In-game advertising: potential for retailers and brands

by Julia Pott

Where should retailers and brands place their advertising messages? In media that consumers spend their time with. One medium that is becoming increasingly important for retailers and brands is the video game.

The market for consumer attention - and thus the reach for advertising - is highly competitive. The competition of classic media such as television, radio and newspapers against streaming portals and social media platforms has certainly not been missed by anyone. But there is another new player in the field that is rapidly becoming more important: the games industry.

Younger people in particular are spending more and more time playing video games. The Corona pandemic has given this development another big boost. Whether with game consoles, on smartphones or desktop PCs, consumers not only consume the game content itself, they are also receptive to brand messages and shopping inspiration within the gaming world.

According to Wundermann Thompson's Future Shopper Report 2022*, 62% of consumers worldwide are willing to spend money in games. Shoppers from countries such as China (82%), Thailand (80%) and India (76%) are leading the way, but the rate is also over 50% in Germany, Australia and South Africa. Almost 30% of respondents have already spent money in games. So far, most of this has been for enhanced features for the game or to equip the avatar.

But game content can also provide inspiration for other shopping products. An average of 6% of consumers surveyed, and 11% among 16 to 24-year-olds, say they are inspired to make purchases by games. A survey of more than 2,000 gamers from the United Kingdom** also confirms this: 33 % say they have discovered new brands while playing games.

According to the survey of gamers, more than half like the idea of mixing the real world of shopping with the virtual world of gaming. They would like to be able to buy physical items in games and find their brands in video games as well.

Different forms of advertising are available. Pop-up advertising banners or video inserts before, during and after the game are the simplest form. These ads can also be easily played out with dynamic advertising campaigns over certain periods of time and to certain user groups. However, they also disrupt the flow of the game and can be perceived as annoying.

It becomes more complex when the advertising message, product or brand is to be integrated into the game. This can also be achieved with classic forms of advertising, examples being perimeter advertising in the virtual FIFA soccer stadium or digital-out-of-home screens in virtual cities. Even more elegant: The advertising or brand is integrated into the action of the game and is no longer recognizable as advertising in the classic sense at all. A typical example, already familiar from the film industry, is product placement.

Red Bull, for example, already used this form of advertising at the beginning of the 2000s: The energy drink Red Bull was a power-up in the games Worms 3D and later also in Worms 4: Mayhem, with which the worm could run faster, jump higher and cause more damage. So here the supposed invigorating effect of the drink was integrated into the logic of the game.

A more recent example: Frosta, the frozen food brand, has set up its own stores in the game Grand Theft Auto in 2021. The protagonists of the game can supply themselves with energy in the Frosta supermarkets by buying food there.

Some brands go one step further and have their own games or game versions developed. Nike has partnered with the hit game Fortnite to develop the game universe Airphoria around Nike's shoe brand Air Max.  “As digital and physical worlds become more seamless across the products and experiences we offer, we’re always seeking authentic ways to deepen our connection with fans, expand access points to Nike across our digital ecosystem and inspire a love of sport and play,“ Ron Faris, General Manager of Nike Virtual Studios, explains the goal of the cooperation. Such partnerships between popular brands benefit both companies.

Walmart also went so far as to create its own Universe of Play game world on the online gaming platform Roblox. One of the 'Experiences' in the game universe: in the 'House of Style' there is a virtual changing room, a posing challenge and a cosmetics obstacle course with placed brand products.

Aldi Süd and Aldi Nord have founded their own brand ALDI Gaming, with which the discount chains are active in the gaming and e-sports scene: as a sponsor of teams and events, as a partner of gaming influencers, and with their own streaming formats on the streaming platform Twitch.

When retailers and brands engage with the gaming industry, it can be useful in other business areas as well: Perfume and cosmetics group LVMH, for example, recently announced its partnership with game developer Epic Games. According to the press release, the idea is to create new types of immersive product experiences. “Interactive games, which have developed into a full-fledged cultural phenomenon, are a perfect example. The partnership with Epic Games will accelerate our expertise in 3D tools and ecosystems, from the creation of new collections to ad campaigns and to our Maisons’ websites. We will also engage more effectively with young generations who are very much at ease with these codes and uses,” are the expectations of Toni Belloni, General Manager of the LVMH Group.

Whether it's video games, product experiences in the metaverse, or virtual showrooms, when companies take advantage of new technologies and media consumption habits, opportunities arise to attract and retain new customers. This is where retailers and brands should keep a hand on the joystick.
 

*The report is based on a Spring 2022 survey of online shoppers conducted by Censuswide on behalf of consulting agency Wundermann Thompson. It surveyed more than 31,000 participants from the UK, US, France, China, Japan, Australia, Argentina, Colombia, Spain, Brazil, Mexico, India, Germany, South Africa, United Arab Emirates, Netherlands, Thailand and Indonesia.

**The survey was conducted by Censuswide on behalf of consultancy Wundermann Thompson with over 2,000 gamers from the UK in November 2021.