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Real ads pop up in video-game world

By May Wong
The Associated Press

AP Billboards in the "Need for Speed Underground 2" video game contain ads from such businesses as Best Buy, Cingular and Old Spice.

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SAN JOSE, Calif. — Roar down city streets in the upcoming "Need for Speed Underground 2" racing game and you'll see a Best Buy store amid the skyscrapers along with bright billboards hawking Cingular Wireless, Old Spice and Burger King.

The fictional landscapes of video games are increasingly being dotted with product placements, pitching everything from athletic shoes to movies. And that's not all: Advertisers will soon be able to update the ads over the Internet whenever they want, long after the games are sold.

The plugs reflect a growing business reality: Video games are stealing viewers from movies and television, where product placement has long been a staple. TV viewership among men aged 18 to 34 declined by about 12 percent last year, while that group spent 20 percent more time on games, according to Nielsen Media Research.

Video games attract not just hard-core gamers, but people of all ages and more women than ever. In the United States, overall sales reached $10.7 billion last year — more than movie box-office receipts — and are expected to reach nearly $16.9 billion in 2008, according to market research firm DFC Intelligence.

"If the audience is there, the advertiser will be there," said Anthony Noto, a media-entertainment and Internet analyst at Goldman Sachs.

Case in point: The marketing budget for ads in video games at Chrysler was zero four years ago. Now it represents more than 10 percent of overall marketing budget, planting Chrysler, Jeep and Dodge vehicles in more than 12 video games, while spending on television and print ads has dropped.

"When I was a kid, I used to run downstairs to watch Saturday morning cartoons, but my sons wake up and run downstairs to play video games," said Jeff Bell, a Chrysler vice president.

The automaker invested six figures a few years ago so players of Tony Hawk's Pro Skater 2 game would have to do rail stunts over a Jeep to get points or go through game levels decorated with Jeep billboards.

Judging the amount of eyeball time Jeep got from that investment was just a rough calculation. In the upcoming Tony Hawk's Underground 2 game, Jeep hopes to get a better measurement: Players who want game upgrades will have to go to Jeep's Web site to download them.
 
Today, Massive is to launch what is believed to be a first-of-its-kind video-game advertising network, allowing marketers to deliver new ads into console and PC games via an online connection.

Billboards in a subway scene could feature a new movie trailer one day and the hottest new energy drink the next. Promotions could be tailored to geography, so that players in New York and California might see different car ads.

Massive's service also can track the viewing time each ad gets, a key measure advertisers rely on in paying for TV spots.

Ubisoft plans to use Massive's technology in the next sequel of the popular Tom Clancy Splinter Cell series, due out in March. Next year, Vivendi Universal Games plans to introduce four games using the technology.

Capitalizing on the same advertising trend, Nielsen Entertainment is working with game publisher Activision to start a game-rating service similar to its existing TV-ratings system.

"It's a natural progression for the gaming industry to create standardized [measures] to help everybody know the value of ads in games," said Matt Tatham, a Nielsen Entertainment spokesman.

In-game advertising has gained momentum in the past two years because traditional television and print ads are becoming less effective, said Wim Stocks, executive vice president of sales and marketing at Atari.

Advertising now shows up everywhere, most notably in blockbuster titles. There's a Samsung cellphone in "Enter the Matrix" and a Palm personal digital assistant in "Splinter Cell."

Electronics Arts, the world's largest video-game publisher, says its ad revenues are up 60 percent this year.

Mitchell Davis, chief executive at Massive, developed the concept for real-time advertising in games more than two years ago after playing "Grand Theft Auto."

"It was all fake advertising in the game, and I thought, 'It should be real.' "

If Massive's technology and service works as promised, Ubisoft and other game makers say in-game ads will become a standard marketing method. "This will be woven into every major game company's plans moving forward, but it's really only going to work in games where it makes sense," said Ed Zobrist, vice president of global marketing at Vivendi.

His company has turned away advertisers: alcohol companies that wanted to be in the new "Leisure Suit Larry" game and shoe companies that wanted fantasy characters to wear their treads. "Real-world brands just do not have a place in a fantasy game," Zobrist said.