There’s an audience, and then there are gamers. Imagine someone so engrossed that even a fire alarm wouldn’t make them flinch. That’s who we’re dealing with here—dedicated, distracted, and delightfully obsessed. And if you’re in the advertising world, this should sound like a golden ticket.
Gamers are, by nature, a captive audience. But despite this, gaming ads aren’t the headliner you’d expect them to be. Why aren’t more advertisers making it rain in the gaming arena? Is there something inherently tricky about gaming ads, or is it just the industry still stuck in the tutorial level? Time to investigate.
🎮 Breaking Down the Game Plan: What Even Are Video Game Ads?
First, let’s get our definitions straight: Video game ads are like the special effects of the advertising world—they can be subtle, explosive, or completely in your face. They come in a variety of flavors:
Intrinsic Ads: These are the sneaky ninjas of in-game advertising. They’re ads seamlessly woven into the game environment, like billboards in your favorite racing game or a branded soda can your avatar guzzles after a marathon battle. They blend in so well that players might not even realize they’re being advertised to—at least, not consciously.
Rewarded Ads: Picture this: you’re one hit point away from losing your last life in Candy Crush. The game offers you an extra life—if you watch a 30-second ad for the latest superhero movie. This is bribery with a wink, and it works like a charm. Players watch the ad, get their reward, and everyone goes home happy.
Interstitial Ads: Ah, the showstoppers. These are the ads that pull no punches—they take over the entire screen during natural pauses in gameplay, like when you’re waiting for the next level to load or your opponent to make a move. Love them or hate them, they demand your attention.
Now, the idea of running ads in video games isn’t exactly new. But what’s changed? Why is the hype growing, and why are more brands starting to eye the gaming world like it’s the last piece of chocolate cake at a diet convention?
💰 Show Me the Money: A $100 Billion Power-Up
Let’s talk about the dollars and cents—or rather, billions and cents. According to the latest forecasts, video game ad revenue is set to soar by a staggering 5.7 times from 2017 to 2027. That’s a cool $100 billion increase in less than a decade. This is not just pocket change; it’s a tidal wave of cash.
But here’s the catch: While gaming ads are growing, they’re still just a slice of the overall pie. In the U.S., gaming ads represent less than 5% of the total internet ad spend. Sure, it’s still a sizable chunk for a “niche” market, but compared to behemoths like social media and CTV (connected TV) ads, it’s clear that video games are still fighting for a seat at the grown-up table.
🎯 Who’s Playing the Game? A Quick Demographic Dive
To understand where the money is going, you need to know who’s actually playing the games. In 2023, there were 3.2 billion gamers worldwide, with the U.S. boasting a particularly interesting mix—55% male, 45% female. These aren’t your stereotypical teenage boys in their mom’s basement anymore; the modern gamer is a more complex creature. You’ve got millennials who grew up with controllers in their hands, Zoomers who consider gaming as much a social activity as texting, and even Gen Xers sneaking in some mobile game time between meetings.
Mobile-Only Gamers: Here’s a twist—female users dominate the mobile-only gaming space, making up 55% of that demographic. Turns out, Candy Crush is a serious battleground, and it’s not who you think is playing. Gen X is also heavily into mobile games—possibly because they can play on their phones while pretending to be engrossed in their kids’ soccer games.
Millennials: The undisputed champions of gaming. They dominate every gamer type, from casual mobile gamers to hardcore e-sports competitors. And guess what? They’re also the ones with the spending power, willing to drop cash on in-game purchases like there’s no tomorrow.
🛒 Shopping While Shooting: The Evolution of In-Game Purchases
Remember when buying something in the middle of a game felt like an interruption? Not anymore. Thanks to the rise of microtransactions and in-game purchases, today’s gamers have fully embraced the idea of spending while playing. Whether it’s buying new skins, unlocking premium content, or snagging that shiny new weapon, purchasing is now as integral to the gaming experience as jumping over a chasm in Super Mario.
But why this sudden shift towards a ‘buy while you play’ mentality? Here’s a thought: The biggest generation in gaming, millennials, is hitting peak spending power, and they’re joined by a chunk of Gen Z who are almost allergic to traditional ads but don’t mind dropping $3.99 on a virtual hat. Add in the rise of mobile gaming—particularly popular among older generations who’ve learned to swipe, not scroll—and you’ve got a perfect storm of opportunity.
The numbers back it up: The global market for in-game purchases has grown by leaps and bounds, and it shows no signs of slowing down. So, if you’re a marketer, it’s not crazy to think that the number of in-game purchases will keep growing faster than a speed run at AGDQ.
📱 Mobile Gaming: The Jackpot No One’s Cashing In On
Now, let’s talk about the golden goose: mobile gaming. This is where the attention—and the money—are. Most gamers are playing on their phones, and it’s the most convenient place for ads. Yet somehow, ad spend isn’t matching the amount of time people are gaming. In fact, 10.9% of all mobile time in 2024 is spent on games, but you wouldn’t know it from how much is actually being spent on mobile game ads. What gives?
For one, there’s a lot of unused advertising space on mobile. Advertisers have been slow to realize the potential here. The real issue? Many find it trickier to navigate than an old-school text adventure. Between the complexities of scaling, targeting, and measuring success, gaming ads have been treated like the weird cousin who shows up at Thanksgiving—fun, unpredictable, but not exactly reliable.
🚀 Advertisers Are Starting to Get It—Sort Of
Let’s be real: Advertisers aren’t entirely clueless. Many are waking up to the untapped potential in video game ads. The stats speak for themselves: gaming is seeing some of the biggest budget increases this year, right after social media and online video ads. But there’s a caveat—about 10% of advertisers are also planning to cut back on gaming ads, citing the difficulty of planning and implementing them. Complexity is a killer, and for gaming ads to truly break out, the industry needs to make it as simple as ordering a pizza online (without the annoying upsells).
❤️ But Those Who Love It, Really Love It
Interestingly, those who’ve dabbled in the gaming ad world seem to be all in. According to the IAB, 78% of advertisers say gaming ads are great for brand awareness. Another 70% claim they’re perfect for driving post-purchase advocacy, and 65% believe they’re excellent for ROAS. It’s the marketing trifecta! So, why aren’t we seeing more big-budget campaigns flooding the market?
🎮 Loading… Advertisers Prepare for an Omnichannel Assault
Historically, gaming ads have been like experimental cocktails—fun to try but not the staple of any serious marketing menu. But as we move into the last half of 2024, there’s a shift happening. More advertisers are considering gaming as a valuable part of their omnichannel strategies. Agencies are starting to build out gaming playbooks, and DSPs like The Trade Desk and Xandr are getting serious about the space, which means lower barriers for entry on the buy side.
We’re also seeing the rise of partnerships between in-game ad platforms and verification vendors. Now, advertisers can measure viewability, completion rates, and performance metrics for in-game ads in a way that makes sense when compared to traditional media. According to Shahar Sorek, CMO of Overwolf, “Campaign metrics like brand awareness uplift, brand consideration, and purchase intent are now a thing across the board.” So, yes, gaming ads are growing up and starting to dress like adults.
⚡ It’s All About the Metrics, Baby
Thanks to new in-game measurement guidelines from the IAB and MRC, gaming ads are finally beginning to unlock larger budgets. These advancements—combined with better targeting, attention measurement, and media-quality verification—mean that advertisers are getting more confident about diving into the gaming waters. It’s no longer a question of if gaming ads will become a staple, but when.
And here’s where it gets interesting: the big game-changer might just be those pesky little DSPs. With platforms like The Trade Desk and Xandr lowering the entry barriers, advertisers can now buy gaming inventory with the same ease they do for display or video ads. Partnerships with verification vendors like Integral Ad Science allow advertisers to compare their in-game ad performance directly against other channels. Finally, you can justify your gaming ad spend to the CFO without breaking into a cold sweat.
🏁 The Final Level: What Comes Next?
As we zoom through the last half of 2024, the future of video game advertising looks like it’s leveling up. The money is there, the audience is primed, and the potential for growth is practically staring us in the face. Advertisers who figure out how to navigate the complexities of the space—whether it’s through smarter targeting, better metrics, or just sheer stubbornness—stand to gain big.
So, to all the brands hesitating at the starting line: Pick up the controller. It’s time to move from tutorial to the main campaign. Your audience is waiting.
