Despite gaming’s immense global popularity and cultural impact, in-game advertising investment is surprisingly low, according to WARC Media’s latest Global Ad Trends report, “Gaming: Advertising’s Untapped Opportunity.”
Gaming boasts a vast global audience and is a significant cultural force, yet advertising spending within games remains minimal. WARC Media’s report, released today, highlights this discrepancy and explores the potential for growth in this area.
Alex Brownsell, Head of WARC Media, stated: “Gaming is enormous in both audience size and cultural influence. Its ecosystem is complex, spanning multiple devices and platforms. While gaming presents a prime opportunity for brands, particularly to reach younger audiences, in-game advertising spend is still low. Game publishers are working to enhance ad monetization, but we need solid evidence to prove gaming’s effectiveness as an advertising medium.”
Key Findings from WARC’s Report:
In-game Advertising Growth Remains Slow:
- Despite a global audience of 3.4 billion gamers and an industry generating $183.9 billion annually, in-game ad investment lags. Research by Newzoo shows 72% of people aged 35-54 and 46% of those over 55 play video games weekly.
- Nearly 90% of advertisers surveyed by the IAB consider gaming a brand-safe channel, thanks to improved fraud detection, context and age rating tools, and enhanced ad interactivity. However, many marketers remain cautious.
Pandemic Boost Fades:
- Interest in in-game advertising surged during the pandemic, but since 2021, the share of advertisers planning to increase spend on gaming has dropped from 72% to 52%, according to WARC’s Marketer’s Toolkit 2024 survey.
- US advertisers are projected to spend $6.7 billion on in-game ads in 2024, a 10% year-on-year increase, yet this represents only 3.7% of total US digital ad spend, per Dentsu.
Gaming Ecosystem Complexity:
- The diverse gaming ecosystem spans devices, genres, formats, and market preferences, contributing to the slow adoption of in-game ads.
- Brands can engage gaming audiences through various touchpoints like Twitch creator content, Discord user discussions, and e-sports sponsorships, rather than relying solely on in-game formats.
- Gamers are diverse: 53% play to escape daily life, while 63% enjoy gaming as a social activity, with nearly half playing on multiple devices, per Microsoft-owned Activision Blizzard Media.
Building Advertising Capabilities:
- Game publishers are working to enhance their advertising capabilities and demonstrate the effectiveness of in-game ads. While mobile app inventory is dominated by endemic gaming advertisers, larger brands primarily use in-game ads for mid- and upper-funnel goals.
Higher Attention Rates:
- Research by Dentsu, Lumen, and Activision Blizzard Media found gaming environments generate higher viewability and attention rates, offering more efficient cost. In-game rewarded video ads achieved a 100% on-screen impression rate, surpassing the 83% benchmark, with over 10,000 attentive seconds per thousand impressions.
Active Engagement:
- Gen Z spends an average of 12.2 hours per week on games, with a shift toward more active engagement. In markets like China, Hong Kong, Taiwan, and Vietnam, gaming is a social activity, and 31% of Malaysian gamers have purchased products seen in games.
Boosting Advertising Revenue:
- In-app advertising has seen significant growth, with a 26.7% year-on-year rise in average revenue per daily active user, especially in simulation, casual, and puzzle games.
- Companies like Roblox are working to increase advertising revenue, although such efforts may require support from other channels, particularly social media, to drive discovery and engagement.
Investments in Gaming Content:
- Netflix has invested $1 billion in its gaming business since its launch, with game downloads up 200% since 2022. The New York Times and platforms like LinkedIn and YouTube are also investing in gaming content to retain users.
Read More:
- A complimentary sample of WARC’s Global Ad Trends report, “Gaming: Advertising’s Untapped Opportunity,” is available. WARC Media subscribers can access the full report. A WARC podcast discussing the report’s findings will be available from August 20.
About Global Ad Trends:
- This quarterly report draws on WARC’s advertising and media intelligence dataset to provide a comprehensive view of current industry developments. It is part of WARC Media, a subscription service offering rigorous benchmarks from over 100 reputable sources, empowering media decision-makers to plan strategies with precision.
COMMENTS