Sunday, October 24, 2004

Game nation meets ad nation

Young men ditch TV; ads follow to video games

By May Wong
The Associated Press

SAN JOSE, Calif. - Roar down city streets in the upcoming "Need for Speed Underground 2" racing game and you'll see a Best Buy store amid the skyscrapers along with bright billboards hawking Cingular Wireless, Old Spice, and Burger King.

The fictional landscapes of video games are increasingly being dotted with product placements, pitching everything from athletic shoes to movies. And that's not all - advertisers will soon be able to update the ads over the Internet whenever they want, long after the games are sold.

The plugs reflect a growing business reality - video games are stealing eyeballs from movies and television, where product placement has long been a staple.

TV viewership among men aged 18 to 34 declined by about 12 percent last year while that group spent 20 percent more time on games, according to Nielsen Media Research.

Video games now attract not just hard-core gamers, but people of all ages and more women than ever. In the United States, overall sales reached $10.7 billion last year - more than movie box-office receipts - and is expected to reach nearly $16.9 billion in 2008, according to market research firm DFC Intelligence.

Revenues from game advertising worldwide are following the migration from remote control to joystick, expected to grow from $200 million a year today to $1 billion in 2008, predicted DFC's president David Cole.

"If the audience is there, the advertiser will be there," said Anthony Noto, a media entertainment and Internet analyst at Goldman Sachs.

Case in point: The marketing budget for ads in video games at DaimlerChrysler AG's Chrysler Group was zero four years ago. Now it represents more than 10 percent of the division's overall marketing budget, planting Chryslers, Jeeps and Dodge cars in more than a dozen video games while spending on television and print ads has dropped.

"When I was a kid, I used to run downstairs to watch Saturday morning cartoons, but my sons wake up and run downstairs to play video games," said Jeff Bell, a Chrysler Group vice president.

In its first experiment, the automaker invested six figures a few years ago so players of Tony Hawk's Pro Skater 2 game would have to do rail stunts over a Jeep to get points, or go through game levels decorated with Jeep billboards.

This week, Massive Inc. launched what is believed to be a first-of-its-kind video game advertising network, allowing marketers to deliver new ads into console and PC games via an online connection.

Billboards in a subway scene could feature a new movie trailer one day and the hottest new energy drink the next. Promotions could be tailored to geography, so that players in New York and California might see different versions of a car ad.

Massive's service can also track the viewing time each ad gets - a key metric that advertisers traditionally rely on in paying for television spots.

Experts: Leave politics at home
Why end Web house listings?
Queen City Rewind
Kroger contract reached
Look Who's Talking: Louise Kursmark
Those urns at the megaplex kiosk are not what you think
Work force age gaps now in play
Game nation meets ad nation
Rapid technology changes make job training tricky
Business Notes
Business agenda