As companies progressively seek to target gamers in their natural environment, individuals in the gaming advertising world are splitting into two camps: those incorporating brands into higher-fidelity gaming experiences as well as those converting automated adtech into games via inbuilt in-game ads. In this blog we will observe both of these sides battle for marketers’ gaming budgets whilst tensions between them rise and what each of them present.

Why is that so?

In a Q&A with Digiday last month, Epic Games CEO Tim Sweeney induced a stir by criticizing in-game advertising. Sweeney’s remarks criticizing in-game advertisements, however, emerged as no surprise to many executives and industry observers; it’s a drum he’s been pounding for years. Regardless of Sweeney’s claims that he “hates advertising in games,” Fortnite is undoubtedly rife with advertisements in the form of brand integrations, the gaming equivalent of Hollywood placement of products.

That’s not to imply that Sweeney’s remarks didn’t make sense for numerous marketers in the industry.

“I wholeheartedly agree with Tim; I am nearly 99 percent aligned with everything he said,” said Brent Koning, Dentsu’s global gaming lead. “There are some challenges when it comes to in-game advertising as an industry.” To be honest, we just RFP’d all of the major in-game advertising partners, and many of those platforms are saying extremely similar things.”

Easy To Say, Hard To Implement

Although Sweeney’s points are valid, it’s difficult to argue that they favour his company’s attempts to incorporate brands into games over those of other companies. The claim that Fortnite’s brand integrations tend to be more intuitive compared to various kinds of in-game advertising disregards the more substantial barrier for entry of this type of marketing. In comparison to intrinsic in-game ads that can be placed systematically within game settings, customized branded game worlds and in-game items necessitate more planning and frequent updates to be successful. And, as effortless as these integrations are, they may not be easy to scale up — a requirement for any major advertising play. 

“If you consider the expense of creating experiences inside Roblox or Fortnite, with the goal of enticing people to that as well as preserving an ongoing experience, that’s an even bigger commitment of resources compared to providing primarily transactional advertising,” Malph Minns, managing director of the agency Strive Sponsorship, said. “So I believe there is room for both.”

Naturally sure, to the studios creating these fully realized experiences, the level of detail is a characteristic, not a flaw.

“This method, which can only succeed with thorough preparation, cooperation, and an enthusiasm to feed the player experience, encourages a gaming ecosystem in which brands improve gameplay and players engage with brands in meaningful ways,” Gamefam CEO Joe Ferencz said.

Realization

To the contrary, intrinsic in-game ad companies are well mindful that their services are not tailored to all games, and they are working diligently on making their automated ads equally seamless and organic as brand combinations in Fortnite and Roblox. If they can secure premium console inventory, especially in sports and lifestyle games where players are accustomed to seeing traditional ad formats, they may be able to offset the benefits of more complete brand experience.

“We’ve all noticed how badly in-game advertising is often executed. No one wants to be interrupted while playing a game, while no brand desires to be the cause of that disruption’, said Jonathon Troughton, CEO of in-game advertising business Frameplay. “Due to detrimental ad formats such as interstitial spaces or compensated video ads, certain individuals experience a visceral, adverse response to in-game advertising.” Additionally, there are better options for everyone, and we’re proactively teaching the industry about how significantly in-game advertising has evolved.”

Progression

The root cause of the struggle between both of these kinds of in-game advertising at this point stems from the reality that a lot of brand marketers still struggle to comprehend the distinctions — and that they are spending from a unified, often experimental gaming budget.

“Someone owns that gaming budget, and they have multi-channel responsibility, so it’s entirely up to themselves to choose how the funding is allocated across advertising, sponsorships, events, and whatever else,” Minns explained.

Conclusion

The good news lies in the fact that as marketers gain greater understanding about the space, gaming advertising budgets will likely be more and more split into multiple buckets, which includes distinct buckets for inherent in-game ads and fully immersive experiences, the two major forms of advertising directly inside game environments. 

Brands will eventually divide up the money they spend in order to reach gamers, exactly as they do for conventional sports sponsorships and Super Bowl advertisements, that might assist in reducing some of the developing friction in the world of gaming advertising. But, for the time being, additional education is required to accomplish this potential resolution.

“What businesses like Bidstack and Anzu and all those guys are doing is an advertising buy via a media agency,” Minns explained. “Your virtual world stuff, whether it’s Roblox or Fortnite or whatever else, would probably come more from a sponsorship or marketing budget, and less from core advertising.”