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I’ve been watching this news develop for a couple years now.  So when I read today that a major game manufacture has made a deal to distribute games with ads I wasn’t terribly surprised.

What surprised me is how long it took to come to the realization that ads in games is a highly lucrative market.

In this article I look at what some of the impacts of in-game ads could be.

According to this article in Information Week, video game maker THQ has signed a deal with Massive Inc. to distribute ads within its games.

The ads will be streaming ads, which means that if the game is connected to the web the game player could receive ads targeted at them.

To me this is an overdue move in terms of advertising.  This is because the gamers demographic has changed from what you may think. The gamers market is now the 18-35 year old with disposable income.  It’s no longer the geeky teenager who lives in his parents basement.

Today’s gamer generally has a good job with a steady income and doesn’t have a problem dropping 80 bucks for a new game.

This is because the games themselves have also evolved.  Donkey Kong is old news.  The most popular games now are MMOPG (Massively Multiplayer Online Playing Game) or MMORPG - Massive Multiplayer Online Role Playing Game. 

In either case the user generally starts the game on their PC or console but quickly connects to game servers on the web to play against others.  It is when they connect to these servers that they lose themselves for hours at a time.

That is because they truly are massive.  The universes created for the games are indeed huge and take days, weeks or even months to explore.

How does an advertiser take advantage of this

Well let me give you an example.

My brother is in his late 20’s.  He’s single and earns a really good income as a network engineer.  He has all the toys you’d expect – super fast computer, big screen TV, surround sound system and an Xbox.

When he gets home from work, the first thing he does is fire up his console game system and log into his favorite web based game.  From there he spends hours playing.  In some cases, such as on weekends, he’s been known to spend all his waking hours, from 5PM Friday until midnight Sunday in front of his TV playing the game online.

Now imagine if your ad was served to him, even in the background where he may notice it but not necessarily pay attention.  Let’s further assume that he is exposed to your ad every couple hours during his game play.

He’s just seen your ad anywhere between 20 and 25 times during the weekend.  And that’s just him.  Now multiply that by a factor of thousands, because there is literally thousands of players online at any one time.

Over that weekend, your ad could have been viewed between 25,000 and 100,000 times. Not only that but the audience is likely more receptive to the ad as they have chosen to play the game.  As long as the ad is tailored to that game (i.e. A billboard ad inside a driving/racing game) then they will be more apt to notice it than an ad they’d see on a website.

I think that’s key with this new advertising medium - that the ads have to be relevant to the game play.  And THQ says they will do this.  The article goes on to say “You don’t expect to see advertising in a Middle Earth setting,” Longano said, referring to the world created in the “Lord of the Rings” fantasy books. “It wouldn’t make any sense.”

So, as long as the ads relate to the game play, the players should be quite receptive to them.

I think the THQ deal is the first of many.  As search engines like MSN get their online advertising programs figured out, I don’t think it would be too long before you’d start to see some form of MSN ads inside Xbox games (for example).  There’s just too much potential there for Microsoft to pass up.

Of course in game ads won’t be for everyone.  At least initially.  But you can expect that large advertisers will be into them.

For example, imagine seeing a car billboard inside a racing game.  What would Ford pay to have their newest Mustang appear in a billboard (or series of billboards) as players race by in a Mustang?

Similarly, in a simulation of Times Square in New York City, why wouldn’t Coke pay for the virtual billboard on the virtual building that represents the actual building where they have their now famous billboard?

I think it’s clear that advertising in games is just one more way to reach an audience.  Especially if it fits your target demographic.  Therefore, this is one medium you may want to watch because I think by the end of 2006 or early 2007 it will take off as the next Internet advertising medium.

Rob Sullivan is a SEO Consultant and Writer for Textlinkbrokers.com