Advertising and Games

1. Advertising and Games Opportunities, Pitfalls, and Competition David J Edery WW Games Portfolio Planner Microsoft, Xbox Live Arcade Blog: http://www.edery.org Upcoming book: “For Fun and Profit: How Video Games are Transforming the Business World” (Not sponsored or endorsed by Microsoft)

2. Research Challenges • Avoided studies funded by the game industry • Most university studies are problematic • Focus on a single genre (i.e. racing) • Focus on static billboards • Very specific population (i.e. college students) • Small sample sizes (i.e. 10 to 50 respondents) • Small play times (i.e. one 15-minute session) • Focus on brand recall, not subconscious effects

3. Research Challenges (cont.) • Therefore, I’ve partially relied on: • More general psychology research • Research specific to film/TV product placements • Placements date back to 1940 • Research is, as a result, more prevalent and thorough • A few good, independent, game-specific studies

4. Psych 101 forAds in Games

5. Integral vs Non-Integral Ads • Ads are highly integrated (or not) with a game • Integral ads: • A car you drive (gameplay) • A camera used to solve missions (gameplay & plot) • A brand prominently featured in cutscenes (plot) • Non-integral ads: • Typical billboards alongside a road • Soda machines that aren’t part of a puzzle or plot

6. Implicit vs. Explicit Memory • Explicit memory: • Triggered by high-involvement stimuli • The result of conscious processing • Integral ads usually get stored here • Implicit memory: • Triggered by low-involvement stimuli • The things you “miss” when focused elsewhere • Non-integral ads usually get stored here • Note: gameplay is generally “high-involvement”

8. Implicit Memory • Influences our behavior w/o conscious recall • “Mere exposure effect” and “priming” • MEE: Japanese ideographs (1) • MEE: polygons displayed for imperceptible durations (2) • Priming: words associated with the elderly (3) • Leads to increased brand affinity • Mars Pathfinder spikes the sales of Mars candy (4)

9. Explicit Memory • Storage in explicit memory equals: • Conscious brand recall • Comprehension of product & brand attributes • Increased brand affinity, if ad well-implemented • The opposite, otherwise! • Examples of integral ads “done well” • Sony Ericson phone placements in Splinter Cell • E.T. and Reese’s Pieces … saved the candy (1)

10. Persuasion Knowledge • People recognize and resist persuasion (1) • Good placements aren’t seen as persuasion(2) • Except possibly outside of the game, which is OK (3) • Goldeneye and BMW Z3 … “$100m exposure”

11. Fit / Congruence • Incongruent ads increase recall and PK • Negative effects demonstrated in TV study (1) • Resist temptation to stand out in unnatural ways: • i.e. Don’t put trucks on a skii slope as “obstacles” • i.e. No ads for “current” products in distant future • i.e. Don’t fill a city with billboards for a single brand

12. What Gamers Say(Integral & Non) • 2007 study: GameSpot + Internet Ad Bureau (1) • 73% did not mind in-game advertising • 14% thought in-game ads spoil the experience • Key: this is all predicated on ad recognition • The whole point is to eliminate recognition • Study revealed confusion as to what constitutes ads

13. Mood & Other Associations • We have associational brains • I.e. happy TV & film = greater ad effectiveness (1) • Avoid sad portions of a game • i.e. Don’t put baby products in a bloody shooter • i.e. Don’t put Dasani on the side of a filthy truck • They should request “clean textured" locations only • In short, congruence alone is not enough

14. Summary: What Works When? • Integral ads (done well): • Increase brand recall • Generate positive press • Can convey useful brand/product info • Increases purchase intent, even for serious purchases • Non-integral ads (done well): • Increase brand affinity, but not recall • Can be employed cheaply and dynamically • Can’t convey complex meaning • Particularly good for impulse purchase decisions

15. Placement decision tree

16. Enough About Ads-in-Games,What About Other Things?

17. Advergame Research • Little research exists on this topic • Preference to handle tech prior to purchase (1) • Laptops, camcorders, PDAs, etc • Opportunity to outperform non-interactive ads • Increased preference w/ children & Froot Loops (2) • 65% preference over other cereals vs 35% control • Ineffective before age 7; potential ceiling effects • High brand recall rates(3) • Sadly, marred by small sample & other issues

18. Demonstrative Advergames • Exploring educational & persuasive games • Ian Bogost’sPersuasive Games • MIT and U. Wisconsin Madison’s Education Arcade • Examples: • Fiskars Prune to Win • Yoshinoya

19. SponsorshipsThe Lost Video Art? • NA spent $14.9b on sponsorships in ’07 (1) • Double-digit increases for the past several years • Greatest percentage: sports, NASCAR, etc • What happened to sponsored video content, i.e. soaps? • Classic psychology: create desire to reciprocate • Potential: old retail games, casual games, etc • Sponsored virtual currency • i.e. WildTangent + AdventureQuest

20. The Face of Games To Come?

21. The Coming WavePromogames / Burger King • 40% increase in profit for the quarter • 3.2m games sold • Many millions of hours of brand exposure • This is only the beginning! • More companies will get in • Budgets will rise as companies fight for mindshare

22. The Coming WavePromogames / Webkinz • 1m+ Webkinz sold in two years (1) • Longer visits than Facebook or MySpace (2) • Already being emulated: • $5 to $10m budget per virtual Disney property (3) • Mattel launched $59 Barbie mp3 / virtual world • Promotion? Revenue? Enhanced engagement? Expect to see a lot more of these…

23. Transmedia Content

24. Suggested Books The Psychology of Entertainment Media: Blurring the Lines Between Entertainment and Persuasion L. J. Shrum, 2004 Persuasive Games: The Expressive Power of Videogames Ian Bogost, 2007

25. Suggested Articles Experiencing Interactive Advertising beyond Rich Media: Impacts of Ad Type and Presence on Brand Effectiveness in 3DGaming Immersive Virtual Environments. Grigorovici & Constantin, Journal of Interactive Advertising, 2004 The Effectiveness of “In-Game” Advertising: Comparing College Students’ Explicit and Implicit Memory for Brand Names Yang, Roskos-Ewoldsen, Dinu & Arpan, Journal of Advertising, 2006 More than meets the eye: Investigating the hidden impact of brand placements in television magazines Matthes, Schemer & Wirth, Intl Journal of Advertising, 2007 The Effects of Playing an Advergame on Young Children’s Perceptions, Preferences, and Requests Mallinckrodt & Mizerski, Journal of Advertising, 2007