Casual Biz Models No. 3 – Advergames

In a nutshell
An advertiser wholly or partially funds development of the game. In return, the advertiser’s brands, messages or products are integrated into the content.

Pioneers
The full-frontal mixing of games and consumer brands is nothing new, although it’s been subject to more hype and hope in recent years. Atari was making advergames for corporates in the early 1980s. McDonalds, Domino’s Pizza, Cheetos, and Chupa Chups are just a few of the brands to take centre-stage in full-priced retail games over the years. And the mid-1990s introduced more subtlety, with billboards on the hockey pitches and football terraces of EA Sports’ games, and Red Bull’s logo emblazoned above the futuristic racetracks of Wip3out.

But it was the coming of age of the Internet that brought advergaming to the masses. Wrigley created CandyStand, the first heavyweight in-house advergame portal in 1997 (still running today, it now includes Wii advergames in the mix). Wired defined the term advergame in 2001 to describe the waves of Flash-based games that followed; its usage says advergames are games ‘created solely to enable product placement’. By 2002, even the US military was making advergames, bankrolling America’s Army, a first-person shooter cum recruitment tool.

In detail
The difference between advertising supported games and advergames is like that between pre-show commercials and product placement in the movie. A 30-second commercial for Aston Martin is the equivalent of a banner advert or a short video ad that runs before the game loads. The same Aston Martin being driven by James Bond through Monte Carlo is more akin to an advergame.

Advergaming, then, directly employs the game itself to deliver the sponsor’s message. The delivery can be as subtle as a branded power-up in a first-person shooter or a placard on the side of a football pitch in traditional console games, or as blatant as a Flash game where you guide the advertiser’s mascot to collect company logos and dollar signs (figuratively speaking).

Subtle in-game advertising can be an additional revenue stream, but fully-branded Flash games are usually wholly funded by the sponsor. Then there are exceptions, such as Burger King’s Xbox games of 2006. These simple boxed games were sold for $3.99 and advertised the burger chain outlet throughout. It sold millions, but the reviews weren’t great, and while it was hailed as a great innovation, McDonald’s significantly more awful ‘M.C. Kids’ had already brought burgers and gamers together on home computers way back in 1991.

While advergames feature on some Web game portals, their most commercially successful manifestation is as bespoke mini-games that support new products. With the Internet all-pervasive in the lives of 18-35 year olds, mini-games can capture the attention of an audience long lost to TV and print. Accordingly, the list of youth-orientated brands who haven’t yet tried advergaming would likely be shorter today than those who have. (Even the British Heart Foundation recently released an advergame!) Advergaming is not just for the kids, either – titles like Diner Dash and Bejeweled have ‘inspired’ similar advergames sponsored by companies appropriate to the older casual demographic.

At this end of the spectrum, the aim has clearly shifted from commercially exploiting a casual game to creating an interactive advert. However ingenious and addictive, few would label these interactive commercials as fully-realised games, and accordingly the developers who create them tend to be specialists.

Advantages

• Money upfront for the developer, who is contracted on a work-for-hire basis.

• Attractive brands can bring an audience to the advergame.

• Gamers tolerate in-game ads that are appropriate to the game world (e.g. billboards in a sports arena) and don’t get in the way (e.g. a company’s icons replacing the swag in a Bejeweled clone).

• More subtle in-game advertising (such as those sporting billboards) can increase revenues for a game’s developer and/or publisher without fatally compromising alternate revenue streams.

• With simpler low-budget advergames, the same basic game framework can be reworked for different advertisers.

• Evaluating the return on investment for the advertiser is difficult (we’ve also listed this as a disadvantage).

• With true advergames, the advertiser is in charge.

• Overt commercial sponsorship reduces the consumer’s willingness to pay, which means all the money will need to come from the sponsor. (Though if the game is sufficiently high quality it can still be sold as a download or even boxed at retail, as seen with those Burger King games).

• The game will typically need its own marketing and/or distribution – such as an online ad campaign and dedicated website – except where the advertiser funding is only partial. (The latter case leaves the option of a secondary revenue stream, say ads or download sales, for a conventional portal to take a cut from).

• Few advergames have achieved a wide audience.

• Clumsy advertising alienates consumers. For many, games are a form of escapism, easily compromised by commercial intrusions the outside world.

• The advertiser will be much more interested in how their assets are portrayed than in any gameplay innovation. The game is often simply a reworking of an existing title.

• The development process is complicated by the need to get the advertiser’s approval at various stages.

• Evaluating the return on investment for the advertiser is difficult  (we’ve also listed this as an advantage!)

Future developments

Despite decades of experimentation, advergames remain on the fringes of the games industry proper, both casual and hardcore. True, Flash advergames have multiplied rampantly, but these aren’t engaging with consumers on more than a cursory level. Even the more sophisticated in-game advertising platforms seen in mainstream gaming in recent years have provoked flare-ups with gamers.

Based on these current trends, it’s unlikely well see advergaming displacing traditional advertising or Try Before You Buy downloads as the main revenue stream for leading casual game developers and publishers in the foreseeable future. Specialists meanwhile will need to focus more on creating engaging experiences where the brand actually adds value, since interactive consumers are becoming just as jaded as their offline, ad-saturated forebears.

The bottom line

In-game advertising offers an extra revenue stream for games creators, but it’s difficult to use alongside other business models, and consumers are easily scared away. In the casual space, Flash-based, heavily branded advergames and interactive marketing campaigns have proliferated, but these are competitive markets catered for by specialists.