The worldwide gaming market generates £144.55bn ($183.9bn) of revenue, but in-game ad spend from brands is still low, according to WARC’s latest global advertising trends report.
Titled ‘Gaming: Advertising’s untapped opportunity’, the research found that while gaming peaked during the pandemic, the share of advertisers planning to increase their spend in the sector has fallen from 72% to 52%.
This comes despite 90% of advertisers agreeing that gaming is a particularly brand safe channel, thanks to tools like fraud deduction context and age rating.
Overall, US advertisers are forecast to spend £5.29bn ($6.7bn) on in-game adverts in 2024, up 10% year-on-year, equivalent to only 3.7% of all digital ad spend.
Attention: eyes on screen
According to research from Dentsu, Lumen and Activation Blizzard, in-game video ads achieved a 100% on-screen impression rate – exceeding the benchmark of 83% and garnering an average of over 10,000 attentive seconds.
“Gaming requires attention. It’s unlikely that gamers multitask in-game; everything else is just background noise. ⟮For brands⟯ it’s a matter of keeping that attention, and not jolting gamers out of it,” said Omnicom Media Group Asia Pacific chief enablement officer Nina Fedorczuk.
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In addition, Gen Z spends an average of 12.2 hours per week on gaming. There is also a clear generational shift to more active engagement, with 53% of Gen Z consumers spending more than half their time engaging with game IP outside of playing the actual games.
Moreover, 72% of 35-54 year olds game at least once a week, and 46% of over 55s says they game at least once a week according to research by Newzoo.
Making an ad-ready environment
Coinciding with this, game publishers are working to build advertising capabilities and prove the effectiveness of in-game adverts, with data from Unity suggesting a 26.7% year on year rise in advertising revenue, with the biggest rise in revenue coming from in-app adverts.
Netflix has spent £0.79bn (£1bn) on its gaming business since launching three years ago with gaming downloads up 200% since 2022.
Moreover, while gaming companies like Roblox (which has experienced an impressive 31% topline growth) are working hard to boost advertising revenue, such expenditure may be ineffective without adequate support.
“Gaming is huge, both in audience and cultural impact, and it’s highly complex ecosystem spans devices and platforms defying conventional definitions of a channel,” said WARC Media head Alex Brownsell.
“[It has] has long been heralded as a vital emerging opportunity for brands, particularly those wanting to reach younger audiences.
“However, in-game advertising spend remains low. This may soon change, with game publishers focused on improving ad monetisation. But evidence is needed to make the case for gaming as an advertising medium.”