In-Game Advertising Moves to Playstation 3, But What Works?

(MoneyWatch)  Sony announced today that they'll open up the Playstation 3 for in-game advertising. From the AdWeek article:

Sony is opening up its PlayStation 3 platform to allow brands to advertise on the medium. The deal could be worth $100 million over three years to Sony Computer Entertainment America, Foster City, Calif.

Video game marketer Electronic Arts, Redwood City, Calif., will be the first to take advantage of the PlayStation 3 platform via its EA Sports and EA brands. EA Sports games include Madden NFL football, NBA Live basketball, Nascar racing and NHL hockey. EA itself will run ads for The Need for Speed and Burnout.

The promise of in-game advertising is getting at those 18-35 males who are abandoning Old Media in droves. But in-game advertising runs into some real problems. While a game like the ultrarealistic auto racer Gran Turismo can get away with sticking up a billboard for Subway along the race track, many (if not most) video games are set in an alternate universe where traditional advertising is gonna look mighty out of place. I'm not sure gamers want to see Mario running past a Doritos banner. In addition, it's nearly impossible to track engagement and ROI on these type of ads.

Interstitial ads, which pop while a gamer plays, can work in certain genres. Game maker PlayFirst has had some success with using these for their smash-hit casual game Diner Dash, in which video ads play in between rounds. But Diner Dash is meant to be played in quick bursts, while more traditional, hardcore games are meant to be played in long sessions, and any sort of interruption is going to anger a gamer.

Wild Tangent CEO Alex St. John, one of the first movers in in-game advertising, recently decried the institution as whole in an article on GameIndustry.biz before offering up his own solution:

In retrospect, St John says that it is a huge mistake to ever interrupt a game while somebody is playing it. He no longer thinks injecting ads into console games is a "bright idea or where the market opportunity is."

"I have to say - after brilliantly pioneering the space and being a huge advocate of it - we've actually shifted models to one that works a hell of a lot better and is remarkably simple," St John remarked.

That model is advertising supporting gaming on a per play basis, where users decide if they want to spent their own money or have a company such as Coca Cola pay for their session for them.

"And if you say 'I'll take the free play from Coke,' Coke plays a little 30 second video ad while the game is loading - that's the time you are sitting there waiting for the game to load anyway, it plays the Coke ad. It's not doing anything else. Then you go into the game and play it for free," he explained.

"We average USD 140 CPMs putting that ad unit in front of any kind of game without modifying it, without bothering developers, without crapping it up. We serve it with a standard double-click ad server."

(Picture from Flickr user RebeccaPollard, CC 2.0)