Tech access, curiosity and balls have earned Canada’s marketers high-score bragging rights in the in-game ad world. Next up, increasing the ad-interactivity

The console wars affect all marketers. With every gaming victory, there’s the potential for mass audience casualties.

Microsoft’s Xbox and Xbox 360, Sony’s PlayStation and Nintendo’s Wii are duking it out, fuelling the continual expansion of the player universe. PC-based games, especially ad-supported free ones, are thriving. And if your idea of a hardcore console gamer is (still) a 13-year-old boy, then you didn’t notice when the Entertainment Software Association declared the average gamer to be 33 years old with a 38% chance of being female.

Wii is pushing the fun-for-the-whole-family angle to new heights. Millions of adults are playing casual games online as a way of bonding with their kids and grandkids. CEOs play online on company time. And as gaming consumes more consumers, it’s also scoring a slice of more media plans.

Conveniently, the opportunity to reach this audience via dynamic in-game advertising – in a country known for high broadband penetration – is just as real as a billboard hanging over rush-hour traffic. The three big networks that sell live campaign ads into games – Massive, IGA Worldwide and Double Fusion – have Canada in their crosshairs. In a matter of hours, a marketer can get fresh creative into the latest action, adventure, racing and sports games.

The Massive network, based in New York and now owned by Microsoft, has been selling ads through a regional office here since 2005, targeting more than 500,000 Xbox Live subscribers in Canada – and in July, those gamers spent over five million hours playing.

IGA Worldwide, also HQ’d in New York, has Toronto-based Access Marketing selling in-game ads to Canadian advertisers with a promise of 3.5 million impressions per week. And San Francisco-based Double Fusion, which is actively selling placements in Canada, reaches millions of gamers via PC, online casual games and publisher/developer partnerships.

In a CPM-driven market, sources say rates for dynamic in-game ads are competitive with other online media – banners, big boxes – but the pricing varies depending on the media mix and on how many impressions are bought. Canadian advertisers are biting, with some paying anywhere from $15,000 to $50,000 for a four-week campaign.

The majority of ad placements mirror the terrestrial world within the game. So in a stadium setting in a traditional sports title – Madden, NHL, NBA – the in-game media inventory could look pretty much like what you’d see at, say, the Rogers Centre. Until the advent of dynamic in-game advertising, most of the ads scattered around the stadium would have been static or fake, and built into the title at the point of publishing. For the gamer, Massive’s VP North America and Asia Pacific sales Jay Sampson says, dynamic advertising means an enhanced experience and realism: updated messaging from a live campaign instead of just logo treatment.

Both IGA Worldwide and Massive incorporate audio and video into the in-game advertising mix. In titles like Anarchy Online and True Crime: New York City, Massive has exposed gamers to proximity-triggered video. For the Toyota Yaris release in the U.S., Massive rolled out interactive billboards wired with an in-game ‘safe zone’ which let the player interact with a billboard and access additional content. Or, with the player approaching an in-game billboard from the right angle and proximity, a 15-second trailer for an upcoming theatre release can be triggered. In Canada, a recent Volkswagen GTI campaign used both static and video units. GM has bought up all of Massive network’s remaining video and interactive units for this year (the autoco is Massive’s biggest Canadian spender at this time).

‘As it stands right now, Canada as a country outdistances the continent of Europe in total revenue for Massive, which is phenomenal,’ says Sampson, who can handily name active contacts at various Canadian media buying agencies: MBS, Cossette, M2 Universal, OMD. ‘It’s a marketplace with strong agencies that are progressive and somewhat less encumbered with traditional ways and means. In relative terms, we’ve gone gangbusters in Canada.’

The dynamic in-game advertising scene here, while it does have limitations, is only going to get busier, says Nick Barbuto, director of interactive solutions for Cossette Media in Toronto.

‘There are some agencies and clients who are always going to look for

early-mover opportunities, like working with the in-game advertising industry,’ says Barbuto. ‘And I think you’re going to see an influx of advertisers looking for in-game opportunities simply because of the breadth and depth of the environments. It’s starting to look less like it’s all about shoot-’em-ups and more about games that you want to have some adjacencies to – racing games or open world environments like Tony Hawk. They’re conducive to ads because they mimic the out-of-home environment.

‘So if you’re producing a major out-of-home campaign for the city of Toronto, why not complement that with a virtual out-of-home campaign for Torontonians playing some of the top video games?’

Massive, which boasts over 200 campaigns for more than 100 clients globally, realized the vitality of the Canadian market early, and with Microsoft’s Xbox, Xbox 360 and PC-based games, they’ve got a lot of weight. A look at the list of Canadian advertisers tapping into their dynamic in-game ads is telling: Alliance Atlantis, Bell Sympatico, BMW, CTV, Dairy Queen, G4techTV, General Mills, General Motors, the Government of Ontario, Greyhound, HMV, HP, Microsoft, Nissan, Paramount Pictures, Rogers, Shaw Communications, Subway, Telus Mobility, Toyota, Universal Pictures, Volkswagen, Warner Brothers, Wendy’s, Wrigley and Yahoo!. The auto category is most active with Massive, followed by technology and entertainment.

When Burger King puts its characters on an Xbox game and sells 2.4 million copies in-store over five weeks – like it did last year – well, then you know gamers are ready to play with advertisers. And more Canadian advertisers are getting their game on. ‘They seem to be more open to trying it,’ says Josh Killham of Toronto-based Access Marketing. Access sells ads in Canada through the IGA Worldwide network, which includes games like Atari’s Test Drive Unlimited and Counter-Strike as well as massively multiplayer online games (MMOGs) from Acclaim. ‘It’s been a challenge. A lot of people don’t understand it. A lot of people have never played a video game before.’

Consequently, this has been a big year for research commitments by players in the gaming space hoping to sell the medium to media buyers and marketers. ‘There are lessons right now in terms of efficiency and effectiveness,’ says Killham. ‘It is new, so everybody wants to protect their dollars and see that they’re used well.’

IGA Worldwide began working with Nielsen Entertainment in June to study the effectiveness of in-game advertising in PC games, with support from publishers Electronic Arts, Activision and Omnicom Group’s Organic and PHD. The study will test significant factors of in-game ads (such as size on screen, time exposed and angles of view) among 2,000 video game consumers.

Double Fusion and L.A.-based new media research firm Interpret released a study of ad effectiveness across 10 top-selling games in July. They used dynamic and integrated in-game and around-game placements. The findings showed that 75% of gamers engage with at least one ad per minute across most game types, and less-cluttered ads were three times more effective. That month, IGA Worldwide signed a rating system deal with Interpret’s Gameasure which provides demo, reach and other engagement metrics for in-game placements.

Massive also released research with Nielsen Entertainment in August that pushed some taunting figures about the effectiveness of in-game brand advertising in Electronic Arts’ Need for Speed: Carbon on Xbox and PC platforms – including participation by M2 Universal for the Pontiac G5. The study of 600 gamers showed ad campaigns from blue-chip brands significantly improved key brand metrics. The stats claimed average brand familiarity increased by 64% from control to test groups, while the average ad recall and purchase consideration both jumped by 41%. Automakers in the category saw a 69% increase in purchase consideration among likely car buyers. For consumer packaged goods clients, the boost was 71% (63% in the key male 18-24 demo). Tech clients’ brand rating rose 70% from control to test groups.

‘Video brings advertising to life, and interactivity brings advertising to life,’ says Massive’s Sampson. ‘Over time, marketers and the smart agencies behind them will push us and the publisher/developer community for more interactivity. So you’re so proficient in NBA that you earn points that let you outfit your entire Raptors team in the latest Nike shoes. That’s kind of where it’s going, but we’re not there yet.’

But Barbuto claims dynamic in-game advertising needs more innovation to keep up with the industry as a whole. ‘There are new games coming out, and to some extent there are some new ad format functionalities being facilitated in a broader way,’ he says. ‘But I think this is a catch-up stage for agencies, advertisers and the publisher side to get up to speed with either accepting in-game advertising or increasing the functionality from the advertiser’s perspective. For now, it’s really just about making good use of the medium, making it a staple within a plan more than anything else.’

Pundits say the next stage may be developing more insights into how in-game creative can improve brand experience. For instance, interactivity in dynamic may not be best achieved with ‘click-through thinking.’ Pizza Pizza or Burger King, for example, may get in the game more effectively by offering up a cheat code through creative, rather than wishing for the chance to shout ‘ORDER HERE!’

‘With a typical console or PC-based title, they’ll play that game for 43 hours on average – for Madden ’08 or NHL ’08,’ says Sampson. ‘I’m hard-pressed to believe they’ll stop play to order the pizza. To me, the most critical thing that we avoid doing is taking the gamer out of the game and making the game unrealistic because of the level of commercialism.’

Brand integration and interactivity have been going up a few levels. Nissan got its brand on the Xbox’s Forza Motorsport 2, which was released in May, in a big way – a months-long process involving Microsoft, Omnicom Group’s OMD and the game developer, Turn 10. The marketer scored in-game billboards and a sponsored course, and put downloadable and customizable Nissan vehicles (the Sentra SE-R, Altima, and 350Z) on Xbox Live Marketplace. Xbox Live users could also participate in a Nissan-sponsored racing tournament this summer. The championship race is set to hit the L.A. Auto Show in November, where Nissan plans to judge the best virtual paint jobs in a sponsored customization contest.

Canadian gamers playing Anarchy Online are already used to running up to a billboard to trigger a 10-second Pontiac video. This summer also saw a nine-week effort for the Nissan Altima Coupe and Sentra SE-R in sports, racing and action/adventure titles, and a five-week Ontario and Quebec Toyota F1 campaign in Transformers: The Game and NBA 2K7.

With online dynamic campaigns that typically run four to six weeks, Access Marketing wrapped up English-language placements for Wendy’s on the IGA Worldwide network. For Bell Sympatico, the network’s racing vertical was a good choice for placing a running beaver (you know which one) in the many passing billboards – arranged by Cossette’s Montreal office. ‘It’s a French campaign, and a lot of traffic comes from Quebec, which showcases how flexible it is with a dynamic deal,’ says Killham. ‘Specifically in TrackMania Nations, you get all sorts of good angles where you can see the ads, and it’s relevant content. The whole campaign is about getting a higher-speed connection, and for gamers, that’s what you need.’

Other marketers, such as Pizza Pizza, are still getting in on static ads built into the games at publication. Despite the inability to geo-target, Killham says Pizza Pizza’s deal to get ads into Electronic Arts’ upcoming Burnout Paradise should pay off in Canada and beyond: the game’s last installment sold over a million copies, with about a quarter of that in Canada. ‘The lead time on the static isn’t too bad,’ says Killham. The publisher assigns media units in the game, Access lines up creative in different sizes, and the title launches. ‘That’s basically a few months,’ he says. ‘But for dynamic, we can have a piece of creative in the morning and have it running on the network in the afternoon.’

Turn-around time aside, Barbuto says static in-game ad deals don’t offer the targeting or convenience of dynamic. ‘We go in under the context of supporting a message for a month or two, and it would be very difficult to make a message, other than a brand message, live within a static environment,’ says Barbuto. ‘Just having the Nike swoosh in there is one thing, but featuring the latest and greatest Shock shoe is another.’

As innovation in dynamic moves forward, ad networks are announcing more deals directly with publishers and developers. One innovation that got some attention in September was Double Fusion’s launch of fusion.runtime – which will allow the industry to serve dynamic in-game ads into older video games, the classics that preceded the sophistication of today’s dynamic-ready titles. Montreal’s Ubisoft is preparing to use the tech to launch a new series of ad-supported older titles free-to-consumer via the company’s website. GameTap, Turner Broadcasting’s online destination for older games, had so far only implemented pre-roll video spots for such games.

In the expanding gaming universe, there are also increasing opportunities to reach gamers outside of in-game placements. Barbuto says advertisers can get creative in ‘reaching consumers at the console level – by making it a distribution point for content or bringing a sponsorship idea to life by sponsoring a tournament,’ says Barbuto. ‘We’re looking into using some of these hard drive-based systems as new dissemination tools for content. So when we produce content for a screen of some format, whether it’s television or a computer, we’re also looking to use things like the Xbox 360 Live Marketplace as a way to allow consumers to access that content.’

It’s a natural evolution: a merging of content and platforms. Fox is making Family Guy available on Xbox Live, while Nintendo Wii’s multi-player Big Brain Academy will get massive on-air integration with Global’s Are You Smarter Than A Canadian Fifth Grader? this month.

In this environment, the question is: does your brand have a game plan?