It seems that under the latest patch, which I applied on my Xbox 360 last night, a rectangular ad now appears pre-snap above the right third of the score graphic. I've seen ads for Gillette, Microsoft's Bing search engine, and Coke Zero on the Xbox 360 version. Ripten's Chad Lakkis, who first reported on this yesterday, says he was playing on the PS3 and was inundated with pitches for Madden NFL Arcade.

The ads now seem to appear before every non-special teams snap, provided there was no other cutscene graphic preceding the play, such as ones providing biographical information or recapping your drive length and time. Instant replays and backtracks seem also to keep the ads away. But in singleplayer games when you're on defense, such graphics are less common, and you can literally see three or more ads in a row, all flacking you the same product.

Their placement do not obscure critical visual information, and they disappear when the ball is snapped, but to say they are an annoying distraction is putting it mildly. Then again, the relative lack of an uproar about this must be noted. Maybe the Madden community doesn't mind it after all.

Before testing this out last night, I hadn't played Madden in about a month. But the advertising I saw definitely came up more frequently than I remember. Secondly, I started looking for this in a version of the game that had not been updated with Dec. 10's patch. After the patch was applied, the ads came out in force. Ripten says it notices lesser ad frequency now on the PS3, but this morning it was status quo on the Xbox 360 for me.

Earlier this year, in bringing up in-game ads with EA Sports, I was politely told that the ads were consistent with the team's presentational philosophy, that you wouldn't be seeing anything in a Madden game that you wouldn't also see in a standard NFL broadcast. Fair enough. But in no way do we see pop-up advertising this conspicuous over this many plays on CBS, Fox, ESPN or NBC. I might be late to the party on noticing, but I'm pretty sure about that last point.

I've emailed EA Sports to ask if it's gotten any complaints, and also to ask if this many ads is unintentional. Being the holiday week, I've not heard back. If I do, I'll update this post.

EA In-Game Advertising Abuse: Madden Arcade Ad Flashes Before Every Madden 10 Snap [Ripten]

You are reading Kotaku's once-weekly (early this week!) journey back to yesteryear.

It is March, 1995, and Billboard declares: "Ads Begin To Pop Up In CD-ROMs, Games."

Time to talk to industry leaders. Sega first:

''It has to be appropriate for the title that it's in,'' says Steve Ackrich, Sega's director of third-party licensing.

Ackrich says the institution of an industry ratings system may help open the field of ''acceptable'' products. ''Right now we wouldn't allow Smirnoff (vodka),'' he says, ''but maybe if it were in an M (mature audiences) title, we might consider it.''

Nintendo?

Fellow market leader Nintendo has shied away from anything that smacks of in-game advertising, according to company spokeswoman Perrin Kaplan. ''We've always felt video games should be just for fun,'' Kaplan says. ''Does that mean we won't ever? No. But we're not doing it now.''

A game called ''Cool Spot,'' based on a character created in 7UP ads, did make the Nintendo cut, as well as pass the Sega test. Ads as games apparently are fine, ''as long as the game stands alone,'' Kaplan says.

Indie devs?

San Mateo, Calif.-based Digital Pictures included a plug for Nike at the end of its basketball game ''Slam City With Scottie Pippen.'' At the conclusion, the gamer is ''rewarded'' with Nike products.

People who make interactive CD-ROMs?

Creative [Multimedia]'s 1995 product lineup will include several titles with interactive ads embedded within them. ''We've put numerous restrictions on the ads,'' says Len Jordan, VP of marketing. ''There will be no more than three per title, and there can't be any direct-sell feature. They also will be completely self-selective,'' meaning users must choose to look at the ads by clicking on them.

Dare I say that in-game advertising has improved for everyone since then?

[PIC]

The Ubisoft guy who preceded them? Maybe joking.

He was talking about smashing people into urinals in next February's Splinter Cell: Conviction. He was getting big laughs when he set up one of the game's interactive interrogation scenes by saying, "You might have several moments in the game [when] it's like a choose your own adventure, but it's choose your own torture." Chuckling and guffawing from the crowd. He was showing Sam Fisher bashing a guy into a urinal and noting that there was a deodorant ad next to that urinal.

"You will see a deodorant ad," he said.

You will be bashing a bad guy into porcelain.

And you will wonder, he said — joking? — "Is that the new Degree deodorant I want to buy?"

More laughter. And his kicker: "It's going to be very effective."

Credit the man, Jeffrey Dickstein, head of digital advertising at Ubisoft, for getting a reaction from a crowd of ad buyers. They were gathered in midtown Manhattan at a Lincoln Center theater space usually used for jazz performances. This wasn't the most game-savvy crowd, though they were there to be coaxed into buying ads for placement in the video games supporting Massive's in-game ad network. The buyers didn't seem to get the Big Daddy joke. They chuckled when descriptive ESRB ratings warnings appeared on a big screen, as if they'd never seen them before.

This was the second "Upfront" hosted by Massive, an attempt at an annual event.

I've attended both and look forward to, I guess, the fifth or sixth one. In theory, they'll get really good if they follow the model of more established media.

Upfronts for TV networks sound like wondrous things. NBC shows off its fall line-up to advertisers and does everything it can to dazzle its audience of prospective advertisers. They bring their stars on the stage. Maybe Conan O'Brien or Jay Leno does a stand-up routine.

Video games? Not quite there with the upfront yet. We're past the awkward first one from last December, when an Activision representative stood up at this press-invited event and blabbed the existence of Modern Warfare 2 and a new hands-free Tony Hawk.

At the second one, held earlier this month, the messaging was more disciplined. Straight-laced, you could say. As in when Dave Anderson, head of business development at Activision, talked about ad placement opportunities in Guitar Hero, described how new ad-showcasing camera angles were introduced into this year's DJ Hero, and mentioned something we may not have mentioned here on Kotaku yet, that Tony Hawk Ride is primarily targeted at 10-14 year-old boys. He also said that "I've wanted to be here since I was a small boy," assumedly referring to the jazz hall at Lincoln Center we were in, which was opened five years ago. Joking?

The Take Two people were the most entertaining. They threw free t-shirts to the seated ad folks. They aired a mock ESPN segment that showcased ad placement opportunities in the virtual arenas and fields of 2K Sports' hockey, basketball and baseball franchises. Their segment ended with the BioShock joke, which went over the heads of most of the people there.

The Massive folks, affected as they may be by some department cuts this year, can still cite some strong numbers. They've served 1000 ad campaigns in the last year and a half, an executive announced at the presentation. Massive research indicates that 63% of gamers recall the ads they've seen in games, a number Massive says is on the rise. People see in-game ads, and they send text messages the numbers the ads encourage them to. They visit product websites. They buy cars.

Massive is selling packages to these ad buyers. Advertise in the biggest games that third-party publishers have allowed to be in the Massive in-game-ad network. Or just advertise in the sports ones. Or be the only advertiser in an entire genre category. Or take over the entire Massive network for a day.

The Massive people and the game publisher people mostly say things that wouldn't horrify gamers. Even at a conference like this, in-game advertising doesn't sound like the mood-killer gamers have been wry that it could become.

The THQ exec talks about putting ads on the mat of a virtual UFC ring. The Blizzard person talks about keeping ads out of that company's games, relegating them to surrounding websites, log-in pages and the like.

Our Ubisoft man explains how the Splinter Cell team has generated heat maps to determine where players look in a level, and ensured that ad-placement locations are situated in those lines of sight — which might sound potentially irritating, but he's the one talking about making advertising in games as innovative as gameplay. And he's the one talking about selling deodorant to players as they make a bad guy tumble into a urinal.

Or was that part a joke?

A team of U.S. and European researchers found that, even though players spent less time looking at them, ads associated with violence were more memorable than ones not. The test subjects played a racing game (named AdRacer, pictured above) in which the goal was to run over targets on a road course. Ads were displayed as billboards on the roadside. When the targets became pedestrians, running over them spattered blood all over the screen.

Now, the utility of this memory association has its own costs. Namely, what happens to a Dr. Scholl's or a Betty Crocker when they're the hit ad in Manhunt 5. Certainly an advertiser could expect some controversy if not only their brand was associated with a nasty-violent game, but was deliberately (warning: corporate word alert) leveraging the violence for extra (incoming buzzword alert) mindshare.

An Advert for In-Game Violence [MIT Technology Review via Game Politics]

In-game advertising gets ridiculous with the introduction of Smooth Jarvis, whose "Double Pits to Chesty" special move mimics the actions involved in applying AXE brand deodorant products. Players who use PAIN's in-game video function to capture Jarvis combining the Double Pits move together with other pain moves between September 1st and 30th can enter to win fabulous prizes, like a 42" Sony HDTV, or a custom Smooth Jarvis action figure. Yay.

If you were going to be outraged over in-game advertising, now would be a good time.

PlayStation and AXE Introduce "Smooth Jarvis" and New Moves in PAIN [PlayStation Blog]

Then boothman Tom Hammond pipes up, informing us that this broadcast is sponsored by, of course, Snickers, and to "play like a CHOMPION." And as a final reminder at the coin toss, Snickers tells us "CHEWS WISELY."

All of this follows a Snickers ad on the loading screen. For sports fans who like stats, that's four direct advertising messages, three of them puns, before you even snap the ball.

To be fair, the rest of the Madden game experience is not as cluttered with advertising as this kind of run-up would make you expect. Sprint sponsors your drive summary, Burger King has some kind of "Quickies" popup triggered by certain plays. I'm not sure what bothered me about the Snickers ads. I'm vaguely feeling that it's Hammond's stone-handed delivery, and the fact I still haven't accepted him yet as the voice of a franchise helmed by such Sunday and Monday mainstays as Pat Summerall, Al Michaels and John Madden himself.

But this does make me wonder how much advertising is too much, and if, in a genre already blessed with gamers who equate advertising to realism, someone's going to end up killing the golden goose. Not anytime soon, of course. But Electronic Arts and 2K Sports are paying zillions in licensing, their production budgets aren't getting much smaller, and they're selling titles at a pretty hard $59.99 price point that was fixed three years ago, in better times.

In-game advertising might overall be a novelty that isn't likely to take off in a crap economy. But in sports, it represents a quasi-network sports buy for certain brands, at a stone-cold bargain compared to a real in-game mention. And damn for sure it's going straight to their demographic. What you're seeing now is not so much the sale of visual real-estate on the playing field. Look around, a lot of the scoreboard ads are for false companies (Sprint remains one of the real sponsors.) That's because this messaging is largely ignored. Where you're seeing the growth, and hearing the kickback from fans who feel their loyalty to buying a $60 title every year should be enough, is in the mentions where gamers are truly a captive audience. Pre-game. Halftime. Gratuitous sponsor mentions by the announcing staff.

Proponents say that the ads are content germane to the game experience, and in some cases mimic what you get in live broadcasts anyway - Pontiac's Keys to the Game and Old Spice Red Zone are two from college football that - because they were grounded in reality - enhanced that experience.

Critics point to a marketing maxim that premium generally means advertising free. And when I watch an NFL broadcast, it doesn't have loading screens and coin tosses sponsored by candy bars, so the argument that the Snickers oversaturation is nothing you don't see in a real NFL game isn't literally supported.

So here's an idea that, admittedly, comes off a little naive. But it draws on the other sector of growth and innovation, and that's paid DLC. And God knows, Madden has enough of it, which I'll get into later next week in my review. But rather than pay to cheat or enhance a franchise, maybe we could pay to control our environment.

How about a DLC enhancement that allows a player to skin his stadium with a certain sponsor? In franchise mode that has a certain amount of realism, doesn't it? Give it a franchise-mode effect that boosts your ability to do things financially. That's much more palatable than base cheating.

Maybe choose from three dozen sponsors, and trick your stadium that way. Paying to see advertisements? Believe me, at a nominal enough fee, some people would still go for it. Especially if the sponsors are interesting, ironic, funny, ultra-realistic, whatever.

But here's the big gamer payoff - if this chit also comes with a "no-advertising" option. Turning off the crap and the creep and the invasion of your eyeballs' real estate.

I realize that to advertisers, they'd demand to pay less if there's an installation base they know is or can opt out of their message. Maybe some sponsorships can be hardwired to the game, and the publisher can stratify its advertising pricing. Base fee gets you in the game but doesn't guarantee delivery to everyone. Hard cash on top of that gives you one guaranteed shot every time someone plays.

But with a DLC chit to modify or turn off ads, publishers like EA could get revenue from players who are happy not to have their eyeballs bombarded; they'd get revenue from players who are happy to have their eyeballs bombarded; and they'd have a more diversified ad portfolio to sell.

It's a back-of-the-envelope idea, but I think it's one worthy of - forgive me - Snacknowledgement.

Stick Jockey is Kotaku's column on sports video games. It runs every Saturday at 10 a.m. U.S. Mountain time.

Those video ads began appearing during WipEout HD's loading screens, presenting players with a video spot that, in some cases, appears to be pitching State Farm Insurance. That advertising looks to be limited to U.S. based owners of WipEout HD for now, a new addition that may have been introduced during the game's recent software update.

While the annoyance of in-game ads may be written off as nothing more than virtual visual blight, justifiably bothersome are accusations that the new ads increase loading times between races. Double Fusion boasts that the ads "contextually match the game's sleek futuristic design" and "complement the WipEout HD world seamlessly," but some players disagree. One YouTube video of WipEout HD's ads shows this in action, a surprising difference that we've yet to verify for ourselves.

Advertising in the WipEout series isn't exactly new, with entries as far back as WipEout 2097 sporting a noticeable presence for energy drink Red Bull, not to mention the design houses that were responsible for the games' visual style.

We have contacted Sony Computer Entertainment America to see what's up with WipEout HD's new ads.

Thanks to Caleb and Gabriel for the heads up.

Warner, 25, an environmental artist who had worked at Relic Games on Dawn of War II, expected to lose copies to piracy. He'd already begun pondering what might be a third option in the ongoing zero-sum struggle between keeping gamers happy and ensuring they give you money for your work. But if nothing else, the torrenting of Raycatcher provided a good argument that someone in the indie sector should try building a game supported by product placements and in-game advertising. And after this experience he figured, why not him?

"I think people are voting - they're just not interested in paying for games any more," Warner said. "The DRM is getting cumbersome, and everyone hates it. I think we're at a point where indies have to consider a new revenue model. Because it takes a long time to make a game."

Warner and another partner, Mitch Lagran, 22, formed Vancouver-based Greener Grass Games to explore just that - a free, browser-based and ad-supported game. The thought of in-game advertising may make the skin crawl for the gaming cognoscenti who form the most evangelical constituency of independent development. The practice may be, on the AAA retail level, a disappointment so far, with slender prospects until a terrible economy rebounds. And browser-based games may have yet to catch on in North America the way they have elsewhere. But games are not built for free, and these two developers- and others - think it can be done at this smaller scale.

"I don't want to do anything The Man-ish," Warner said, acknowledging the stereotypical disconnect between an indie developer, who's supposed to be making better games because he's freed from corporate trappings, and product placements, a nakedly capitalist practice.

"But in order to make games consistently, we need to make money," said Lagran (left). "Otherwise, we can't pay the rent. And if people pirate a lot, advertisements make sense."

Warner had no illusions that Raycatcher (built with another partner) was going to make him rich. Just getting it onto Steam was a learning experience and an accomplishment, he said, akin to a writer getting one's first novel published. But the aftermath - from piracy to patching - poses disincentives to the independent developer, who began wanting to make the cool game he always dreamed of making, and finds that he's inherited a lot of problems and obligations he hadn't imagined.

"The money we're making off Raycatcher, it doesn't justify working on a project for a long period of time; I can't support myself on it," Warner said. Especially when you release a game, and it has bugs, and you have to fix them. In a certain sense, when you release something for money, it's almost like you create a liability for yourself."

The way Warner (right) sees it, the game he and Lagran really wanted to make - a narrative, 3D first person adventure set in an alternate reality - can be done quicker, more cheaply, and with fewer of the headaches that come from a commercial downloadable release like Raycatcher.

In their development histories, Warner as an artist, and Lagran as a programmer, shared the same zeal for the immense back story that is created during a game's design, and only partially revealed during its play. The game they are building, untitled as of now, opens that faucet of creativity. Through exploration and observation, players uncover how they got where they are, what they're supposed to do, and advance the story to its conclusion in a game reminiscent of the Sierra and LucasArts adventures of those companies' 1990s heyday, with elements of Myst.

Such a dependence on observation lends itself to advertising. What kind will players see? Their game, still untitled, will be a 3D, first person adventure, so everything you might see in the real world is on the table, Lagran says. Unity 3D, the engine they're using, supports video texture mapping, so a television displaying a video ad is one example. Outdoors, billboards are a given. Product and brand placement could show up as a poster in a character's bedroom.

"If there's going to be a poster on the wall, and a brand on that poster, you might as well make it a real one," said Lagran, a programmer whose experience includes work as an artist on PowerUp's Night of a Million Billion Zombies. Other possibilities include getting a link to a magazine article, targeted to their player demographics. Or opening up a laptop in a university setting in the game, and getting directed to the web site of that university, in real life.

For all of these, however, Lagran and Warner have to make separate and sometimes competing sales pitches, to gamers as well as advertisers. For advertisers, they're hawking a new and effective way to reach a targeted audience's eyeballs. For gamers, they're saying in effect, don't worry, if the advertising is done well, you'll barely notice.

"I've definitely played games with (in-game advertising) and it's never bothered me," Lagran said. "The only time it does is when it's out of context, the random logo that doesn't fit, like you're in a sci-fi world and you see the Apple logo."

So it's clear that the sponsors are going to have to fit organically into this story, somehow, says Warner, who offhandedly confesses a "seething hatred" for pushy, repeated or conspicuous advertising, probably because he's studied hypnosis. "I don't hate products or people making me more aware of products - I buy my clothes the same places as everybody else. But people getting leverage on me emotionally - Axe (body spray) makes people insecure about their sexuality for example - it's very manipulative and a form of bombardment. There are more tactful ways."

And that's where his and Lagran's sensibilities as artists will help an indie developer do it better.

"I could be delusional, but I haven't seen anybody else, really, doing it at this level," Warner says - meaning advertising within fully-rendered 3D games played online.

That points to another condition of the gaming market they hope to exploit: Low expectations. Casual flash games with advertising, while showing an audience increase (67 million in 2007 to 86 million in 2008, with a 28 percent bump in ad views, isn't looked to as any kind of a memorable gaming experience. "They're almost so casual that they're not considered real games," Lagran said. "We want to capitalize on the idea that these browser games are nothing, and make one that feels like a full-fledged game that you'd download…. I think that's where the industry is going to go."

Of course, it already has, notably in Asia, with North America lagging behind. One portal under development, also based in Vancouver, is Dimerocker, and it too envisions enough potential for in-game indie advertising that it has secured venture capital and is building an API to serve ads to developers that list games there.

J. Joly (he goes by his first initial), Dimerocker's founder and VP of content, considers his venture very much borne of the indie-scene aesthetic, envisioning a portal where users and developers communicate with no middlemen, in a give-and-take of release, adoption, feedback, revision and re-release. The portal is also geared toward distributing games built with the Unity 3D engine, which Greener Grass Games is using. Both studios consider it the fastest way to get a professional quality game into production.

"A great Unity game can be done with a 2 or 3 man team and $100,000," Joly said. That translates to considerable development agility and, by using the advantages of browser-based games, can target them to specific emerging markets such as, say, Brazil, skipping the overhead of traditional retail or downloadable releases, while making money back using Joly's API. Lagran and Warner contend they don't need eye-popping numbers to do well. "I think we're looking at between 50,000 and 100,000 impressions in a month, and we should be pretty good."

That's the concept, anyway. It's not something so ahead of the cutting edge that everyone's shooting it down, but it's not to say in-game indie advertising is unqualifiedly the next great thing.

"I'm a venture capitalist; I support the little guy," said Jeremy Liew, managing director of Lightspeed Venture Partners, with an expertise in social media and casual gaming. "The short story here is in-game advertising has been a little bit of a disappointment. It's not lived up to expectations as a major driver of revenue. That was true even when the ad market was strong, and obviously there's an advertising recession going on right now."

Even though recent (and not exactly disinterested) research projects a $2 billion in-game ad market by 2012, the company releasing that sort of figure, IGA Worldwide, is itself in trouble, trying to secure additional funding but also exploring selling itself off, after losses of $11 million in 2007 and $26 million in 2008. Microsoft also just laid off a quarter of the workforce at Massive, its advertising service.

Sure, the scale of the ad sales operation undertaken by an indie game house might not be so large that it needs to hit the kind of numbers larger publishers want to see. But "I guess it depends on what you define as a success," Liew said. "The challenge still is one of demand. And if you're smaller and more targeted, you do have fewer things to offer."

Liew understands Lagran and Warner's instinct to shift to web-based games, but wonders if the in-game advertising is even necessary. "Piracy is what led people in Asia to shift to free-to-play games with digital distribution models," Liew said. "This is a solved problem. Perhaps we can consider using the solutions that are out there."

Dimerocker would be one of those solutions, with plans for a traditional model of free play leading to premium content, with some microtransaction capabilities. But that doesn't particularly differentiate that portal from the others in that space, which is part of the reason why Joly's pushed into it.

This of course is the business plan; what it may meet in reality bears watching.

"Most marketers characterize in-game advertising as experimental," Liew said. "Given the major budget cuts people are seeing, they're not feeling super experimental. And given the context that this has not lived up to expectations, in a recessionary environment, it's going to be a tough challenge for them."

Perhaps, but at least the price of failure, if it comes to that, will be comparatively low. The episodic nature of their project allows them to either continue a successful IP, or cut their losses without having wasted time and development on a full game nobody really preferred.

"Right now, we're 10 grand in the hole, and it's all borrowed money, friends and family," Warner said. "Even if the first episode is a bomb, my mom isn't gonna get the repo man after us."

And they're banking on the goodwill of gamers who will give a game a chance and understand the tradeoff - that free content has to be supported some way. It's true that their exploration of advertising came about, in a sense, because gamers would not support a previous effort with their own money, and worse, pirates stole it. But gamers shouldn't feel that in-game ads are some form of punishment.

"DRM," said Lagran, "would be a punishment."

Their claims, from a promo video IGA recently released

• 90 percent of gamers recalled the brands they had seen in games.
• 84 percent feel the ads they see "fit" within the games.
• 70 percent perceive brands that advertise within games as "innovative."
• 36 percent "Bought or requested information of a product after seeing an in-game ad."
• Gamers spend 8.4 seconds, on average, looking at an in-game advertisement.

You can see the figures for yourself in their video.

IGA Worldwide Video [Youtube via Joystiq]

VentureBeat reports today that the in-game advertising group—not to be confused with Castlevania developer Koji "IGA" Igarashi—is in the process of securing funding, but is also looking at a potential sale of the company, as it braces for lower than projected revenues. The company has a solid track record of losing heaps of money, with losses of $11 million in 2007, $26 million in 2008.

IGA has had some wins over its few years of existence, securing exclusive contracts with Electronic Arts and helping to bring id Software's Quake Live to online gamers, free of charge.

The in-game advertising firm trimmed back late last year, laying off approximately 25 percent of its staff.

Let's all pray for their continued success. We'd hate to see more people out of work. And we'd miss those deodorant billboards.

Struggling in-game ad firm IGA Worldwide seeks investments or possible sale [VentureBeat - thanks, Leafer09!]

“Our partnership with IGA will allow us to deliver dynamic in-game advertising to the growing PlayStation Network community for the first time,” said Dave Anderson, head of business development at Activision Publishing. “By incorporating dynamic in-game advertising in our titles where it is appropriate, we can increase the realism of our games by presenting consumers with authentic environments in genuine settings, while also expanding a key growth opportunity for the company.”

See? It's all about realism. I hate it when video games make me thirsty for a beverage or excited about a masculine hygiene product that doesn't actually exist. Thank goodness for realistic advertising!

IGA Worldwide Signs Exclusive PlayStation 3 In-Game Advertising Deal With Activision Publishing

New York, N.Y. – September 30, 2008 – IGA Worldwide (IGA), the leading independent in-game advertising network, today announced a multi-year agreement with Activision Publishing, Inc. to deliver dynamic in-game advertising into multiple video game titles on Sony Computer Entertainment’s PLAYSTATION®3 (PS3). The first game to feature IGA integrated ads will be Guitar Hero® World Tour, the next installment in the best-selling franchise. To date, the Guitar Hero franchise has sold in excess of 22 million units worldwide, according to The NPD Group, Charttrack and GfK.

This landmark agreement, which also includes future Activision Publishing titles, is the second publisher deal announced by IGA since the PS3 opened its platform for in-game advertisements.

“Activision has one of the most impressive stables of games in the video game industry,” said Justin Townsend, CEO of IGA Worldwide. “To partner with them demonstrates the appeal of in-game advertising to marketers and consumers, alike. We will be able to connect more brands with engaged users than ever before.”

“Our partnership with IGA will allow us to deliver dynamic in-game advertising to the growing PlayStation Network community for the first time,” said Dave Anderson, head of business development at Activision Publishing. “By incorporating dynamic in-game advertising in our titles where it is appropriate, we can increase the realism of our games by presenting consumers with authentic environments in genuine settings, while also expanding a key growth opportunity for the company.”

IGA and Activision Publishing will work in tandem to integrate the advertisements into the titles in a contextually relevant way. All dynamic ads can be updated in real time, allowing for campaigns to change creative without a major reprogramming effort. Ads can be targeted to a number of different demographics and offer marketers a wide variety of measurement metrics.

Buoyed by a recent Nielsen Games study highlighting the effectiveness of the medium, advertisers continue to expand into the in-game industry. The Nielsen data revealed that over 80 percent of consumers feel games were just as enjoyable with ads as without. Consumers’ positive brand attribute association increased 33 percent when viewing in-game advertisements.

Swelling from 6 million users to 12 million since the beginning of this year, it has landed sponsors including McDonald's and Doritos, the latter encouraging users to create a game around the brand. Nintendo Wii has grabbed headlines, but in marketers' battle for the living room, Xbox Live is the real game-changer selling downloads of premium programming while delivering a expanding roster of original, ad-supported content.

Well played, Xbox Live! Keep working on those advertising opportunities. Don't rest until your entire service is skinned to look like a McGriddles ad. I kid, that's a ridiculous idea.

Digital Hot List: Dynamite Destinations & Devices of '08 [Adweek]

Weird, I thought they were open for the ad business last month when they announced their deal with Double Fusion rival IGA.

Either way, I don't see adding in-game ads as something they or any company should be bragging about. Until I see a dip in game prices or service costs, it doesn't give me anything but an opportunity to help an international company rake in more dough.

Sony Computer Entertainment America and Sony Computer Entertainment Europe Announce Double Fusion as In-Game Advertising Partner

Double Fusion to Work with Publishers and Marketers to Deliver In-Game Advertising On PLAYSTATION(R)3

FOSTER CITY, Calif. and LONDON, July 10 /PRNewswire/ — Sony Computer Entertainment America (SCEA) and Sony Computer Entertainment Europe (SCEE) today announced a partnership with Double Fusion to deliver dynamic in-game advertising on PLAYSTATION(R)3 (PS3(TM)). Double Fusion will leverage its expertise, technology and sales force, working with publishers and advertisers to create effective marketing programs for brands targeting PS3's coveted gamer demographic.
"PS3 is open for the ad business," said Phil Rosenberg, Senior Vice President, SCEA. "We are very excited about hosting contextually relevant and well-crafted creative advertising on PS3. PlayStation is taking a major role in enabling this fast-developing sector that is both positive and inevitable for the games medium."
PS3 provides advertisers with a direct avenue to reach the highly targeted, sought after gaming demographic, and has sold more than 13M units worldwide. DFC Intelligence forecasts that sales for the current generation of game systems including portable devices will pass the 180 million mark by 2011, reiterating the potential for the in-game advertising market. The worldwide in-game advertising industry is expected to grow 1,150 percent to $971.3 million between 2006 and 2011 according to the Yankee Group.
"We have already received tremendous support from publishers who want to incorporate ads into their PS3 games, across all of the regions of the world," Jonathan Epstein, president and CEO, Double Fusion, said. "We are very excited to work with SCE on this and PS3 will add a vast number of players to our already robust network. SCE's participation strengthens the in-game advertising ecosystem."

About Sony Computer Entertainment America Inc.
Sony Computer Entertainment America Inc. continues to redefine the entertainment lifestyle with its PlayStation(R) and PS one(R) game console, the PlayStation(R)2 computer entertainment system, the PSP(R) (PlayStation(R)Portable) handheld entertainment system, the ground-breaking PLAYSTATION(R)3 (PS3(TM)) computer entertainment system and its online and network services PLAYSTATION(R)Network and PLAYSTATION(R)Store.
Recognized as the undisputed industry leader, Sony Computer Entertainment America Inc. markets the PlayStation family of products and develops, publishes, markets and distributes software for the PS one game console, the PlayStation 2 computer entertainment system, PLAYSTATION 3 and the PSP system for the North American market. Based in Foster City, Calif., Sony Computer Entertainment America Inc. serves as headquarters for all North American operations and is a wholly owned subsidiary of Sony Computer Entertainment Inc.

About Sony Computer Entertainment Europe Ltd.
Sony Computer Entertainment Europe (SCEE), based in London, is responsible for the distribution, marketing and sales of PLAYSTATION(R)3, PlayStation(R)2, PSP(TM) (PlayStation(R)Portable) and PLAYSTATION(R)Network software and hardware in 102 territories across Europe, the Middle East, Africa and Oceania. SCEE also develops, publishes markets and distributes entertainment software for these formats, and manages the third party licensing programs for the formats in these territories.

About Double Fusion
Double Fusion reaches more consumers across the broadest range of demographics than any other game advertising network. Utilizing their award-winning fusion.sdk tm and fusion. runtime tm dynamic in-game ad serving technologies originally developed for AAA hard core graphics-intensive video games, the company has successfully expanded the idea that any game type, genre, or platform can harness the power of advertising. Double Fusion currently boasts over 30 top-tier game publishers in a portfolio reaching gamers from 12 to 49 years old. The network's acclaimed integrated marketing solutions continue to inspire Fortune 500 companies to get in the game with groundbreaking advertising campaigns. Privately held and headquartered in San Francisco, Double Fusion has offices in Chicago, New York, Jerusalem, London and Tokyo. More information about Double Fusion is available at http://www.doublefusion.com.
Advertisers interested in opportunities within the Double Fusion Network; and developers and publishers interested in increasing their per-title revenues through integrated and dynamic ad placement opportunities should visit http://www.AdvertisingInPlay.com

“The growth of in-game advertising, both current and projected, makes it an attractive medium for brands looking to reach hard-to-reach consumers,” said Elizabeth Harz, EA’s Senior Vice President of Global Media Sales. “This study solidifies what many in the industry have known for a long time: in-game ads are effective and well-received by the gaming community.”

Hooray! We're only alienating 18% of the gaming public! Hit the jump for the rest of the numbers, most of which seem to be aimed more at attracting advertisers rather than assuaging consumer concerns.

Landmark IGA-Nielsen Study: 82% of Consumers React Positively to Receiving Contextual In-Game Ads During Game Play

New research data from 1,300+ consumers indicates brands receive measurable lift in perception, awareness when advertised in-game

Tuesday 17th June/...Integrating dynamic advertisements into videogame environments provides brands a measured lift in overall consumer awareness and opinion of the products they are exposed to during game play according to the Consumers’ Experience with In-Game Content & Brand Impact of In-Game Advertising Study, a landmark research study conducted by Nielsen BASES and Nielsen Games on behalf of IGA Worldwide, the leading in-game advertising network.

“With young adults now spending on average 6 hours a week gaming, advertisers should be excited at how well their messages were embraced and the brands positively perceived,” said Justin Townsend, CEO of IGA Worldwide. “The consumer insights we’ve gleaned from this data will help drive the industry’s first research-based in-game advertising measurement standards as well as strengthen IGA’s position as an effective in-game ad network brands can trust to efficiently deliver their message to target audiences.”

One of the most important factors confirmed by the Study is that most consumers reacted positively to in-game ads: 82 percent felt games were just as enjoyable with ads as without. In addition, there was an average 61 percent increase in consumers’ favorable opinions of products advertised in-game post-play.

“The growth of in-game advertising, both current and projected, makes it an attractive medium for brands looking to reach hard-to-reach consumers,” said Elizabeth Harz, EA’s Senior Vice President of Global Media Sales. “This study solidifies what many in the industry have known for a long time: in-game ads are effective and well-received by the gaming community.”

One of the most comprehensive in-game advertising effectiveness research studies completed to-date, Nielsen tested multiple variables with multiple brands across multiple games, as opposed to just a single brand in a single game. The research also showed how IGA’s in-game unique advertising opportunities generate significant advertising value across key ad metrics.

"In-game advertising is an opportunity to present targeted brand messaging to a highly desirable demographic. This new data shows how important it is how the targeted and contextual ads are displayed in videogames. Participating in this study with IGA Worldwide has provided valuable new insights into effectively using the medium." said Chad Stoller, Executive Director, Emerging Platforms Organic, Inc.

Nielsen surveyed over 1,300 PC gaming participants in their homes by linking IGA’s proprietary measurement software with research trackers embedded within sample game disc. This unique methodology allowed for unprecedented in-depth analysis of consumer receptivity to in-game ads. The participating brand advertisers included Taco Bell, Jeep and Wrigley and game titles were provided by Electronic Arts and Activision.

Select Findings from the Study:

• There is an average 44 percent increase in post-game aided recall from pre-awareness;

• Positive brand attribute association increased 33 percent across all brands;

• Over 70 percent of consumers who were most opinionated about in-game ads, felt the ads made them feel better about the brand, feel more favorable toward the brand, make them more interested in the brand, and believe the ads are for innovative/cutting edge brands;

• Over 60 percent of the most opinionated consumers feel the ads catch their attention, make games more realistic, do not interrupt the game experience, and are promoting relevant products;

• In-game ad exposures with a duration over 2 seconds, as they are measured in IGA’s in-game ad methodology, generates on average an almost 30% increase in key ad metrics, including ad noticeability +100%, recall +42%, and fit +27%, vs. ad exposures with a duration of less than 1 second

“This study offers proof that dynamic in-game advertising is an influential digital ad medium,” said Dave Anderson, Senior Director Business Development, Activision. “Just as important to us is how users react to the ads. From the research it is clear that the overwhelming majority of consumers enjoyed the gaming experience just as much, if not more, with dynamic ads present. As game publishers, it is reassuring to know advertisers and consumers both stand to benefit from dynamic ads.”

IGA’s network offers dozens of games across multiple genres and platforms, as well as a range of standardized awareness advertising formats with digital measurability. The Company’s advertising products and metrics are in-line with the ad industry and measure ad exposure during game play, including key metrics like minimum time viewed, size and angle thresholds.

Videogame advertising is poised to grow to a $2B global industry by 2012 according to eMarketer, making games the fastest-growing major advertising medium. As a result, advertisers are making significant investments in the in-game environment as an effective strategy to reach target audiences.

“We are thrilled at this opportunity to expand our strong relationship with EA and are pleased to have been selected to support EA and Sony on this new venture,” said Justin Townsend, CEO of IGA Worldwide. “It’s exciting that the PS3 has opened up and marketers will now have access to the platform, as this represents a tremendous opportunity for brands targeting a valuable and hard-to-reach audience, plus it sends a clear message that dynamic in-game advertising has arrived as a compelling medium for marketers.”

So what do these agreements mean to you? Having an in-game advertising partner in place means that the advertisements will be easier to implement as well as being less obtrusive, with appropriate ad placement that doesn't detract from the enjoyment of the game.

I've been a bit down on in-game advertising in the past, but let's face it...this is the future of gaming. Increased production costs have to be offset somehow, and ideally agreements like this should keep game prices at respectable levels. *fingers crossed*

IGA Worldwide Announces Multi-year Deal with EA as Exclusive Dynamic In-Game Advertising Partner for PLAYSTATION 3 Titles

Agreement Provides Marketers First Time Access to EA’s Premium Portfolio of Titles for PLAYSTATION 3 Audience

New York, N.Y. – June 4, 2008 – IGA Worldwide (IGA), the leading independent in-game advertising network today announced a two-year agreement with Electronic Arts Inc. (NASDAQ: ERTS), the world’s leading interactive entertainment software company, to become the media company’s exclusive global, dynamic in-game advertising partner for titles on Sony Computer Entertainment’s PLAYSTATION®3 computer entertainment system. Sony recently opened its PS3™ platform to allow brands to advertise dynamically within games played on the popular video game console, which to date has sold 13 million units worldwide (1), and is forecasted to sell 58.1 million by 2012 (2).

This agreement provides marketers the ability to plan and execute long-term campaigns targeted towards an elusive demographic – males 18 – 34 – through EA’s blockbuster roster of titles. The in-game development cycle also benefits gamers in that the advertisements are better integrated within the gaming environment in order to deliver a seamless and more authentic game environment. EA has worked with IGA on various projects to date, and this agreement builds on that successful partnership.

Under the agreement, IGA will exclusively manage dynamic in-game advertising within EA’s portfolio of PS3 titles including popular EA SPORTS™ franchises Madden NFL football, NBA LIVE basketball, NASCAR® racing and NHL® hockey. IGA will also have access to EA’s popular racing franchises Need for Speed™ and Burnout™.

“We are thrilled at this opportunity to expand our strong relationship with EA and are pleased to have been selected to support EA and Sony on this new venture,” said Justin Townsend, CEO of IGA Worldwide. “It’s exciting that the PS3 has opened up and marketers will now have access to the platform, as this represents a tremendous opportunity for brands targeting a valuable and hard-to-reach audience, plus it sends a clear message that dynamic in-game advertising has arrived as a compelling medium for marketers.”

IGA’s dynamic in-game advertising platform allows for in-game ad elements to be updated in real time, keeping ads fresh and relevant to each gamer. EA’s development teams work closely with IGA to ensure that advertising is placed appropriately within the game environment in order to reflect an authentic gaming experience.

“EA is committed to providing both great entertainment experiences for consumers and effective advertising solutions for marketers,” said Elizabeth Harz, EA’s Senior Vice President of Global Advertising Sales. “Dynamic in-game advertising is an important growth area for our business, and we are excited to partner with IGA to provide industry leading in-game marketing.”

IGA serves hundreds of millions of dynamic ad impressions per week to more than 10 million highly-engaged online gamers across a wide range of game genres. IGA’s proprietary technology provides marketers with comprehensive measurement data including how consumers interact with each piece of creative, the size of the ad on screen, for how long and at what angle.

"City of Heroes is a key property for NCsoft and we take great care to grow and nurture our player community," said Brian Clayton, General Manager of NCsoft's Northern California studio. "We are pleased to work with Double Fusion on City of Heroes, as they have demonstrated sensitivity to the needs of our community and fundamentally understand how advertising can bring value to the players when executed gracefully, and in the appropriate context. In addition to allowing any of our players to opt-out if they so choose, their flexible technology will not only allow us to bring brand messages into the game but also provide a fun, new platform for displaying player-created materials."

NCsoft and Double Fusion make the common argument that the real world ads will add a level of realism to the game, but by allowing players to decide on their own whether that's really true they seem to be putting their money where their mouth is. NCsoft added that they will "dedicate all advertising dollars it earns to fund further game development for the online title."

I'm still not a fan of in-game advertising, but leaving the control in the hands of the players is a HUGE step forward. Dumping their earnings into further development is also a big plus.

The ads will go live sometime this summer, according to NCsoft NorCal GM Brian Clayton and the billboards can also be used to display player created content like, say, a picture of the top character in the game, which is kinda cool.

Bringing Optional In-Game Ads to Paragon City and the Rogue Isles [City of Heroes]

NCSOFT SELECTS DOUBLE FUSION AS GAME ADVERTISING PARTNER FOR CITY OF HEROES

SAN FRANCISCO — Apr. 3, 2008— Leading independent game advertising provider Double Fusion has entered an agreement with NCsoft®, the leading developer and publisher of online computer games, to represent the successful comic-book inspired massively multiplayer online game, City of Heroes®. Double Fusion will provide the technology and sales force to bring brands into the popular online role-playing game which takes place in a modern urban setting, an ideal environment for unobtrusive in-game advertising.

Double Fusion and NCsoft are focused on providing value to the players through this advertising partnership. While real world ads will lend realism to the urban world of City of Heroes, NCsoft also plans on taking advantage of Double Fusion's technology to display player-created content within the game. The publisher will dedicate all advertising dollars it earns to fund further game development for the online title, yet still allow players to opt out of advertising in order to provide flexibility to community members.

"Our partnership with NCsoft is a clear showcase for two of our guiding philosophies: bringing value to the player through appropriate use of advertising spaces and bringing new business models to the marketplace by creating new revenue streams that can help fund game development and community support" said Jonathan Epstein, president and CEO, Double Fusion.

"City of Heroes is a key property for NCsoft and we take great care to grow and nurture our player community," said Brian Clayton, General Manager of NCsoft's Northern California studio. "We are pleased to work with Double Fusion on City of Heroes, as they have demonstrated sensitivity to the needs of our community and fundamentally understand how advertising can bring value to the players when executed gracefully, and in the appropriate context. In addition to allowing any of our players to opt-out if they so choose, their flexible technology will not only allow us to bring brand messages into the game but also provide a fun, new platform for displaying player-created materials."

The addition of City of Heroes to the Double Fusion network demonstrates the company's commitment to offering their advertiser and agency partners a wide array of in-game advertising opportunities, to maximizing revenues for its publisher and developer partners and to building a portfolio of top titles among retail PC and console games, massively multiplayer online games, social networks, casual downloadable games, advanced online games and virtual worlds.

The deal will extend the contract between the two for two years, but more importantly expand the number of games that Electronic Arts will allow Massive to place ads in.

With the latest agreement, EA will further expand the opportunities available to advertisers by extending the participation of current titles in the Massive network as well as incorporating additional, highly anticipated games over the course of the deal. The wide range of EA content that will be available in the Massive network includes the next two iterations of popular EA SPORTS(TM) franchises including Madden NFL* football, NBA LIVE basketball, NASCAR* (R) racing and NHL(R) hockey.

While the press release spends lots of time explaining how wonderful this is for advertisers and how profitable it will be for Electronic Arts, it fails to mention the impact it has on gamers. I don't mind some in-game advertising, but reading a release like this makes me feel like these games are little more than glorified vehicles for advertising... and we're still paying top dollar to get them. How crazy is that?

Agreement Enables Integration of In-Game Advertising and Premium Video Game Content into Long-Term Campaign Planning and Media Buying Processes

REDWOOD CITY, Calif. & NEW YORK—(BUSINESS WIRE)—March 18, 2008—Electronic Arts Inc. (NASDAQ:ERTS) and Massive Inc., a wholly owned subsidiary of Microsoft Corp. (Nasdaq:MSFT) and a leading network for video game advertising, today announced an expansion and two-year extension of their agreement to offer dynamic in-game advertising for EA video games. The new global agreement provides unprecedented opportunities for advertisers to engage with EA's highly coveted audience — especially males ages 18 to 34 — through its roster of blockbuster games on the Xbox 360(TM) platform and exclusive rights to a majority of EA's premium PC products.

With over three years of experience in dynamically serving advertisements in video games, Massive is the definitive in-game advertising solution for advertisers around the world, including Ford Motor Co. in the U.S., Rogers in Canada, and Puma in Europe. Massive's long-standing relationship with EA, publisher of many of the world's most popular games, provides advertisers with extensive reach through EA's portfolio of premium content video games. This agreement represents a critical point of differentiation for Massive as the in-game advertising medium continues its momentum as a more attractive and effective medium compared with traditional forms of established advertising.

With the latest agreement, EA will further expand the opportunities available to advertisers by extending the participation of current titles in the Massive network as well as incorporating additional, highly anticipated games over the course of the deal. The wide range of EA content that will be available in the Massive network includes the next two iterations of popular EA SPORTS(TM) franchises including Madden NFL* football, NBA LIVE basketball, NASCAR* (R) racing and NHL(R) hockey.

Massive will continue to be the exclusive in-game ad network for PC and Xbox 360 platforms of the world's largest racing franchise, EA's Need For Speed(TM), including current live titles Need for Speed Carbon and Need for Speed ProStreet. Massive is also working with marketers to incorporate dynamic advertising into another popular EA racing title, Burnout(TM) Paradise.

"We continue to utilize the breadth and depth of Massive's content to market a range of our clients' key brands," said Brian Bos, senior vice president, Convergence Director, Mindshare - Team Detroit. "With this expanded partnership, we will be able to plan dynamic in-game campaigns several years out, which is critical in making Massive's content platform a more integral part of our video game marketing strategy."

"EA strongly believes that dynamic in-game advertising is an important growth area for our business, and is one of many opportunities we are pursuing in growing the advertising market," said Kathy Vrabeck, president of the Casual Entertainment Label at EA. "We selected Massive because they are the industry leader in this space with a global sales footprint, solid brand recognition and in-depth experience in video game advertising."

By providing certainty around Massive's ad inventory for years into the future, the multiyear agreement enables advertisers to plan in-game advertising on a calendar year basis as part of a holistic campaign development process alongside other mediums such as TV, online and print media.

Rouwen Bastian, Coordinator European Media Strategies at Opel, said: "In-game advertising plays an essential role for us in reaching today's young adult consumers. The multi-year agreement between Massive and EA makes it possible for us to make greater strategic use of in-game advertising by incorporating it into the same long-term planning as other media forms."

Richard Dance, Group Account Director at MindShare Interaction UK, said: "The growing channel of in-game advertising provides an exciting and creative medium in which to work. Although we are only scratching the surface with regards to the opportunities it provides, more and more of our clients are keen to include in-game advertising as a part of their multichannel strategy."

"Our latest agreement with EA expands advertisers' unprecedented access to EA's world-class franchises to reach young male gamers around the world," said Cory Van Arsdale, CEO of Massive. "This multiyear partnership reflects both the maturity of the dynamic in-game advertising medium and the benefits that our network continues to deliver for both publishers and advertisers."

Topps' Speed Racer Candy Tracks Game [Topps]

Says Stringer:

The [supposed] solution to everything at the moment in the digital space is ad-supported. While advertisers are happy to talk that up, there is a limit to the amount of money available... Young people don't like advertising very much...

Make that, young people don't like bad advertising. If it's done in an innovative, non-intrusive way, in-game advertising could work. I mean, why not?

Questions Raised Over Modern Ads [FT.com via Gamasutra]

NCsoft Launches Chunk 2, Adding Advertising, New Content to Dungeon Runners Game

AUSTIN, Texas—(BUSINESS WIRE)—NCsoft® today announced the release of Chunk 2, the second content update for its successful free-to-download and play game, Dungeon Runners™. This update includes in-game advertising in non-member worlds, more bank space for members, item trading, increased access to prime loot, and overall Player versus Environment (PvE) and Player versus Player (PvP) balance refinements.

Dungeon Runners is a free to download and play online multiplayer role playing game in a satirical, fast-paced sword-and-shield setting, where defeating monsters and evil enemies results in piles of loot, treasure, and non-stop fun.

The hallmark of Chunk 2 is in-game advertising which will help fund future development of the massively multiplayer online game (MMOG) and keep it free for players. The in-game advertising will be visible to non-members in loading screens and in a banner that sits on top of the game window during play. Dungeon Runners members, who can subscribe to the game for only $4.99 per month, will not see any of the advertising.

Advertising in Dungeon Runners will open up new content and functionality for all players. Non-member players will gain access to new content previously unavailable to them, including dungeons and valuable items. Also, non-members will now have access to one page of bank slots, enabling them to store more items. Members will increase their bank storage space from one to three pages.

Also, by popular demand, a secure trade system has been added to Dungeon Runners. This new feature allows everyone to easily trade items (with the exception of gold) with other players through a simple interface.

"Chunk 2 unlocks an enormous amount of playable content for non-members that they didn't have access to before thanks to the addition of in-game advertising," said Stephen Nichols, NCsoft's producer and lead programmer for Dungeon Runners. "Our non-member players are very happy they can now use what was previously members-only loot, and our members are really excited about receiving additional bank slots to hold their items. These changes, plus our new secure trade system, make this update a win-win for everyone!"

Further enhancements include increased rare item drops and stackable potions for members and non-members alike, which lead to more success in this hack-and-slash game.

Dungeon Runners can be downloaded for free at http://www.dungeonrunners.com/join.html. Players can play for free or subscribe to the members version at any point for $4.99 a month. Members have access to such benefits as log-in queue priority, members-only servers, and the most powerful items, weapons and armor. Membership status also includes three bank pages for hundreds of loot items and the ability to stack potions in one inventory slot to save room for even more loot.

To find out more please visit the Dungeon Runners web site at: www.dungeonrunners.com.

The game is rated Teen by the Entertainment Software Rating Board.