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Digital Games Industries:
Developments, Impact and Direction

The Emergent Advergames Industry: Developments, Impact, and Direction

Susan B. Kretchmer
Johns Hopkins University & Partnership for Progress on the Digital Divide, U.S.A.

Keywords: advergames, advertising, entertainment, promotion, brands, advergames industry

Many companies have begun to use the Internet as part of their marketing mix. Banner ads were highly touted, but have produced a mere .5% click-through rate and, in general, most web surfers spend only 60 seconds at an average site and browse about nine in an online session (March, 2001). In response, advertisers have tried to make the online experience more entertaining. Yet, a fairly new approach, advergaming, appears to offer the greatest promise for success. Indeed, the newest and "hottest" mass media marketing strategy is advergaming, the emergent international industry of online computer games created solely to promote brands.

Games are the fastest growing segment of online entertainment, increasing 25% per year and surpassing total movie box office revenues (YaYa, 2002a). In 2002, 45 million people are expected to play online games, jumping to a projected 73 million in 2004. Game sites are 8 of the top 10 entertainment destinations on the Internet. Online gamers play for an average of 13 hours per week, which is greater than the amount of time spent reading newspapers or magazines and about equivalent to the time spent watching TV. The session length in gaming areas averages 28 minutes, or four times the general site average, and click-through rates have reached as high as 30% (Blockdot, 2001). Plus, 50% of online gamers are women, while 73% of computer gamers are over 18 years of age and 42% are over 35. Thus, games offer advertisers a powerful and dynamic medium to engage consumers, build brand interactivity, drive traffic, and capture market information in the guise of entertainment. As YaYa, one of the pioneers of this new media form, explains, the purpose of advergaming is to "expose consumers to products by engaging them in an addictive game-play experience while simultaneously reinforcing a positive brand impression" (YaYa, 2002b).

In the past, video games specialized in standard but virtual product placement. In contrast, the new generation of advergames crafts the entire entertainment experience around the sponsor's brand. Moreover, advergames can allow players to select a character for game play, thereby enabling consumer psychographic, as well as demographic, data collection. The 3-D console-quality advergames can be played on a web site, or distributed via email in a message, sent to targeted demographics, that launches the game and promotes "viral compounding," the spreading of a promotion from one individual to another that capitalizes on the player's competitive spirit (e.g., sending a challenge to beat one's game score) or collaborative nature (e.g., invitation to join a multi-player game). Although the advertising message is always central to game play, the level of brand immersion can vary from associative, to illustrative, to demonstative. Advergaming can "drive brand awareness by associating the product with the lifestyle or activity featured in the game," "prominently feature the product itself in game play," or "leverage the full arsenal of interactivity by allowing the consumer to experience the product within the virtual confines of the gaming space" (Chen & Ringel, 2001).

The success of advergames across a broad range of products is phenomenal -- retention rates 10 times greater than for broadcast commercials, 16-45% of recipients play games received via promotional email for an average of 25 minutes, 400% viral compounding with 90% of those who receive the pass-along email responding (Pintak, 2001; Rodgers, 2002). In addition, advergames build relationships between consumers and products by transferring the emotion of the game to the brand that is powering it and creating an engaging, rather than passive, experience.

One example of perhaps the most troubling twist on advergaming is the use of freely available open-source game software designed by commercial advergame pioneer Wild Tangent by Resistance Records, an arm of the National Alliance neo-Nazi group, to create "Ethnic Cleansing," a CD-ROM computer game that transforms racially motivated hatred and violence into entertainment (ADL, 2002). The object of "Ethnic Cleansing" is for the player, who can choose to wear virtual KKK robes or Skinhead attire, to patrol the streets and subways of a decimated city and kill "predatory sub-human" Blacks and Latinos and their Jewish "masters," who are portrayed as the personification of evil, to "save" the white world. The game features racist characterizations and slurs augmented with various National Alliance signs and racist rock music blaring on the soundtrack. As such, this digital nexus of entertainment and advertising points to the crucial need for analyses of new media to focus on the creation of new consumption both in terms of commodities as well as ideas.

Conceived as entertainment and transformed into advertising, advergames are being heralded as the future of promotion in the new digital world of cyberspace. Through case study and socio-economic analysis, this paper explores the developments, impact, and direction of this emergent phenomena in the digital games industry.

References

Anti-Defamation League (ADL) (2002). Racist groups using computer gaming to promote violence against blacks, latinos and jews. Available online: http://www.adl.org/videogames/videogames_print.asp.

Blockdot (2001). Advergaming 101. Available online: http://www.blockdot.com/advergaming/stats.cfm.

Chen, J., & Ringel, M. (2001). Can advergaming be the future of interactive advertising? <kpe> Fast Forward. Available online: http://www.kpe.com.

March, T. (2001, Spring). How to bag the elusive human attention span. Digitrends. Available online: http://www.digitrends.net/marketing/13639_16525.html.

Pintak, L. (2001, May 23). It's not only a game: Advergaming set to become a billion dollar industry. Available online: http://www.turboads.com/richmedia_news/2001rmn/rmn20010523.shtml.

Rodgers, A. L. (2002, January). Game theory. Available online: http://www.fastcompany.com/build/build_feature/yaya.html.

YaYa (2002a). Why games? Available online: http://www.yaya.com/why/index_why.html.

YaYa (2002b). YaYa creates viral Internet games that build brands and drive revenue. YaYa online press kit. Available online: http://reports.yaya.com/presskit.pdf.

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Digital Games Industries: Developments, Impact and Direction

The Emergent Advergames Industry: Developments, Impact, and Direction

Digital Games Industries:
Developments, Impact and Direction