Game advertising to grow 33pc year on year

29 Jun 2007

Advertising in video games is set to grow at a compound annual growth rate (CAGR) of 33pc over the next five years, according to a report from Parks Associates.

Game advertising spending in the US will grow from US$370m in 2006 to more than US$2bn in 2012, the company predicted in its report Electronic Gaming in the Digital Home: Game Advertising.

“Advertising in electronic games had an average monthly household expenditure of less than 50 cents in 2006 while broadcast TV was at US$37, meaning advertisers are not using the gaming medium to its full potential,” said Yuanzhe (Michael) Cai, director of broadband and gaming, Parks Associates. “If executed correctly game advertising can provide a win-win solution for advertisers, developers and publishers, console manufacturers, game portals, and gamers.”

In-game advertising will experience the highest growth rate among the various categories of game advertising methods forecasted, increasing from US$55m in 2006 to more than US$800m in 2012. Specifically, dynamic in-game advertising (DIGA) in PC, console, mobile and casual games will grow from 27pc of the in-game advertising market in 2006 to 84pc in 2012.

“DIGA offers several unique advantages such as timeliness, scalability, measurability, and flexibility,” Cai said. “But the industry will also have to address several looming challenges including lack of economy, lack of industry standards and media fragmentation.”

By Niall Byrne