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Advergames: Cross Technologists and Story-tellers

Posted on Monday, Jun 13th 2005

Brand engagement takes on a whole new form, as Advertisers begin leveraging technology and computer gaming.

From the current Economist: Gaming: As young people spend less time watching television and more time online and playing games, advertisers have devised a new way to reach them. CROSS the popularity of a new medium with the demands of advertisers, and the result can be a whole new genre of entertainment. In the 1930s, the sponsorship of radio serials by makers of household-cleaning products led to the soap opera. Listeners were enthralled by episodic, melodramatic storylines, and advertisers were guaranteed a big audience. Today, the same thing is happening with another new medium. Video games have been crossed with advertising to produce a new genre: the advergame.

Adverfilms are already starting to show up in movie theaters, a Stella Artois sponsored series of short films being shown at the Landmark theaters being a good example. Advergames is a similarly powerful phenomenon that will draw budgets away from traditional print or television advertising, and focus it in on brand engagement mechanisms with orders of magnitude higher returns.

“Richard Schlasberg, a Coca-Cola marketing manager based in Hellerup, Denmark, says the beverage-maker, long a fervent believer in television advertising, is now siphoning funds from its TV budget to maintain a regularly updated suite of games. A 30-second prime-time slot on American television can cost half a million dollars, whereas an advergame rarely costs more than $50,000 to develop and can be posted on the internet for months or years. Mr Schlasberg notes that, with television, potential drinkers just stare, briefly, at Coca-Cola. With advergames, consumers are “actually playing you”, he says, and they then associate the brand with fun.”

$500,000 versus $50,000 – simple equation. More sophisticated Advergames may cost upto $500,000, since the other piece of the value equation still is a huge win: 30-seconds versus months / years.

Those who stand to gain from this phenomenon, like in Adverfilms and Edutainment, are still the most creative content producers. Opportunities also exist for business model innovations, whereby the content producer takes a fee for every click-through.

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[…] I had writtent a few pieces earlier: Screenwriters and the Electronic Gaming Bubble and Advergames: Cross Technologists and Story-tellers. In general, my thesis on the Gaming business is that the “title” financing model is trickier, whereas, “Advergames” is a very powerful, lower risk model, whereby the entire marketing muscle of a major brand can be behind a game. And if such games are nuanced towards “good”, then even better. […]

Sramana Mitra on Strategy » Blog Archive » Games For Good Sunday, June 4, 2006 at 8:20 PM PT