Enhanced engagement? Expect to see a lot more of these…

24 Transmedia Content

25 Suggested Books The Psychology of Entertainment Media: Blurring the Lines Between Entertainment and Persuasion L. J. Shrum, 2004 Persuasive Games: The Expressive Power of Videogames Ian Bogost, 2007

26 Suggested Articles Experiencing Interactive Advertising beyond Rich Media: Impacts of Ad Type and Presence on Brand Effectiveness in 3DGaming Immersive Virtual Environments. Grigorovici & Constantin, Journal of Interactive Advertising, 2004 The Effectiveness of “In-Game” Advertising: Comparing College Students’ Explicit and Implicit Memory for Brand Names Yang, Roskos-Ewoldsen, Dinu & Arpan, Journal of Advertising, 2006 More than meets the eye: Investigating the hidden impact of brand placements in television magazines Matthes, Schemer & Wirth, Intl Journal of Advertising, 2007 The Effects of Playing an Advergame on Young Children’s Perceptions, Preferences, and Requests Mallinckrodt & Mizerski, Journal of Advertising, 2007


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