Advertising continues to be a major source of revenue and customer acquisition, however a new report by GameAnalytics has found that gaming continues to be undervalued by brands.
Statista data predicts that advertising revenue in the gaming industry will reach $130 billion in 2025, compared to $46 billion in 2021. Mobile gaming, which more frequently incorporates advertising as a monetisation model and accounts for 50% of gaming revenue, remains the largest market for advertisers within the gaming industry.
Despite this, gaming accounted for less than 6% of advertising spend in the USA, which suggests that despite being the most profitable segment of the entertainment industry, gaming is still seen as a niche interest by brands. Accounting firm Ernst & Young reports that brands spent $59.4 billion on TV advertising, compared to just $1.5 billion in gaming, despite the fact that consumers spend 37% of their time gaming compared to 8% watching television, on average.
Missed opportunities
The data suggests that part of this disparity is due to outdated stereotypes about who gamers are, with a common perception that gamers are primarily unemployed young men. In reality, DataProt analysis shows that the average age of gamers worldwide is 35, with almost half of all gamers being women. As such, brands are commonly overlooking massive potential due to their misconceptions over the reality of the gaming industry.
GameAnalytics also reports that a game’s suitability is a key concern for advertisers, with brands only interested in high-quality titles with respectable content.
Brands may eschew hypercasual games due to their low budget and high churn rate, however hybridcasual games typically use advertising less frequently, astoo many in-game ads can lead to frustrated users who may be less inclined to see the advertised products favourably.
The report notes that many games are likely to be more open to advertising brands than other games, as this allows them to draw advertising revenue while lowering the risk of users leaving their titles to play those from competitors
With this in mind, The Drum reports that 81% of media buyers plan to increase their spending, with 93% of those surveyed planning to run in-game advertising by 2025. This suggests that advertisers are becoming increasingly aware of the significant possibilities of advertising their products in-game. GameAnalytics suggests that quality games and working with agencies and mediation platforms to educate brands on the possibilities of in-game advertising can help to attract attention, while the implementation of measurement SDK’s can help them track ad performance and gain confidence in the market.
