Advertising Undervalues Gaming Industry
A recent report by GameAnalytics reveals that although the gaming industry is predicted to reach $130 billion in advertising revenue by 2025, brands continue to undervalue the potential of advertising in gaming.
Mobile gaming, which accounts for 50% of gaming revenue and incorporates advertising as a monetization model, remains the largest market for advertisers in the gaming industry.
Interestingly, gaming advertising expenditure in the USA is less than 6% of total advertising spend. This indicates that despite being the most profitable segment of the entertainment industry, brands still view gaming as a niche market. Brands spent $59.4 billion on TV advertising but only $1.5 billion on gaming ads, despite the fact that consumers spend more time gaming than watching television.
Misconceptions about Gamers
One reason for this disparity is outdated stereotypes about gamers. Many brands believe that gamers are primarily young unemployed men. However, DataProt analysis shows that gamers are, on average, 35 years old, and almost half of all gamers are women. Brands are missing out on vast potential due to their misconceptions about the gaming industry.
In addition, the report by GameAnalytics highlights that brands are more interested in advertising in high-quality games with respectable content. Hypercasual games with low budgets and high churn rates may be rejected by brands. Excessive in-game ads can also frustrate users, affecting their perception of the advertised products. On the other hand, many game developers are open to advertising partnerships as it provides additional revenue while reducing the risk of users switching to competitor games.
In-Game Advertising On the Rise
According to The Drum, 81% of media buyers plan to increase their spending on in-game advertising, and 93% of those surveyed intend to run in-game ads by 2025. This indicates that advertisers are recognizing the significant opportunities for advertising their products within games.
GameAnalytics suggests that game developers can attract advertising attention by focusing on creating high-quality games and working with agencies and mediation platforms to educate brands about the potential of in-game advertising. Implementing measurement SDKs can also help track ad performance and build confidence in the market.