In-game ads tend to leave their mark

Two years ago, Microsoft acquired Massive, which produced advertising placed in video games. Last week, it talked about the success of its in-game advertising network on Xbox 360.

The day after, Sony said it made a deal with IGA Worldwide, a competitor to Massive, to sell in-game advertising on PlayStation 3 in Europe and North America.

Things may be heating up in the field, but the approaches of the two console makers differ.

Microsoft, with Massive, brokers all the advertising that appears in Xbox 360 games. It's part of the company's strategy to provide an end-to-end offering for advertisers seeking to reach consumers on a full range of digital devices.

Sony's approach is more open. Last summer, it announced an in-house video-game advertising unit, and started working with Nielsen to measure the business.

Nielsen Media Research expects in-game ads to hit $1 billion by 2010.

In February, Sony said it would open its platform to allow independent in-game ad companies to broker deals with third-party game publishers.

In just such a deal, IGA announced last week that it will be the exclusive ad provider for Electronic Arts' titles on Sony's PlayStation 3. EA's popular sports games are among the most fertile ground for in-game ads because the stadiums and race cars they depict are plastered with ads in real life. Executives argue that this enhances the experience.

All the in-game ad networks are seeking to lure more advertisers to their offerings as a key vehicle for reaching 18- to 34-year-old males. (Even within the industry, there is a range of opinions on the potential for this form of advertising.)

Microsoft just published research it conducted with Interpret showing that ads for shoe and apparel maker Adidas in the game "Major League Baseball 2K7" were effective in boosting awareness of the brand and its cachet:

"Among those exposed to the Adidas ads (the test group), 40 percent recall the company's tagline of 'Impossible Is Nothing' — an increase of 90 percent over those not exposed to the ads (the control group).

The number of gamers exposed to the ads who agreed with the statements 'Adidas is the only brand for me' and 'Adidas is an inspirational brand' rose 70 percent over those not exposed to the ads. In addition, 73 percent of gamers recalling the ads agreed with the statement that 'the ads enhanced the realism of the game.' "

Microsoft also said its in-game ad network has been audited by a third party, another effort to combat skepticism.

What's been our experience? Consider "Grand Theft Auto IV." That game is populated with lots of advertising on billboards and on radio stations you listen to as you drive around town.

The often hilarious commercials parody real-world advertising.

Is this a case where the introduction of real-world ads would detract?

On the record

New products: Issaquah-based McObject, which develops data-management technology, has released version 3.0 of its Perst open-source, object-oriented database for Java and .NET. ... Speakeasy, the Seattle-based broadband provider owned by Best Buy, has launched Business Ethernet data service for small businesses.

Partnerships: Seattle-based Pelago, a mobile software developer, said its Whrrl "social-discovery" service is now available to users of the BlackBerry Pearl and Curve.

Acquisitions: Northwest Telephone, a telecommunications company based in Wenatchee and operating in Washington, Oregon and Idaho, has been purchased by Zayo Group, a telecom in Louisville, Colo.

Download, a column of news bits, observations and miscellany, is gathered by The Seattle Times technology staff. We can be reached at 206-464-2265 or biztech@seattletimes.com.