What the market will bear

Advertising 101

For everyone fortunate enough to escape multiple years of business school whilst obtaining your college educations, I'm going to spend a minute cramming your heads full of advertising knowledge.

Many of the concepts behind IGA are actually stolen from two other forms of advertising - internet advertising and television advertising. Each has offered its own benefits based on the medium - one digital and interactive, one passive but visually engrossing.

The concept of internet advertising has donated the concept of geo-targeting. When reaching worldwide audiences, it's important to make sure that the products and services offered are not actually for an area that the viewer can't collect on - that's a waste of bandwidth and it guarantees a non-sale. The net has also provided the benefit of digital experiences - advertising can be changed based on who's paying now and for what, meaning that a company which doesn't keep up the payments can find its product no longer represented.

Television, on the other hand, has loaned some different concepts. Product placement is a very common (and rather underhanded) move in both movies and television, and it can be sold easily because it holds a one-time fee. These adverts can't be targeted because they're recorded into the original material, so they have to be applicable to a general audience and selected to have some sort of realism impact. For instance, any MythBusters fan will be able to agree that Grant (the robotics guy) is not likely to actually use AOL as his search engine - such placements look phony and break the feeling of witnessing something really happening instead of something scripted.

There's some static on the line

The concept of internet versus television brings up an important difference in video game advertising - static versus dynamic ads. Things like product placement constitute a static ad, which has a certain appeal. As mentioned, it's a one-time fee, which means that for an advertiser it's an easy figure to swallow. For a publisher, it provides an immediate cash injection, rather than an aggregate cash flow. If we look at Ubisoft's Splinter Cell: Chaos Theory again, the Axe ad is static. No matter what country or when you buy it, you'll see this product.

Static ads have a "break even point" where the cost for the ad is paid for. If sales of the game do well, a company receives more eyes viewing it than they ended up paying. If the game sales are abysmal, an advertiser may find that he or she gave the publisher more money than the return interest warranted.

In contrast, dynamic ads favour an advertiser. The advertiser purchases so many "views" of a particular product, and the ad will run until that number of views is exhausted. This is the concept that most websites run on, and is very successful for time-dependent advertising. Let's take Second Life as an example: there are posters and signage in several places that advertise movies. If a movie is already released, the advertiser can instead purchase new advertising for a separate film, or discontinue it altogether.

Though this ad favours the advertiser getting his or her money's worth, it rarely allows for much more. Because ads are paid "per view," they require constant upkeep and payments to keep them in the public eye. Contracts are only for finite views, so even if the game ends up selling like crazy, an advertiser is only afforded so many pairs of eyes.

The world is a target

We briefly touched upon the concept of geo-targeting above, which many of you will immediately recognize requires some level of personal information like your IP address. This is indeed a unique identifier and can tie you individually (roughly) to the particular experience, and it has privacy activists everywhere throwing fits. Is your data collected?

Well, yes and no. The truth is, much like Google, IGA is something called an "above-line" advertisement strategy. The information is collected to target the ads in the first place, but then it's stored to be combed through on a macro level to develop statistics, nothing more. Believe it or not, nobody that is participating in this type of advertising wants your home address or cares what music you listen to after your game is shut off - the concept of "spyware" is a bit of a misnomer.

In-game advertising (at least in its current form) is no more dangerous or personally identifying than typing something into your favourite search engine. The information is only useful from a much wider angle than "below-line" advertising, which seeks to form some level of personal rapport with the viewer or initiate contact. In fact, IGA even offers some benefits to programmers - THQ recently discussed that in-game advertising that records viewing angle and time allows the company to look at weak level design. If you're staying too long in the same place, whether using it for a locational advantage or stuck due to a faulty map, the company can evaluate that and either offer patches or reconsider its future designs.