The number of big brands now exploring more innovative ways to market their goods by embedding digital content in mobile games highlights the considerable opportunity that in-game advertising now presents for retailers, games developers and ad agencies.
Guerlain teamed up with duty-free shopping specialist Sunrise Duty-Free to create a Tetris-like WeChat game promoting its lipstick as early 2017, for example, with players trading their details to compete that helped the cosmetics manufacturer build a database of potential customers. Hermès released a mobile game called H-pitchhh inspired by the brand’s equestrian heritage in 2018, allowing players to virtually toss a horseshoe using a swipe of their iPhone.
French designer clothing firm Dior created a mobile game that involved players collecting six in-game Dior tokens in an interactive treasure hunt to launch a virtual hot air balloon and win tickets to a store opening in Shanghai. Burberry introduced an online game (B Bounce) that offered its jackets as a prize in 2019. It launched a similar venture, Ratberry, to coincide with the 2020 Year of the Rat, which enabled payers to collect gold coins and Chinese lanterns, with Ratberry stickers launched on WeChat to stimulate sales in China.
2020 also saw Gucci add more games to its smartphone app in the form of Gucci Arcade, each featuring an iconic fashion item, pattern or motif from its historical collection of luxury goods. The games do not advertise Gucci products per se, but they do entice customers onto the app to see the company’s latest collections and virtually try on its clothing.
Ad agencies and tech companies automating platforms
The focus for in-game advertising by luxury brands has so far centred on China, the single biggest market for smartphone apps in the world according to RiskIQ, which estimates the country accounts for 40% of all app spending. The surge in smartphone use and mobile gaming precipitated by the onset of the coronavirus pandemic in early 2020 has now kickstarted growth in other regions of the world, not only in other countries in the Asia Pacific but also in developed nations in Europe and the Americas. To expand the segment further, advertising agencies need to make it easier for brands to integrate their content in gaming platforms, provide engagement analytics and help the game developers set revenue goals, boost in-app purchases and track player spending.
Lots of companies are now doing just that. Last month [April 2021] saw advertising agency Adverty and in-app advertising specialist InMobi team-up to create an in-game advertising engine on InMobi Exchange. The partnership enables brands to deliver and monetise ads specifically designed to blend into game environments easily, such as electronic advertising boards in eSports arenas, banner ads between gameplay and the presentation of billboards, hoardings and posters within virtual 3D environments.[i]
Google also offers in-game advertising services through its AdMob platform, as does Anzu and Electronic Arts. Other companies now specifically targeting in-game advertising include Canada’s RapidFire, and Tokyo headquartered FreakOut Holdings, after acquiring Playwire in 2018.
The eSports advertising arena
The migration of advertising into gaming also extends to electronic sports (eSports). Nike launched its first-ever eSports ad featuring celebrity player Uzi in Greater China last October. The company’s management has indicated it will expand the same strategy to other countries as more people participate and watch eSports events in other parts of the world. Subway also explores the eSports advertising market after the fast-food franchise signed a two-year sponsorship deal with David Beckham-owned Guild Esports in March this year, a partnership that will see the Subway logo appear on Guild Esports branded content. Specialist ad agencies like Kairos Media have also emerged to bring brands and games developers together.
In its Global Esports & Live Streaming Market Report 2021, Newzoo estimates that global eSports revenues will expand 14% to be worth just over US$1bn in 2021. The global live-streaming eSports audience will hit 729m this year, estimate the company, and grow at a compound annual growth rate (CAGR) of 9.2% to draw in 920m spectators by 2024. China again will account for the largest contingent of eSports enthusiasts in 2021 (93m), followed by the US and Brazil. It will also be the largest market for live game streaming with an audience of 193m, which is the reason why so many brands are targeting the country with in-game advertising.
Though in-game advertising still accounts for just a fraction of total global ad-spend, there is a growing realisation that billions of gamers and spectators worldwide open to the idea of free or low-cost ad-supported gameplay represent a huge opportunity. And the prime target is Millennials with high disposable income levels who grew up in the era of Atari, Nintendo, Sega and PlayStation consoles. These buyers may have low engagement levels with traditional TV and print media, but the smartphone is increasingly their go-to device for all forms of digital content consumption. As long as that stays the case, the growth of the in-game advertising market looks assured.
[i] Adverty and InMobi launch in-game advertising for global brands and agencies, European Gaming, 28th April 2021