By Yuki Noguchi April 27, 2006 Advertisers are hoping to make deeper inroads with consumers by incorporating marketing messages into more of the things people do online, whether gaming, shopping or even socializing. Interactive ads, ones that embed advertising in quizzes and games, made up more than $1 billion of the $12. 5 billion in online ad revenue last year and is expected to grow in the next few years, according to a report released last week by the Interactive Advertising Bureau and PricewaterhouseCoopers. The latest move in that direction came from a report that Microsoft Corp. is planning to acquire Massive Inc.
of New York next week. Massive is one of a handful of companies that specializes in placing products or advertisements in online video games, a form of interactive advertising that’s potentially more alluring to prospective consumers. Ads in games are designed to blend into the scenery, so a character might pass a billboard with an embedded ad or might walk by a bank of televisions running a video ad. Sports games in particular afford target rich opportunities for advertising stadiums in football or racing car driving games, for example, come adorned with ads. Microsoft, which declined to comment on its interactive advertising strategy or the Wall Street Journal’s report yesterday of its pending acquisition of Massive, is hardly alone in its pursuit of a more relevant and exciting ad.
Last week, Google Inc. chief executive Eric E. Schmidt talked about the company’s plans to use data about consumers’ online behavior to serve up more targeted, informative, and therefore more lucrative, advertising to its users. Yahoo Inc. chief executive Terry S.
Semel said his company also is investing in more sophisticated advertising technologies. While most online advertising revenue comes from banner ads or sponsored links that accompany search results, firms are focusing on adding more dimensions to their ads, as with games. To do so, they’re collecting detailed information about people’s habits, what they search for, what they buy online, what they talk about in e mails and create a kind of profile that includes a person’s gender, age, demographic and product preferences. Using that data, companies like Massive can then deliver timely advertisements via the Internet to appear during playing of a game. At 3 p.
m. , a gamer might not respond to a pizza ad. Three hours later, he might. “It’s a totally different paradigm shift” in advertising, said Michigan State University professor Hairong Li, who researches the subject. No longer can companies expect to make money by simply pushing advertisements such as pop ups or spam directly to a mass audience, he said.
Consumers are much likelier to respond to an advertisement that targets their specific desires at the right time, he said. “They have to be less intrusive and more subtle. You can’t put it in someone’s face,” Li said. “The equation I use is information plus entertainment plus engagement minus intrusiveness equals effectiveness. ” Massive, for example, places ads for products such as clothing, soft drinks, movies and music on multiplayer console games, whose largest audience is young men.
The three year old company says on its Web site that it delivers ads into more than 100 game titles that reach millions of gamers a week. Massive, whose smaller competitors such as Double Fusion Inc. , IGA Worldwide Inc. and Atom Entertainment Inc. also deliver online ads via gaming, did not return calls requesting comment. Users give advertising in games mixed reviews, said Francesca Reyes, editor in chief of Official Xbox Magazine, a publication for enthusiasts.
“The real world is inundated with advertising,” so if the product placement makes the game more authentic, users like it. But if it is misplaced, gamers often rebel, she said. Michael Goodman, senior analyst at Yankee Group, said a greater variety of messages will be coming to computer screens. Some marketers are also designing short infomercial style video clips that allow viewers to click on products to see a demonstration. Such clips might be two or three minutes long, he said, and might feature a product such as a car or a new electronic device.
Although it may not appeal to everyone, it’s much less invasive than a television commercial, and viewers will be able to have greater control over what they see, he said. “There’s no one form of one single magic bullet in terms of advertising,” Goodman said. There will always be a market for simpler display ads, he said, because it’s a cheaper way of reaching a mass audience. Still, companies like Microsoft are investing in interactive advertising companies because they represent a significant part of the future of the business, he said.