It’s going to be the best Christmas ever, for in-game advertising

The ‘golden quarter’ is usually exemplified by retailers and luxury brands throwing huge budgets at extravagant festive ad campaigns. But amid soaring Covid cases, national lockdowns and travel restrictions, rising unemployment and uncertainty over Brexit, advertisers have slashed marketing budgets by a record £723m (10.5%) this Christmas. 

Worst-hit is cinema (-66.1%), newspapers (-15.7%) and magazines (16.6%). But while the traditional media channels are facing a nightmare before Christmas, the in-game advertising sector looks on track to enjoy it’s best Christmas ever. 

With ad budgets, like all budgets, under increased scrutiny this year, marketers have been prioritising those channels that deliver the greatest impact. And at the top of that tree is mobile advertising – which has seen a 71% increase year on year with mobile gaming apps attracting the lion’s share of that spend. 

Before the pandemic, a third of the world’s population (2.5bn) regularly played mobile games. However, during the first six months of this year, usage of mobile games apps soared by 75%, downloads of new games rose by 45% and ad spend across all hyper-casual games genres leapt by up to 300%. 

This has helped put in-game advertising firmly on the radar of major advertisers. In recognition of this shift, global advertising agency Dentsu recently launched a first of its kind specialist gaming division, dedicated to helping brands engage with the fast-growing gaming audience. 

But in-game advertising isn’t just about unrivalled scale. It also allows advertisers to effectively target a diverse spectrum of audiences, especially those younger, harder to reach, cord-cutting generations like Millennials and Gen-Z. 

Gen-Z is of particular interest to advertisers as it accounts for a third of the world’s population and wields an estimated spending power of $143bn annually. However, this 25+ age group is known to shun traditional media and often deploy adblockers to protect their online experience.

The good news for advertisers is that they love playing mobile games. In fact, Gen-Z is more likely to use gaming apps than any other generation and spends nearly 20% longer in their most-used games. 

The festive period is already a season to be jolly for mobile games publishers and developers, with the surge in new mobile devices helping game downloads to skyrocket and app spending to exceed any other time of the year. 

But Christmas 2020 will be unlike any other. Pandemic-related restrictions are likely to mean that we’ll all travel less and see fewer friends and family. As a result, more than ever before we’ll all be firing up our favourite mobile games as we search for a little festive escapism. This, of course, is great news for publishers, developers and advertisers – as 2020 looks set to be the best Christmas ever. 

Not just for Christmas

While the surreal events of 2020 have certainly helped shine a light on the opportunity of in-game advertising, it’s important to note that in-game has been on the upswing for the last few years now. 

Its growth trajectory may have been boosted by Covid, but even without the pandemic brands and advertisers have been increasingly conscious of the effectiveness of in-game advertising. By the end of 2020, the mobile gaming audience is set to surpass the 3.5 billion mark, as is on course to hit 4 billion by the end of 2023.

The ability to target up to half the world’s population with a 30-second video ad or integrated brand placement, which costs a fraction of the price of a TV spot to create, makes in-game an extremely attractive proposition. 

As we start to leave this pandemic behind in the coming year(s), the mobile gaming experience is likely to improve considerably with the further rollout of 5G. Smoother, more technically capable gaming environments will only serve to add to the appeal of in-game advertising. As a result, 46.3% of mobile game developers have identified dynamic in-game advertising, where click-free non-intrusive ads are integrated within the core game design, as a key monetization opportunity for 2021. While more than a quarter of developers (26.7%) are planning on trialling dynamic in-game advertising within the next six months

While in-game advertising might be a relatively new addition to ‘golden quarter’ marketing strategies – its unrivalled scale and reach means it’s now a Christmas tradition that’s here the long haul.

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