“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is by Ionut Ciobotaru, co-CEO of Verve Group.
The latest wave of consolidation among gaming and ad tech players has the industry talking about upcoming advertising opportunities. But this moment isn’t just about advertising in more places. It’s about fundamentally understanding and connecting with consumers across all the channels they care about in ways they deem most valuable.
Microsoft’s acquisition of Xandr and its subsequent purchase of Activision were the multibillion-dollar bits of news that got the real conversations started. But in truth, the ball had already been set in motion by others, including Zynga, AppLovin and ironSource. So why the flood now? Is it a tech play? A media play? A data play? Yes, yes and yes. But more than anything – it’s a consumer play.
As with any massive media shift – and make no mistake, a massive shift is underway – the marketplace drivers are multifaceted.
Everyone is a gamer now
Do all of today’s trend conversations have to start with the effects of the pandemic? I’m afraid so. In this case, it’s unavoidable. Everyone went home for two years, and yes – people started gaming more, including some unlikely demographics. It would have happened over time no matter what. But the pandemic accelerated the trend. As Eric Seufert writes, this is particularly notable in terms of the growth in capital availability for upstart gaming companies and projects that we’ve seen during the pandemic.
Importantly, more gamers have entered the fray, and they’re playing in more ways than ever. Just look at Wordle or Axie Infinity. And, no doubt, brands want to meet these audiences where they are and in ways that make sense for everyone.
Gaming just keeps getting bigger
As a form of entertainment, video games are now bigger than movies and sports combined. And it’s not just the money that people are spending on games. It’s the time that people spend playing games. That makes video games super-interesting from a mass media standpoint. Speaking of mass media…
The channel crossover is breaking existing models
For a long time, we’ve spoken of gaming in a fragmented fashion: console gaming, PC gaming, mobile gaming – you get the picture. But that language is becoming dated. Now, it’s just gaming, and it’s multi-channel.
If you want a recent parallel, just think about the way we watch TV. For a long time, we’ve talked about linear viewers, OTT viewers, CTV viewers, mobile viewers – the list goes on. But viewers don’t think of themselves that way. They just want their content whenever they want it and on any device.
They also want to decide how they pay for their content, whether via a subscription or with their valuable attention to ads. It’s been up to broadcasters, platforms and media owners to give consumers the flexibility they want – and they have. Now, it’s up to gaming companies to do the same.
All companies need to get closer to consumers
As gaming companies and ad tech companies come together to enable and monetize the growing and converging world of gaming, they’re doing so in a landscape where identity is becoming scarcer than ever. They need to own their customer relationships bean to cup. They need to be able to keep their data within their own fortresses while making it multi-channel-aware.
This is where the ad tech play is so important.
Remember: Ad tech is about more than just serving ads; it’s about understanding consumers and context and building appropriate experiences. It’s not just monetization – it’s user acquisition, retention and engagement. It’s about being able to handle all of this in-house in a privacy-first, customer-centric way.
Getting in on gaming
The walls of the gaming universe are expanding and morphing and so, too, are the business models built around them. The IAB, for example, is deepening its focus on educating buyers about the fundamentals of in-game advertising. At the same time, gaming remains sacred ground to gamers, which means the advertising equation built around it will require thought and constant evolution.
By blending the worlds of gaming, marketing and first-party data, companies are in the best position possible to meet the high standards of their customers – and the payoff will be worth it.
You thought CTV was going to be the advertising trend to trump all trends in 2022? Just wait till you get a load of gaming.