How to Win Millennials With In-Game Advertising in 2020

Do you recall the ads you saw when you last opened your browser? Almost no one does. With increasingly more ads on all platforms, people have become blind to advertising. At the same time, non-traditional channels like gaming are growing quickly, creating untapped opportunities to reach a new generation of customers who are more receptive to experience than intrusive advertising...

The death of traditional ads

Younger generations represent the biggest opportunity for advertisers and yet they are struggling to reach them, let alone engage them. These generations were born in an online world saturated with ads; as a result they have grown blind to advertising. 84% of millennials admit they do not trust advertising, and 51% of Generation-Z are using adblockers. Traditional, outdated advertising techniques do not work anymore, and advertisers are scrambling to find new channels to reach these users via a less intrusive approach.

It has also been shown that Millenials and GenZ are more sensitive to experiences than an immediate call to action. It’s very important for them to be able to relate to the brand and feel like it represents them well. This is why experiential marketing works so well – by taking consumers through a journey, brands are able to create an emotional relationship that serves them later on when the consumer is further down the funnel.

This search for experience also translates into their behavior online. Only 9% of GenZ are naming Facebook as their favorite social platform. Instead, they spend more time interacting with 3D experiences, such as games, whether it is to play or to communicate. 200M people between 18 and 35 are playing Fortnite monthly, which has become the MSN messenger of the new generation.

Across the world, more than 1.5B people play games daily, and at $160B a year in revenue, the gaming industry has become larger than the movies + music industries together. Gaming is the new entertainment.

Within gaming, immersive technologies like AR and VR have also developed steadily, and 2019 was the first inflection point in its growth. The Oculus Quest, an all-in-one device for less than $400, has been selling out since its launch. And by 2020, over 1B phones in circulation will support AR, spearheaded by social platforms like TikTok and Snapchat. In 2019, e-sport has also seen over $1B in sponsorships and hundred of millions of streamers worldwide. Content creators within these emerging channels are trying to figure out profitable business models, create huge opportunities for advertisers to engage this new audience in ways specific to the platform.

Games are not new to brands, but the way they advertise there, through banners or interstitial videos, is rather intrusive and outdated, which doesn’t engage the new generation well. Historically, these ads have been all about performance and driving downloads, which means these advertisers focus on increasing click-through rather than crafting the best experience.

The opportunities to reach the gaming audience are also limited. Since ads are intrusive and affect user retention negatively, game publishers rather rely on in-game mechanics to generate revenue. So while advertisers are realizing that gaming is a genuine channel to engage audience at scale, they are lacking tools to engage these users in a proper way. 

The in-game opportunity

But these tools are now available. For the first time, brands can actually advertise within the games, in ways that do not intrude or interrupt the users. In-game ads are more similar to product placements: a billboard in the street, or even a 3D product like a branded car in a driving game. Because in-game ads do not affect user retention negatively, game studios are starting to adopt the technology, which will further extend the opportunity for advertisers.

In-game ad platforms like Admix (disclosure: my company) provide the game developers an SDK to create their in-game inventory by tagging areas of their games. It then aggregates inventory from hundreds of game publishers and makes it available programmatically on most advertising exchanges or demand-side platforms. From there, advertisers can create campaigns, as usual, select standard creative formats, and start reaching users in-game.

If they want to take it further, the brand can use the Admix studio to create more advanced 3D creatives. Taking the example of a shoe brand like Converse or Adidas, the advertiser can ‘program’ what happens when users actively look at a shoe and set up the ability to assign this shoe to their avatar. Instead of a disjointed layer competing for user attention, advertising becomes a part of the story, delivering an experience for the end users, money for the publishers and high engagement the advertisers. Win-win-win.

During the last 12 months, 5,000 advertisers have used our programmatic platform, from National Geographic to Universal and State Farm. Brands from across all verticals and countries are targeting millennials and Generation-Z in-game and found great success. In-game, impressions only count when the ad is visible on the screen, which is a re-assurance for advertisers to only pay for ads that reach their users.

In-game ads are also the closest advertising format from experiential marketing. It enables the creation of memorable experiences in-game, while the consumer is highly engaged. Seeing a whole football stadium taken over by your favorite sneaker brand, or billboards for crips within an adventure game, is certainly impactful. Uber followed that principle to reach young professionals in-game, later to be retargeted via traditional ads on other platforms. 

At a higher level, in-game is what the advertising industry needs – more user-friendly units that contribute to build brand equity, not just drive clicks, and bring ‘art’ back into the world of advertising. As the gaming industry continues its rise to mainstream, and everyone in the world engage with games one way or another, we believe non-intrusive ads will make their way to the media plans at scale.

If you're an advertiser today, you need to consider in-game seriously to stay ahead of the curve!

I am the founder of Admix, monetisation platform for the next generation of entertainment: games, esport and XR. We are funded by top European VCs. To stay in touch with me, follow me on Twitter @samhuber or checkout my personal website samhuber.com.