New Era of Advertisement In-Game Advertisement Market

New Era of Advertisement In-Game Advertisement Market

By Knowledge Sourcing Intelligence Thought Articles

Advertising is an indispensable pillar of marketing and an interactive approach that aids the company in efficiently communicating with its target audience.  The medium of advertisement is continuously evolving and has undergone a significant change according to the advertising trend, market trends, and customer preferences. The current trend is projected to change. Online advertising (through social media advertising and video and audio sharing sites) has gained traction due to the wide use of the internet especially by the millennials for surfing and other purposes. Similarly, in-game advertising has gained momentum in the advertisement market.

in-game advertising market

Growth in the adoption of gaming as entertainment by the consumers especially the millennials is shifting the advertisement trend towards the adoption of in-game advertisement. The in-game advertisement is the way of promotion of products and services via video games. The advancement of technology, the number of video games, and the players has increased which is one of the prime factors of driving the market growth of the in-game advertisement in the forecasted period. The popularity and increase in the demand for the games and number of the game players makes the games as the attractive platform for the advertisement and promotion of their product, service, brand or concepts. It is referred to as the monetization strategy that is adopted by the game developers to boost the revenue of the game and game developers. Advertisers pay and have their product or service featured in the video games.

Market Size of the In-Game Advertisement Market

The in-game advertisement can be integrated in to the game either by the display in the background, for instance, the commercial or billboard that displays during the time when the game loads or it can be highly integrated in the game that advertisement needs to be played or displayed to continue the game or it can be advertised during the cutscenes. The rapid growth of the technology is increasing the number of games and game players. The booming investments by the number of telecom providers in 5G technology is leading to the upsurge in the game players and in the adoption of games that require high internet requirement and this is expected to boost the market growth of in-game advertisement. The high availability of games especially due to the online multiplayer games feature is increasing the adoption of the games and the number of game players.

The games industry is also investing in the research and development and is offering various game features such as high graphic resolution, location-based games which is the prime factor of increase in the penetration of the video games among the consumers and is also propelling the in-game advertisement market. The main advantage of the in-game advertisement over the traditional is that the consumers are unlikely to multitask along with other media which playing the game, in-game platform has more opportunity that the players will pay attention to the advertisement. There are several types of in-game advertisement but the most popular and recent is the dynamic in-game advertisement that enable the advertiser to immerse into 3D game setting with the aid of virtual objects such as bus stops, billboards or posters. This is highly popular among the consumers due to its ease of planning and launch of advertisement campaign.

 Market Growth of In-Game Advertisement Market

The technological developments in the internet along with the increasing commercial use is leading to rapid growth of the internet users globally. This have initialised in the expansion of the online advertisement platform and is innovating the market by offering different variety of advertising, new business models, market levels and players. The companies are preferring in-game advertisement over the traditional method due to its several benefits such as wide application, higher return on investment and more customer engagement with brand loyalty among other factors. The consumers are widely preferring the smartphone devices over the PCs or desktops due to convenience and portability, thus the operation in the mobile platforms is expected to grow lucratively. The market is introducing new platform and formats, for instance the video marketing is increasing, the six-second ad is increasingly gaining popularity. According to the study conducted by HubSpot in 2017, 54% of people wanted to see more video content from a brand they support and are 85% more likely to purchase after viewing a product video.

The increase in the connectivity of internet along with the bandwidth is expanding the use of the dynamic in-game advertisement type that allow the game developers or the advertisers to deliver globally but they target the advertisements based on the local companies and time. For instance, Kabam develops the game which are appealing for the APAC region and the marketing strategy focuses on local partners like local or regional ad networks, agencies or publishers to strengthen the network.

Advertisement Industry

The outbreak of Covid-19 and imposition of lockdown globally had increased our dependence on the technology and the average time spent in smartphone devices, laptops increased which also led to rise in the popularity of games. In addition, the growing penetration of smartphone users due to the rising disposable income and high internet speed gave the growth opportunity for the in-game advertisement.  This was noticed in the developing regions such as the Middle East, South Korea and India where along with the rise in the internet and smartphone access, the time spent by the players especially the younger population on the smartphone and other devices also increased, this holds significant potential for the expansion of in-game advertisement. The growth in the adoption of gaming as the means of entertainment especially by the millennial player is shifting the trend from traditional advertisement to in-game promotions as the advertisement played during the games have long-lasting impression on the viewers with the rise in the brand loyalty.

Additionally, the in-game advertisement is considered cheaper than other advertisement means and have higher conversion rates giving high return on investment which acts as the key driver in propelling the adoption of in-game advertisement. The advertisement during the games is non-interrupting and allows the game players to seamlessly play their games without any disturbance. These factors are expected to foster the growth of in-game advertisement market during the forecasted period. The key players in the market are increasing their investment in research and development to develop games that focuses in specific region and meets the requirements which is anticipated to positively impact the in-game advertisement market in the forecasted period.  However, the higher preference and popularity for other forms of mediums of advertisement is hindering the growth of the market as many of the advertisers do not consider in-game advertisements as a viable advertising medium due to difficulties in measuring the effectiveness despite the availability of GamePlay Metrics and uncertainty about the viewers and long development cycle.