Media buyers sold on in-game advertising, but hugely underestimate size of market

Admix: surveyed media buyers
Admix: surveyed media buyers

Survey of 400 media buyers in UK and US by Admix finds many still consider gaming a 'grey area'.

Almost all buyers at media agencies plan to spend on in-game advertising within the next four years – but many are still failing to grasp the size and nature of the opportunity, a study by gaming adtech company Admix has found.

In a survey of 406 buyers in the UK and US, 93% of respondents said they expected to spend on in-game advertising by 2025. Over the next 12 months, 41% said they planned to increase in-game adspend, with a further 40% maintaining current levels.

But there is still reticence from some about gaming as a media channel – 31% of those polled called it a “grey area”, while a fifth cited lack of understanding as the biggest reason for not investing in in-game advertising.

The survey also found that most buyers significantly underestimate the size of the global market. More than half said they thought the number of gamers worldwide stood at between 100 million and one billion, with a third giving a figure from 100 million to 500 million, and 27% saying it was between 500 million and one billion. In fact, data from Newzoo suggests that three billion people worldwide play games, with 2.8 billion of these playing on mobile devices. 

When it comes to the amount spent by gamers – which was $165bn (£121bn) in 2020, according to Pelham Smithers/Visual Capitalist data – buyers were closer to the mark, with 34% believing the figure to be between $100bn and $500bn, and 37% saying between $10bn and $100bn.

Of last year’s total spend, just over half ($85bn) was spent on mobile gaming, and this figure will rocket to $120bn this year, according to AppAnnie.

However, Admix’s research indicated that media buyers have a somewhat confused attitude to mobile gaming, specifically in regard to whether it offers “premium” inventory. When asked generally, 60% of respondents said that console gaming – at $33bn, a market less than half the size of mobile – offered more premium inventory than mobile. 

But when this was broken down, a conflicted picture emerged: casual mobile games were seen as offering premium inventory by 33% of buyers, slightly higher than for PlayStation (32%), Xbox (31%) and PC (29%).

This apparent contradiction could be because “the advertising industry has never settled on a definition of premium that we can all buy into, let alone a definition of premium video games inventory,” Admix suggested in its report. 

“Does inventory need to reach only the wealthiest audiences to be premium? Or is it more about easy-to-implement campaigns? Viewability? How about ROI? Is the same gamer less premium when they play on mobile than when they play on console? 

“Is premium inventory simply inventory that reaches consumers with relevant creative while they are engaged in an activity they enjoy – without breaking that enjoyment?”

The report also identified confusion about terminology. In its survey, Admix told respondents that in-game referred to “ads which seamlessly integrate into the gameplay experiences” such as virtual billboards. These are offered by companies including Admix, Bidstack and Adverty.

However, a third (32%) of respondents associated full-screen interruptive ads with in-game, while another 30% associated optional video ads that provide a reward (such as an upgrade) to the player with in-game. Meanwhile, 80% said it was important that advertising in games should not be disruptive or intrusive to players, with 36% calling this very important.

The study also revealed a gulf between the US and UK. Almost a quarter (23%) of US buyers said they weren’t spending on in-game advertising due to resistance from clients, compared with only 9% in the UK. Half (52%) of UK buyers said clients were specifically asking for in-game activity, while in the US, it was only a third (33%).

Samuel Huber, chief executive and co-founder at Admix, said: “With over three billion gamers generating hundreds of billion dollars in annual revenues, it’s impossible to ignore video gaming as the next key media channel. Indeed, it’s no surprise that Netflix sees Fortnite as a bigger competitor than other video on-demand platforms. 

“But while media buyers are certainly aware of gaming’s potential as a media channel, it’s clear from the findings of this survey that they’re less certain about how to access it. Gaming is still a massive, intangible opportunity in the minds of many advertisers. Education is needed, therefore, to give them the knowledge and confidence they need to access it in a meaningful way with in-play; and reap the rewards it represents.”

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