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Report claims in-game advertising to increase rapidly

A growing number of companies said to be developing in-game advertisements

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With 72 percent of Americans now playing computer and video games, a growing number of companies are developing in-game advertisements and other advertising campaigns to reach this expanding audience, says ESA.

According to a new report from market research firm DFC Intelligence, advertisers spent more than $1 billion using video games to promote their products and services in North America last year, and DFC expects this amount to double by 2014. These totals include in-game advertising, which often consists of billboards or product placements within a game's storyline; around-game advertising, which involves banner and skyscraper ads around online games; and advergames, in which the entire game serves as an advertisement.

A wide variety of companies across a number of sectors use these tools as part of their marketing strategy. Automobile, film, and food and beverage companies in particular reach customers through games. Kia Motors, for example, developed a campaign to promote the launch of the Kia Soul by placing in-game and around-game advertisements on Microsoft's Xbox LIVE dashboard and in games such as Electronic Arts' NBA Live 09 and Skate 2. Film production companies may use these games to promote their films, such as Sony Pictures' release of a nine-week episodic online game to stir audience interest in "Salt" before it debuted in theatres in July 2010. Other companies, including Anheuser-Busch, Inc., Adidas and Gatorade, have also employed in-game advertisements.

The U.S. Air Force is even embracing this strategy. As the Austin American-Statesman recently reported, Austin-based agency GSD&M is currently working with the military branch to develop an advertising campaign surrounding Namco Bandai's upcoming Ace Combat: Assault Horizon title, which will involve sponsoring trailers on game websites and offering downloadable content within the game itself.

While the use of entertainment software as a marketing tool is growing, DFC analyst Michael Goodman notes that advertisers are still not using video games to their fullest potential. "Video games have reached beyond adolescent males into a mainstream entertainment medium that touches every segment of the population," Goodman said. "Despite this, advertisers continue to underutilize video games as an advertising vehicle."

The report notes that around-game advertising is likely to see the greatest growth in spending in the future, due primarily to the increasing popularity of online game play.
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