Why Isn't It the Year of Gaming?

For 10 years we heard it was the quotYear of Mobilequot In some years industry titans like Sir Martin Sorrel the then Global CEO of WPP would claim it39s not the year of mobile yet The topic became a bit of an industry joke But not all were laughing There was serious revenue to be hadThe definition of the quotYear of Mobilequot was when mobile advertising revenue started to be quoton parquot in terms of budget allocated for Internet media and time spent by users on Internet mediaI am a big fan of Mary Meeker as she has focused the industry on the innovation and growth topics that drive the development of the digital economyRecently Nicole Ortiz from AdWeek posted an article quotInfographic consumers want to see more brands in the esports realm not enough ad spend is being funnelled into the categoryquot showing the disparity between time spent versus marketing dollars being spent The graph is shown hereThis is a great analysis and starting point to understand the gap and opportunity between time spent in the gaming channel and the other highly invested media channels of TV and StreamingTo really understand the advertising revenue opportunities for video game developers we should also compare media buying opportunities with similar creative formats targeting opportunities and buying methodseSports is the most hyped media opportunity in the gaming space a popular topic in the press and with advertisers because it39s easily understood It has wellproduced content highlighting professional career opportunities for an individual similar to sportsSome might want to compare the total eSports marketplace in our analysis but that would be the wrong approach The 11 Million forecast from NewZoo includes sponsorships media rights publisher fees merchandise tickets digital and streaming Only a small percentage of revenue goes to the game developer and can be associated with the advertising market comparables In 2019 NewZoo forecasted the eSports ad revenue to be 1892 MillionIngame advertising is a more straightforward approach to measuring the video game advertising revenue opportunity quotThe global InGame Advertising market size is estimated to grow at CAGR of 20 with Revenue USD 1097 bn during the forecast period 20202024quot according to Industry Research The report is a great start to understand the significant opportunity in the video game advertising space However the report is limited to the scope of understanding of the total future market opportunityHere39s why it39s limited The existing ingame advertising marketplace is defined by placements like rewarded videos interstitials and playables These video game media placements do drive revenue opportunities for game developers especially in the freetoplay categoryThe current ingame opportunities ads around the game environment like rewarded videos interstitials and playables are underindexed relative to the time spent playing video gamesHowever this is not the end of the story It39s the beginning for the game developers There39s a bigger piece of the pie to grab for game developersOn average video gamers spend six hours 20 minutes each week playing games according to Limelight Networks Although gamers are very open to advertising according to a recent NewZoo study while gamers are spending time playing video games they do not appreciate the game being paused or disrupted with advertising contentFor advertisers and game developers the big opportunity is to connect with the gamers while they are playing the game by leveraging intrinsic ingame advertising Intrinsic ingame advertising are ads that are placed in strategic locations within the video game itself One example of an ad space is a singlesided virtual billboard with advertisements easily and intrinsically placed within game environments without interfering with performance or experience It is similar to ads on the internet or mobile web but it39s in the gameCurrently the global display advertising revenue is 1794 billion which is a bit more than half of the overall global online media spend for 2020The new capabilities afforded to place ads inside of the game itself opens up a brandnew revenue stream The global advertising revenue opportunity for game developers is significant and it39s only going up The Myers Report reinforced this trajectory with the forecast that the video game advertising industry will grow at an annual rate of 60 to 30 billion in 2025Advertisers will have the opportunity to reach consumers in a meaningful contextual way during those six hours and twenty minutes each week people are playing video games And just so it39s clear the gaming audiences across all age groups is massive In the US alone according to the ESA quotMore than 214 million people in the United States today play video games one hour or more per week 75 of all US households have at least one person who plays In sum 64 of US adults and 70 of those under 18 regularly play video gamesquotIn 2017 Mary Meeker said quotGlobal Interactive GamingMainstream Evolving Rapidly Still Early Daysamp8230quot In 2018 Mary didn39t highlight gaming In 2019 Mary Meeker wrote quotInteractive Gamingamp8230Increasingly Relevant Way to Communicatequot with a bit of a nod to time spent watching gaming Why isn39t it the year of gaming What39s it going to take for the advertising industry to join the gameClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

SUBSCRIBE FOR FREE MEDIAVILLAGE CONTENT | BECOME A THOUGHT LEADERSHIP CONTRIBUTOR

Why Isn't It the Year of Gaming?

Author

Publish date

Channel

Cary Tilds

We Are the Outliers - By Jack Myers

More Videos:

SUBSCRIBE FOR FREE MEDIAVILLAGE CONTENT | BECOME A THOUGHT LEADERSHIP CONTRIBUTOR

Why Isn't It the Year of Gaming?

Enjoying This Commentary? There's More to Love

Cary Tilds

Stay in the know with more from MediaVillage

TAGS:

We Are the Outliers - By Jack Myers

Cookies