Stop me if you’ve heard this one: There’s a disconnect between how much time audiences spend playing video games and how much money advertisers spend on video games.
That disparity was front and center for the fourth consecutive time at the fourth-annual IAB PlayFronts, the trade organization’s dedicated event for the growing gaming ad channel, which took place on Tuesday.
While advertisers’ interest in gaming may be growing, their spending commitments seem stuck on pause, according to the IAB.
Back in 2023, an IAB study found that brands spend less than 5% of their marketing budgets on video games. Zoe Soon, VP of the IAB Experience Center, dropped the same stat this year in her PlayFronts keynote, suggesting gaming’s share of ad budgets is stagnating rather than growing.
Recent numbers from EMARKETER don’t paint a better picture. According to the forecaster’s March 2024 projections, game ad revenues grew by almost 25% in 2023 and accounted for 3% of US digital ad spend. But EMARKETER projects gaming ad revenue will grow by single digits through 2028, with the segment’s share of US digital spend hovering around less than 3% each year.
Meanwhile, audiences aged 13-24 spend 23% of their entertainment screen time gaming, those aged 25-34 spend 19% and those aged 35+ spend 10%, according to a recent study by MIDiA Research.
Innovation not moving the needle (yet)
Although gaming’s share of brands’ and agencies’ budgets may not be growing, it’s not for lack of innovation. At this year’s PlayFronts, several big-name companies touted new gaming partnerships and ad formats.
For example, Samsung unveiled a new gamified ad format called GameBreaks for its Samsung TV Plus FAST channel. The new format inserts a multiple-choice trivia game into ad breaks, complete with sponsored messages.
Another big name, Roblox, announced that its in-game video and display billboards will be sold through Google Ad Manager (GAM) starting later this year.
Roblox also announced at PlayFronts that it’s launching its first-ever rewarded video ads, which will also be sold through GAM. The move is being pitched as a way to buy Roblox inventory in a format and platform advertisers are already familiar with, said Ashley McCollum, head of immersive media solutions at Roblox, during a PlayFronts presentation with Google.
That strategy seems aimed at enticing programmatic advertisers who may have been put off by the complexities of running direct campaigns on platforms like Roblox or Epic Games’ Fortnite.
For example, although Roblox touts having about 83 million daily unique users (more than half of which are aged 13+), those users are spread out across many different individual user-generated games on the platform, Ryan Miller, director of partnerships at IPG Media Lab, told AdExchanger.
To get granular data insights from those individual games, marketers typically need SDK integrations with the individual game developers, Miller said. That means it’s currently hard for marketers to target some of gaming’s most premium inventory at scale in ways they might be used to on the web or via the major walled garden platforms.
So, streamlining the buying process and opening up more scaled programmatic opportunities could be a path to growth for the gaming channel, the IAB’s Soon told AdExchanger. While gaming remains mostly a direct-sold medium, she said, increased programmatic capabilities will be what really takes it to the next level.
And, in the meantime, the IAB is continuing to work on standardizing measurement for gaming media to help facilitate that programmatic transition, Soon said. During her keynote, she previewed that the IAB will release a new measurement framework to define standard metrics for different video game ad formats in Q3 this year.
Is gaming really its own channel?
Meanwhile, the IAB is reexamining its decision to break gaming out as its own channel while tracking the growth of dedicated gaming ad budgets, Soon said.
Consider that many gaming ad formats could easily fall into different media buckets. Roblox’s video billboards could be considered part of a brand’s online video budget. Similarly, the video overlays that companies like Overwolf place on streamers’ content could be part of the influencer marketing budget, or could be considered a form of social video. And efforts to reach gamers on their preferred social channels or in gaming podcasts could be considered social and audio campaigns.
“We’ve had this discussion with our members: Is gaming its own channel? Or is it a horizontal that goes across mobile, video” and other mediums, Soon told AdExchanger. “We’re starting to lean towards the latter, because if we want to get out of that experimental innovation budget, it’s probably better to be embedded in these other channels.”
So, perhaps counterintuitively, the best path to growing gaming’s share of ad budgets may be to find new ways to court existing video, social, mobile and influencer demand. In other words, leaning into how marketers already play the programmatic game may be more effective than trying to teach them new tricks.
