Bridging the gap between gaming, entertainment, and ad spend

Would you be shocked if I told you that it now costs around the same to produce an AAA game as it does a Hollywood blockbuster? Or that the global revenue made from video games is more than double the global film revenue and more than six times more than the global music revenue?

If you’re not shocked, then perhaps that’s because, in 2024, gaming seems to be everywhere.

Load up your favorite streaming service, and you’re bound to see one of many popular video games that’s been turned into a TV series. From the critically acclaimed The Last of Us and Arcane to Halo, The Witcher, Castlevania and the upcoming Far Cry adaptation, gaming has totally taken over the TV scene.

Heading to the cinema is also no different, with a huge number of upcoming blockbusters based on video game IPs – including Borderlands, Ghost of Tsushima, Gears Of War, BioShock, Horizon and even The Legend of Zelda – all of which are planned for the big screen.

It’s also likely that the device you are reading this on doubles up as a gaming machine, with PC, Mac, iPhone and Android stores packed full of games spanning every imaginable genre. In our age, gaming has become front and center of the media landscape, driving our entertainment and feeding into the cultural and societal aspects of our lives.

Netflix co-founder Reed Hastings has said on numerous occasions that his company's biggest competition doesn't come from Disney+ or any other subscription streaming service as much as it does from other consumer pastimes, notably video gaming.

So why, when we look at ad spend, does gaming lag behind all other media?

When our team is talking to brands and agencies, more often than not, we can categorize their answers into one of the following four buckets when this subject is broached:

Perception and legacy

For a long time, gaming has been seen as a medium geared toward younger audiences and niche communities, leading advertisers to undervalue games as a serious advertising space.

Other traditional entertainment mediums, such as broadcast TV, also have long-established advertising models and audiences, with many advertisers leaning towards them out of habit or a preference for the familiar.

However, with more than 3.3 billion people playing games globally (over 51 million in the UK alone), along with mobile gaming having put a gaming device in everyone's hands and with the medium continuing to shape our culture and the entertainment field, it’s becoming rarer to find someone who isn’t a gamer vs. someone who is.

Measurement and attribution

Measuring the effectiveness of in-game ads, particularly for brand awareness goals, has been more challenging when compared to methods used for traditional media. It has also been harder to directly tie in-game ad exposure to real-world purchases or actions compared to channels like search ads.

Today, you can get all the measurement and reporting capabilities you are used to from other traditional media channels within gaming, thanks to intrinsic in-game advertising, which allows brands to serve ads programmatically in non-disruptive ad placements, positioned throughout games in locations you would expect to find ads in real life, like around sports stadiums and alongside racetracks.

Measurement standards are also in place, thanks to the IAB and MRC. Many of the most popular measurement and reporting vendors also now verify and report on intrinsic in-game, including Human, Oracle Moat, and IAS. Brand lift studies are also available to help advertisers see what impact intrinsic in-game has had up and down the funnel.

Technological hurdles

For a long time, the fragmented gaming ecosystem (console, PC, mobile, etc.) made it harder for marketers to reach vast audiences efficiently. Creating effective immersive in-game ads has also traditionally required specialized knowledge that not all agencies and brands have had at their fingertips.

For a long time, in-game advertising was also only thought of as something featured within mobile games. However, intrinsic in-game advertising has turned that on its head, giving brands access to players wherever and whenever they are playing, be that on mobile, PC, or console.

These ads are also available programmatically, allowing brands to jump straight into the action, removing the high costs and resources that were typically associated with advertising to gamers, especially when you consider at one stage, one of the only viable options was for a brand to create their own game.

Disruption concerns

Some advertisers have been hesitant about the potential disruption of in-game ads on the player experience. Many have also raised concerns about ensuring that ads appear in gaming environments that are aligned with brand values.

The difference with intrinsic in-game ads is they are all about putting players first, which is one of the big reasons this ad format has become so popular in helping brands make meaningful connections with players, in many cases elevating the realism of the gameplay and enhancing the user experience.

The tide is turning

Intrinsic in-game advertising has emerged as a viable solution to help advertisers overcome all of the above concerns and challenges when getting into gaming. Also, as brands from every vertical imaginable continue to look to the format to help them connect with players, data is being gleaned to help build out best practices, as well as showcase success stories that can help educate and provide advertisers who have not yet taken the leap with confidence around this space.

As the advertising dial continues to shift, gaming continues to grow – and advertisers can better understand what the world will be like in the post-cookie era. This means we expect the gap in ad spending within gaming to begin closing.

Intrinsic in-game now offers advertisers a massive opportunity to get ahead of the curve, test and learn how to effectively reach gaming audiences. By running campaigns and then using the data to drive future efforts and stand out above their competitors on a channel, this will get them in front of their target audience in an impactful and engaging way.