Analysis Advertisers are desperate, says Katherine Hays, Chief Operating Officer of Massive, the US company that has just come out of stealth mode to lay claim to the world's first advertising network for multiple games on multiple gaming platforms.
The fundamental reason for this desperation is that the 30 second TV ad spot is no longer delivering the undivided attention of many sectors of the US buying public.
In particular advertising is missing out on the 18 to 34 year old male, and if you listen to Hays, she believes that 70 per cent of them are spending at least 5 hours a week on games. In early studies the really aggressive gamers play around 2 hours per night.
"Despite the desirability of this audience the market for in-game advertising was only $10m last year versus the $12bn that was spent on US broadcast TV," says Hays.
These figures don't quite tally with recent reports, with one from Yankee Group putting in-game advertising at around $79m, but it is still a drop in the ocean compared to TV.
"Advertisers are desperate because they lack the ability to advertise in large enough numbers to people that are playing a diverse range of games. What they want is to aggregate 1m or 2m people on any given night in the right demographic, at the right time, just like TV," said Hays.
So far Massive has signed up exclusive deals with Vivendi Universal Games, UbiSoft, Konami and Legacy Interactive, and US coverage from Atari.
"In the past, games only offered long term, permanent product placement. They offered no 'quick reach' needs," said Hays.
But now Hays says that the Massive network changes all that and reckons that she already has the advertisers on board. "We are targeting the top 100 advertisers in the US. Recently we employed a VP of advertising sales, and he found that he was being called by prospective advertisers. He said to me "In advertising you do not get proactive calls from businesses like General Motors, Coke, McDonalds and Citibank.
"Advertising agencies are being given a mandate to move budget out of TV advertising and being asked, 'How do you plan to get us into video games?'"
But the key to Massive's future is the way in which it has anticipated this market need, and tried to tie the market up, right from the start.
What Massive has signed, with each of its games publishers, are multi-year exclusive deals. This means that if any of the games publishers select a game to have advertising in it, then that advertising must come from Massive.
"Some games don't make sense to put advertising in, but where they choose to, the ads have to come from us," said Hays.
So far it seems small beer. The software to insert advertising only exists in a couple of pilot games, 15 games due out now and 40 over the coming months. Is that a lot of games? Well considering that less than 100 games makes up most of the current buying and game playing activity globally, at any point in time, it might be.
"We have tied up 48 per cent of the market already with the publishers we have signed and that figure is based on games revenue," claimed Hays.
That's a bit misleading, in that the companies that Massive have signed, accounted for 48 per cent of the US games revenues last year when you take all of their games into account. Massive won't be on all of their games though.