By Samuel Huber, CEO and Co-Founder of Admix
Social media has been the dominant media channel for around a decade, and for good reason. The sheer size of social media platforms’ audiences (Facebook alone counted 2.7bn users) and the rich data they collect have created an advertising bonanza. From incredibly granular targeting of Facebook banners and social video ads to Instagram micro-influencers, advertisers have never had such privileged access to the audiences they want to reach. Within total advertising spend in the US of around $240bn, last year $40bn went to social media platforms and another $15bn to social video, and yet more to mobile-first social platforms. More than 90% of US companies use social media for marketing purposes.
Ad spend by brands within video games is a mere 2% of the amount spent on social media. The reasons for this are numerous, with advertisers typically unaware of inventory beyond major console hits, fears over interruptive and non-brand safe ad formats and content, and difficulty measuring the ROI of advertising dollars spent in-game. The dominant forms of in-game advertising until now – rewarded video, interstitials, banners – are indeed interruptive, pulling users away from the content they are enjoying in a way that is perhaps only mirrored on social media by pre-and mid-roll video ads. Yet changes to how we advertise, socialize and perceive the value of our personal data means social’s hegemony is about to be challenged.
As mentioned above, a huge part of the success of social media as a media channel has come from its ability to turn personal data into targetable insights for advertisers, impacting everything from the things we buy to the political leaders we elect. Regulation is now catching up, along with people’s understanding of privacy and the way their data is monetized. With 47% of internet users worldwide now using an adblocker and Apple implementing huge changes to how its customers’ personal data can be used by advertisers, the most common targeting and tracking practices used by advertisers are under threat.
Naturally, many games publishers have made the most of third-party personal data too, but they’re much better positioned to adapt to the cookieless world. With transparent consent workflows, games that have built trust with their player bases can continue to collect rich first-party data. Games also typically generate lots of contextual data – they have a very good sense of who plays their games without personal identifiers. The growing popularity of emergent formats such as In-Play, which injects ad creative directly into the existing code of games and therefore doesn’t interfere with player experience, also sets the games advertising ecosystem fair to lead the cookieless future.
Social trends also point to a rebalancing of our attention away from what we typically think of as social media. The Covid-19 pandemic has accelerated shifts that were already underway, particularly when it comes to how we interact with friends and family. Gaming platform Roblox’s current market cap is approximately $39bn following a successful IPO last month, while investors plowed $100m into digital hangout Rec Room at a valuation of $1.25bn. This reflects how drastically Gen Z, 90% of whom identify themselves as gamers, are eschewing longstanding social media such as Facebook and Twitter in favor of digital worlds that they can build, socialize and play in.
Some brands are well aware of the engagement opportunities of the metaverse – these digital worlds that run parallel to what Millennials and Gen Z refer to as ‘IRL’ – in real life. Brilliant campaign activations include Moschino x The Sims, Gillette Venus x Animal Crossing, Star Wars x Fortnite. As the lines between the metaverse and IRL become increasingly blurred, brands need a way to replicate this engagement cost-effectively and on a far greater scale.
While the In-Play movement eliminates several of advertisers’ concerns with gaming (it’s non-interruptive, can be bought programmatically), its biggest sticking point has been proving that millions of real, engaged people are viewing ads as they enjoy gaming experiences. The tools for verifying the eyeballs on digital and social media advertising have existed for a long time – but measuring the attention captured by a native roadside banner as a player pilots their sports car through a digital world is no mean feat. It can be done, however, and this week we have seen the first verification of In-Play advertising by a respected industry body.
Video games have sometimes thrown players into fights called ‘unwinnable battles’ – fights that are designed to move the narrative along or show the player who’s boss. To this point, for premium advertisers and brands, reaching gamers has been something of an unwinnable battle against a three-headed beast of interruptivity, brand safety and measurement. There are no silver bullets, but the odds and the advertising dollars are rapidly shifting away from social and towards gaming in their battle to be the pre-eminent media channel. The 2.7bn gamers worldwide (yes, Facebook, that’s right!) are now truly In-Play.