Luxury brands TAG Heuer, Bang & Olufsen, and Lacoste are targeting a group of people you wouldn’t expect: 18- to 34-year-olds who spend hours playing video games.
A study released recently concludes that people who view advertisements in video games have better brand recall, and in some cases are more likely to favorably change their opinion about a brand, than consumers who view television product placements.
‘‘It took a lot of convincing to persuade Bang & Olufsen that gamers are the same people who go into their stores and like playing on the plasma screens they sell,” said Arden Doss, managing director of Propaganda GEM, an entertainment marketing firm in Los Angeles.
‘Everyone — even luxury goods clients — realizes that the twentysomething male is off playing video games, not watching TV.’’
Once considered the sole territory of awkward teenagers, video games have lured an estimated 20 million young males, and with them a rapidly growing number of advertisers.
As the highly coveted group of 18- to 34-year olds spends more time with Xboxes and PlayStations than watching prime-time television, in-game advertising is expected to grow eight times to $562 million in 2009, making the nascent industry one of the fastest-growing marketing segments, said Michael Goodman, a video game analyst at Yankee Group in Boston.
Already, video game publishers have waiting lists of companies angling to promote video ads and get product placements, including in Anarchy Online, a game that takes place 30,000 years in the future and whose free version attracts 2,000 new users around the world every day.
Next year, cellphone maker Nokia is doubling to 10 the number of games in which it will advertise, and the world’s largest independent game maker, Electronic Arts, which had one game with ads in 2002, will have product placements in at least half of the 30 titles it releases next year.
Part of the reason is that video game advertising has evolved beyond a billboard ad on a screen.
Now, companies can feature dynamic commercials and intertwine their brands into the story lines of games, such as a murder victim who was about to sign a contract with fashion designer Lacoste in the ‘‘Law & Order: Justice is Served’’ game.
Meanwhile, Bang & Olufsen will showcase its high-end electronics stores along with Swiss watchmaker TAG Heuer in Tycoon City: New York, an Atari game due early next year. ‘‘Advertisers have built their business on finding ways to interrupt consumers, and that is fundamentally in conflict with how you effectively advertise in gaming,’’ explained Julie Shumaker, director of sales for Electronic Arts. ‘‘We have to think about how it flows with the game experience.’’
The growing popularity is transforming the video game landscape and making some games longer and allowing publishers to offer free versions of their games that are totally supported by advertisements. Just a few years ago, video game publishers were paying car companies like Corvette to use their brands in games. Now, the tables have turned, and brands such as Jeep are paying to be in Activision’s ‘‘American Wasteland’’ out this holiday season.
Costs for advertising in video games have grown exponentially. They can range from $5,000 to $500,000, prices that rival spots in small films, according to some agencies.
For advertisers, it’s worth it: The average gamer playing, for example, Anarchy Online is 29, male, college-educated, and spends more than 20 hours a week playing video games.
Meanwhile, prime-time TV viewership for young men declined nearly 8 percent in 2003, according to Nielsen Entertainment. The 18-to-34 male age group is an important demographic for marketers looking to build brand loyalty and grab consumers who have disposable income.
The study indicates that video games can persuade like no other media, said Michael Dowling, general manager of Nielsen Inteactive Entertainment, a market research firm that conducted the study with video game publisher Activision.
For example, people who viewed Cingular ads in a car racing video game were 1.5 times more likely to recommend the phone company brand to a friend and two times more likely to rate it very strongly, compared to a control group that saw the video game without the ad.
On the other hand, people who viewed product placements for Applebee’s in a ‘‘Seinfeld’’ TV episode were no more likely to recommend the restaurant chain or rate it strongly when compared to a control group that saw the show without the ad.
‘‘If games are supposed to be immersive, sometimes ads can work and add a sense of realism,’’ said Elliot Targum, a 28-year-old teacher in Cambridge who spends about five hours a week playing video games. Although few game publishers have introduced advertising into children’s titles, some consumer groups say it’s only a matter of time.
—Jenn Abelson / NY TIMES
www.financialexpress.com
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