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Is gaming the next huge advertising channel?

You must have heard that gaming is a largely untapped market. Despite its large and engaged audience, the gaming ad market, which is valued at more than $8 billion, is still less than 6% of the $139.8 billion total digital ad revenue market.

That being said, the change has already begun as advertisers have started unlocking the power of gaming as a marketing channel.

There are a few prominent reasons why gaming is predicted to scale as an advertising channel. Here we dissect a few of them:

Decline in television viewership

To date, television has largely been the winner here when it comes to reaching the masses, but it is only a matter of time until marketers realize the power of gaming when it comes to reaching younger audiences at scale. The data is enough proof of the same - Fortnite alone averages 937,500 concurrent players every hour. This number exceeds the full-day average audience for MTV, TBS and The Food Network combined.

Pre-covid v/s Post-covid

The post-covid and pre-covid world are different in various ways. When it comes to gaming, after covid, the gaming usage went up 115% compared to a typical day in a pre-pandemic world. This could be because of two reasons - gaming provided entertainment when broadcast sporting events were suspended, and a majority of Gen Z, millennial and Gen X found a way to stay connected to others and get through difficult times through the mode of gaming.

Gen Z - the ultimate gaming generation

Gaming is the most popular form of entertainment for this generation, followed by streaming music, web browsing, social media and TV. In fact, gaming is not just used to play the main game but also to hang out with friends.

The Metaverse

While the Metaverse is in progress, brands are realizing that understanding gaming will be crucial to stay up to date. Gaming consists of many of the characteristics of the next generation internet. It is no wonder that big names like Nike, Gucci, and Lego have already made their mark in the Metaverse.

Major ad-supported platforms are investing in gaming

Amazon acquired Twitch in 2014. In 2018, Facebook launched Facebook Gaming. In 2019, Snap launched Snap Games and Google rolled out Stadia, its streaming gaming platform. This year, Microsoft acquired Activision Blizzard for $68.7 billion. This pattern is an indication towards why gaming is the next big thing.

The rise of the attention metric

The interactive and fast-paced nature of video games means players and viewers give their undivided attention to game play. The process of marketers turning to eye-tracking technology to measure attention is already underway. In that world, attention will be to engagement what viewability is to impressions. And when this happens, gaming will outperform all other marketing channels.

Three things will be critical to the success of scaling advertising in gaming:

  • Retaining the “player first” ethos of gaming and getting the ad experience right. If this fails, there is risk of ad resistance and publisher willingness to integrate ad solutions into their games.

  • Buyer education and agencies promoting gaming to their brand clients will be of key importance when it comes to integrating gaming into buyer campaigns.

  • There needs to be consistent measurement standards that can be aligned to how buyers track and measure other media. Buyers need to be met where they are. In 2020, IAB launched its first Games and Esports Board to help address these challenges. In 2022, IAB PlayFronts will bring together buyers and sellers for the first time in a gaming marketplace.

What do you think - is gaming the next huge advertising channel? Share your thoughts with us in the comments below!

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