Google Ads lets you create campaigns using conversational AI

You can now create Google Ads campaigns with Google AI-driven chat directly within the Google Ads interface. This new feature allows Google AI to do some of the heavy lifts (or at least get you part way there) with AI, all via chat. Advertisers, have no fear! You’ll be able to edit the assets generated by AI before going live.

Google Search Generative Experience integrates Search, Shopping ads

We learned of Google’s Search Generative Experience (SGE) just two weeks ago at Google I/O. In the demo, all ads were located outside of the conversational chat. That’s now changing. Google is working to directly integrate ads into Search Generative Experience. This is still an experiment, but we can get a glimpse of what’s to come for the eventual monetization of SGE.

Google PMax adds generative AI to create text assets, images

Google’s newest campaign type will soon be offering an even more automated experience with Google AI baked into the campaign setup process. Furthermore, image creation using generative AI will be included to help generate creative for these image and video-heavy campaigns. An enhanced goal and a brand new goal will also aid you in steering PMax efforts toward your ideal customers.

Dig deeper: Campaign tracking in GA4: How to ensure your links are properly tagged

Google Ads will create AI-powered assets that target search queries

Automatically created assets will soon gain more relevance thanks to Google AI. Instead of building assets pre-auction, with these new features Google AI will be able to generate assets based on the user intent of an individual query.

Are you getting the most from your stack? Take the 2023 MarTech Replacement Survey

Google Product Studio brings AI-generated images to advertisers

With Google’s new Product Studio tool, merchants will be able to manipulate product photos edit, enhance or sharpen photos via Google AI. Product Studio will allow you to create dynamic backgrounds or remove old unappealing ones and even sharpen low-resolution images.

Google: Merchant Center Next to replace Merchant Center

Google Merchant Center will be replaced by 2024 by Google Merchant Center Next. This simplified home for product feeds can leverage your website data in the feed creation process to remove some of the harder, technical work for less savvy merchants. Also, an improved UI as well as insights in the Performance tab look to enhance the experience within the platform.

7 new Google Ads features include Brand restrictions in broad match, AI in Smart Bidding

Lastly, a handful of tactical elements are coming to your Google Ads account that features better insights, more tools to guide Google around brand restrictions as well as, you guessed it, AI and LLMs in Smart Bidding.

Why we care. While this Google Marketing Live was heavy on AI, it isn’t forced. The AI is shown to be rolling out in a way that will help with the heavy lifting that advertisers face, rather than replacing all of the work. Overall, these changes should majorly help to save time and give better control with steering automated campaigns.

The post Google Marketing Live 2023: What you need to know appeared first on MarTech.

It is projected to rebound to 11.2% growth in 2024, the forecast said. Yearly increases in digital ad spending are predicted to hover around 10% through 2027.

Digital ad spend saw a dramatic rebound in 2021 following the initial wave of the COVID pandemic — when it saw growth of 37.6%. In 2022, the numbers fell to back to earth with 10.6% growth.

Digital slice of the pie. Overall media spending is only expected to increase 3.8% this year as traditional media investments continue to migrate to digital.

Digital media should make up 74.6% of total U.S. media spend, which is expected to reach nearly $264 billion in 2023. The digital slice of total media spending is projected to grow about 2% annually in the coming years.

Display and CTV. Connected TV (CTV) advertising keeps charging ahead.

To give some perspective, over half (55%) of digital spending is in display ads whose revenue is expected to grow 7.9% this year. CTV’s projected growth for 2023, however, is 21.2% — nearly triple digital’s growth.

CTV ad spend is on pace to hit $25 billion this year and account for 9.5% of total digital ad revenue, according to eMarketer.

Social display, on the other hand, is projected to see a growth increase of only 3.4% in 2023. Social network display advertising is about a quarter of total digital spending.

Dig deeper: Why we care about CTV and OTT

Search and retail media. Paid search represents 41.8% of total digital spending and should reach $110 billion this year. If it does, its growth will remain slightly higher than digital overall, at 8.2%.

Within search, retail media networks (RMNs) are a rising star, with 18.7% growth in retail media search. This segment is projected to be near $30 billion in spending in 2023.

RMN digital ad revenue (not just in search) is on course to rise from $31 billion in 2021 to $45 billion this year. If spending continues at its current rate it should surpass $106 billion in 2027.

Dig deeper: How Home Depot and Kroger use RMNs to improve shopper ad experience

Why we care. The long view from these numbers shows that digital advertisers are pumping the brakes following a remarkable rebound in 2021. A more modest rebound may also in the cards for 2024.

Outliers to this narrative — CTV and RMNs — show that regardless of overall trends, there is a marketing imperative to meet customers where they are. When TV watchers cut the cord and shift to streaming services, brands have to shift their budgets accordingly. They are also taking advantage of RMNs that provide new opportunities for brands to get closer to customers when they are shopping.

The post Digital ad spend growth drops to 7.8% this year appeared first on MarTech.

It’s a chance for digital publishers to show how they are capturing audiences who cut the cord and now choose digital channels. They also want to convince advertisers that their platform innovations and programming are the best way to connects with viewers, especially younger ones.

U.S. digital video ad spend grew at almost twice the rate of overall digital media in 2022, 21% versus 11% overall, according to the IAB.

“Against this amazing backdrop of opportunity we should make no mistake — we are living in challenging and unpredictable times,” said IAB CEO David Cohen, in his opening remarks. “There is a lot at stake and a lot up for grabs.”

Why we care. Presentations at NewFronts make a convincing case that video has earned the attention from brands that television gets with their upfronts — presentations that broadcasters make to advertisers in the spring about upcoming programming. Audiences are moving to streaming services for traditional TV content like movies and sports. Younger viewers who never watched TV regularly are also spending time viewing short-from video content and playing games on their TVs and phones. Marketers have to follow this space in order to meet many of their customers where they are.

The NewFronts. “Despite today’s marketplace being 24/7 and 365-day experience, NewFronts provides a singular moment in time for buyers and sellers to meet and discuss planning for the remainder of the year and next,” Cohen told MarTech. “This is a business built on relationships and we know how important it is to bring the industry together at key times of the year.”

He added, “The video landscape has drastically changed, and ad-supported streaming is reaching a place of maturity. IAB NewFronts has solidified itself as a must-attend event for brands and agencies that are looking to understand where to place their video and streaming budgets. It has evolved into more than just a showcase of content, but a place where real dollars are transacted and real discussions are had about innovation in streaming.”

Samsung Ads. Samsung’s free ad-supported (FAST) service, Samsung TV, is a good example of how digital video is stepping up to deliver premium content in a fragmented landscape.

In their May 2 presentation, Samsung TV announced it’s adding Conan O’Brien TV as a channel to its FAST lineup, as well as expanded local news and weather content. For gamers, Samsung also announced partnerships with video game streamers Antstream Arcade and Blacknut for free ad-supported games.

Three-quarters of U.S. households have at least one Samsung device, including many smart TVs. Smart TV owners can access Samsung TV free to watch programming, play games and navigate to other subscription streaming apps. This gives Samsung Ads device-level data on TV viewers that other video publishers don’t have.

Dig deeper: How Home Depot and Kroger use RMNs to improver shoppers’ ad experience

“We have the number one TV viewing data set globally, which means our TVs provide more consumer viewing data than any other manufacturer by almost double,” said Sang Kim, EVP and GM of North America service business at Samsung Electronics. “This means that we have the number one addressable footprint in the U.S.”

Samsung Ads announced a new partnership with KERV Interactive to make ads on the platform shoppable and interactive. Earlier this year, Samsung Ads launched the ability for advertisers to run QR codes with ads.

They also announced the rollout of digital out-of-home (DOOH) ads later this year, which includes connections to in-store retail partners. This provides an alternative or supplement to brands who are advertising to customers through retailer-owned retail media networks (RMNs).

Amazon Live, Prime Video and Freevee. Amazon’s FAST streaming service Freevee announced it will debut new original programming in 2024, including “Mock the Week,” a panel show produced by comedian Trevor Noah.

Prime Video, which debuted Thursday Night Football last season, announced a new capability for national advertisers to send different commercials to different viewers through Amazon’s Fire TV devices. It also announced that the NFL’s first Black Friday game, aired on November 24, will be free to view for anyone in the U.S.

Also, Amazon Live will have expanded live shoppable entertainment allowing viewers to shop while they watch. New shoppable episodes of “Black Girl Stuff,” — produced by REVOLT, Sean “Diddy” Combs’s media company — will be shown beginning later this month.

The company wants to make “sense of the signals [and] insights at our disposal to create an optimal customer experience that drives business outcomes,” said Colleen Aubrey, senior vice president, ad products and tech for Amazon Ads

YouTube. YouTube is bringing smart advertising to short videos. They announced that its YouTube Select brand safety platform will become available to advertisers of YouTube Shorts content. According to the company, 1.5 billion logged-in monthly users view Shorts monthly.

Measurement and addressability. All the presenters mentioned their reach and datasets. But what about larger concerns across the digital advertising industry related to addressability? Last year, Cohen referred to this challenge as a “slow-motion train wreck.”

“We have always said that the future of addressability will be a portfolio of solutions — it won’t be a simple replacement of the third-party cookies or identifier with something else,” Cohen told MarTech today. “Clean rooms, contextual, seller-defined audiences, cohorts, and many other innovations have been introduced into the marketplace.”

He added, “We continue to push all players in the ecosystem to test, learn, and deploy as the future will undoubtedly not fit into the containers of the past. Now is the time to get in the game.”

The post IAB NewFronts showcases video platforms armed for ‘challenging and unpredictable times’ appeared first on MarTech.

The key to RMN’s success is how interactions with brands can enhance the shopper experience. Digital media experts at Kroger and The Home Depot have spent years developing media networks keeping this key point in mind. If a branded ad interrupts the customer’s journey, it doesn’t help the brand, the retailer or, most importantly, the customer.

Helping when customers research products

Where can brands get involved in the customer journey? At The Home Depot, a supplier approached the retailer about retargeting customers on social media. Soon, the company created opportunities for other suppliers to deliver ads that drove customers to the retailer’s product pages.

This was back in 2018. In 2019, The Home Depot’s Retail Media+ (known as RM+) was launched. Brands now have opportunities to show ads on company owned properties, including homedepot.com, the retailer’s app, in-store and email, as well as offsite media channels like social and video.

“We didn’t want it to disrupt the customer experience,” said Melanie Babcock, vice president, Retail Media+ and monetization for The Home Depot. “Our customer spends a lot of time researching on our site before making a decision. They’re thinking about if they have the right tools, skills, time and capabilities for a project. You have a light to install, should you do it on your own? The consideration time is much less for traditional retailers.”

Because of this longer, more involved customer journey, the retailer decided  decided to let suppliers have the lion’s share of the RMN ad inventory. That means that most of the ads served to customers during their journey are endemic products, ones that can be bought at Home Depot.

“Onsight and in-store are very connected,” said Babcock. “We see that in our customers’ behaviors, and we wanted to be additive to that by keeping the customer in mind and not just monetizing the website. We’re bringing the supplier into the customer journey.”

Personalized precision with customers

Supermarket chain Kroger is another major retailer with a robust RMN, called Kroger Precision Marketing (KPM). KPM is managed under a wholly-owned subsidiary, 84.51˚.

“The common denominator is data science,” said Brian Spencer, KPM’s marketing director. “We have a legion of data scientists available under 84.51˚. There’s shelf assortment and other areas of personalization in our stores. That same talent base is what fuels the personalization behind Kroger Precision Marketing as well.”

Prior to starting its retail media business, Kroger built digital experiences for customers to search products, create grocery lists and receive digital coupons. These tools made it possible for KPM to introduce brands in a relevant way.

Unbranded search terms are 90% of the top 500 searches in Kroger digital touchpoints, Spencer said. That means many customers are looking for products without a specific brand in mind. Directing those customers to a specific brand or product is a logical next step in their journeys.

And, because digital customers are multi-taskers, they aren’t only looking for products available at a Kroger store. For instance, you could be planning a Super Bowl party and need to buy snacks. But what if you also are considering a new TV? Cases like that, but also many others, are where non-endemic brands fit in.

“As we explore non-endemic opportunities, top of mind is that this is activated in a way that isn’t intrusive or obnoxious to our consumers,” said Spencer. “If it’s something that makes sense for our shoppers, we’ll take a look.”

Expanding to offsite journeys

“Retail media data is very advantageous to all kinds of brands, particularly in the grocery category,” said Spencer. Grocery shoppers make purchases several times a month, and often multiple times per week. And these purchases cut across many categories. 

“That kind of information is obviously necessary for consumer packaged goods, but outside of CPG there’s greater interest because some of these non-endemic brands are looking for relevant ways to reach audiences,” he said. “Automotive brands or fast food brands, they may think of our data set as another way to activate across the open web.”

Offsite RMN opportunities are the fastest-growing area for KPM. Kroger has been a partner with streaming service platform Roku for three years. And this week, Disney Advertising announced a partnership with KPM for some Disney media properties, beginning with Hulu.

Dig deeper: CTV added to Kroger’s retail media network business

“Brands, but more typically agencies, are able to go in and activate programmatic display and CTV through a DSP of their choice, and set their own safety standards and activate through a self-service portal — and see sales results and optimize against in-store and online sales,” said Spencer.

“Retail media is more and more being considered as just media,” he added. “It’s more and more part of the total touchpoint consideration set that agencies are looking at. The traditional lines between shopper marketing and brand marketing are becoming more blurred.”

The Home Depot is also looking at how to expand RM+ offsite into CTV. It’s also piloting in-store video screens at 50 locations, currently, to see how shoppers’ digital journeys can be enhanced when they get to the store.

“We’re the last mile in advertising, which is always the most expensive part of the journey,” said Babcock. “There’s huge value to our supplier to connect to that customer and also to know more about that customer.”

The post How Home Depot and Kroger use RMN to improve shoppers’ ad experience appeared first on MarTech.

Why we care. You know you’re in pretty good shape when a 10.8% revenue increase is a major slowdown. The 35% of 2021 would have been tough to repeat even without last year’s inflation, interest rate hikes, geo-political thunderstorms and four quarters of being told there’s a recession right around the corner. Having near 11% growth and all those impediments? That may be a bigger accomplishment than 2021’s gaudy numbers.

IAB’s CEO David Cohen expects 2023’s number to be lower. “Looking ahead, there is definitely still growth to be had, but it will be harder to achieve and likely less than we have become accustomed to,” he said in a statement. 

He has good reason to say that. Consumer spending continues to slow as do housing sales. Inflation persists, although it’s an unusual type, caused by corporate profit-taking instead of too many dollars chasing too few goods.  

However, something could upset the doom-and-gloom apple cart: Artificial intelligence. Will it spur economic growth like two other revolutionary technologies, the telephone and the internet, did?

A troubling trend. The good growth numbers were a result of a phenomenal first two quarters, which saw internet ad revenue increase 21.1% and 11.8%, lifting the third and fourth quarters which saw increases slow to 8.4% and 4.4%.

Search finds its way. Organic search, which has the largest share of ad revenue, grew by 7.8% last year, to a record $84.4 billion. However, its total share of revenue dropped to 40.2%, from 41.4% in 2021. 

Display shows growth. Display ads, the second-largest format, saw increases in both revenue — up 12% to $63.5 billion — and total share, going from 30% to 30.3%.

Audio is mixed. Digital audio had the largest percentage gain of any format, increasing 20.9% to $5.9 billion. However, its overall share of total digital ad revenue was nearly flat, going from 2.6% in 2021 to 2.8% last year.

Video sees clear gains. With a 19.3% increase, digital video had the second-best percentage gain. More significantly it had the largest dollar increase of any format: up $7.6 billion, to $47.1 billion. Also, its share of Video’s share of total digital ad revenue rose from 20.9% to 22.5%

Strong programming. Programmatic advertising’s revenues increased by $10.4 billion, or 10.5%, to a total of $109.4 billion.

A bit less social. Social media growth got off to a strong start in 2022, with ad revenue rising $1.8 billion in the first half of the year, but dropping dramatically to $0.3 billion in the second half.

Mobile is on the move. Mobile grew 14.1% to a record high of $154.1 billion and a 73.5% share of total digital ad revenue. 

The post 2022’s strong digital ad revenue growth unlikely to continue appeared first on MarTech.

This is the profile of your typical smart phone user, surfing the net, looking for the next thing. As they flip from page to page and scroll up and down, they may experience one of six basic emotions: fear, anger, joy, sadness, disgust and surprise.

If the page view sparks the right emotion, then that viewer could be turned into a lead. But which emotion can do that? Can this be done in a loud, distracting environment (like in real life)? And can you score the interaction for ad effectiveness use it to optimize a campaign?

First, some background

The hypothesis that all humans feel one of six basic emotions was proposed by psychologist Paul Ekman. His work also inspired others working the intersection of psychology and marketing, looking for ways to measure emotional response so they can sharpen their approach to consumers.

Machine learning and AI modeling have been used by various businesses, all taking different approaches to the reading of emotions through human facial expressions. Some of these approaches were limited by technology, requiring the subject to sit in front of a desktop PC, either in a lab or at home, so that the digital camera could scan their faces and calibrate these images with the software, Max Kalehoff, VP of growth and marketing at Realeyes told us.

With people using smartphones, staying still long enough to be calibrated was not going to work.

Dig deeper: You smiled, so we think you like this product

Cue the face

Realeyes built its facial recognition app for mobile on previous work. It’s AI had been trained on close to one billion frames. Those images were then annotated by psychologists in different countries to take account of cultural nuances. The algorithm in turn was trained by using these annotations, Kalehoff explained, yielding over 90% accuracy.

The potential for Realeyes to work on the mobile platform intersects with the explosion of social media, and in this realm the app is agnostic. It does not matter what the user is looking at — TikTok, YouTube, Facebook, Instagram. The Realeyes app is gauging their reaction.

“To (the best) of our knowledge, this is the first time it’s been done,” Kalehoff said “We are answering a demand to provide detection of attention to creatives in a mobile environment.”

To put Realeyes on the smartphone, users have to opt-in, and are then directed to an environment where they can look at some ads. They are told to scroll through some screens, “doing what they normally do,” Kalehoff said. A small app will reside on the phone helping measure visual attention data and clickstream interaction data. “Our definition (of attention) focuses on a stimulus while ignoring all other stimuli,” he said. “The experience for the participants is under three minutes.”

Looking for data in the right places

What Realeyes looks for depends on the media the consumer is viewing. One outcome sought is what they call a “breakthrough.” “Real people try to avoid ads,” Kalehoff noted, so breakthrough occurs when an ad successfully gets someone’s attention despite a naturally distracting environment.

This matters as people “swipe, skip or scroll” past ads to get to content. They will swipe on TikTok, scroll through Facebook or Instagram, or skip in YouTube, Kalehoff observed. Did the ad get through?

Then there is the type of viewing, like Netflix or Hulu, where the consumer’s involvement is passive. Here Realeyes is looking for “in focus reaction.” Is the viewer paying attention to the ad? What are they seeing, second by second, and is that creating a positive or negative impression?

Then there is online shopping, for example on Amazon. Here validating visual data gets a four-question follow-up, testing for brand recognition, ad recall, trust in the brand and likability of an ad.

The simplicity of Realeyes’ approach is that scanning for facial expression will work anywhere with anything. As two-thirds of the digital media spend goes to three or four major platforms, “you only have to go to a few places to get where the attention resides,” Kalehoff said.

Room for improvement

The foundation of Realeyes is the training database that informs the AI of the meaning of a facial expression. Porting the app to the handheld means being able to spot smiles and frowns, then using that information to correct a bad impression or improve on a good one.

Still Realeyes is aware there is room for improvement. It has had to work on adjusting its face-reading app to work in low-light conditions while remaining accurate, Kalehoff pointed out. The AI has also received additional training recognizing different skin tones and again delivering accurate readouts.

There are also some upsides. Realeyes can tell if the same face appears more than once. This can be an issue with paid surveys, where a subject may want to participate more than once to score a little extra cash, Kalehoff noted.

As for practical application Realeyes worked with Mars Inc. on a project to boost sales using increased attention metrics. The experience yielded an 18% sales increase across 19 markets, optimizing the ad spend by about $30 million, Kalehoff said. Even a five percent increase in “creative attention” can lead to a 40% increase in brand awareness.

The post Scanning the faces that scan the mobile screens appeared first on MarTech.

Recent years have seen gaming become an attractive advertising opportunity for brands. As more people are playing video games, there’s a huge potential for advertisers to reach new audiences. To gain further insight, DISQO CX surveyed 28,244 nationally representative consumers.

Their findings suggest that gaming is mainstream, with over one-third of the US population likely to have regular metaverse interactions within the next 5-10 years. Of those surveyed, 76% had noticed advertisements from brands. Consumers favored in-game experiences, bonus content, and embedded functionality, as these formats enhance the gaming experience for both gamers and advertising partners.

Visit Digital Marketing Depot to download How Brands Can Get in the Game. You’ll learn how to use the gaming medium to level-up your marketing, gain a better understanding of in-game audiences, and which ad formats are most popular with consumers.

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Gatorade is currently running ads for its new energy drink Fast Twitch. Kraft Heinz tested ads for multiple brands, including Velveeta. Both campaigns used basketball themes to connect with March Madness fans.

Why we care. Cooler Screens’ technology shows video images of in-stock products to shoppers when they’re deciding what to grab and buy. This makes the screens eye-catching and relevant for serving ads. On the back end, the technology uses “identity-blind” sensors for traffic and behavior data that demonstrates campaign performance.

At a time when many retailers are launching their own retail media networks (RMNs), Cooler Screens cuts across a number of retailers with this new all-at-once offering, giving big brands opportunity to scale, and to do so with a video experience that is more useful and interactive than standard in-store video screens.

Dig deeper: Why we care about retail media networks

In-store network. Cooler Screens’ 10,000 screens across retailers serve ads to nearly 100 million viewers per month.

Using data from the screens, brands can measure sales lift, brand equity and real-time shopper actions — like opening the refrigerator door — to optimize the campaigns.

The Kraft Heinz test campaigns delivered between three and six percentage points in sales lift across their brands.

The post Kraft Heinz and Gatorade tap in-store video screens for March Madness appeared first on MarTech.

“Our goal is to empower organizations across the ecosystem to execute data collaboration at scale, without the need for ongoing technical resources or the need to move the data,” said Matt Kilmartin, Habu co-founder and CEO, in a company release.

Why we care. Marketers are looking to data clean rooms as a way to enrich their data and boost ad campaign performance in an increasingly regulated digital ecosystem where data is precious. Interoperability increases the opportunities marketers have to build clean rooms with publishers and other digital media partners.

“Data clean rooms come in very handy to help us broaden the ways we use data beyond just a one-to-one kind of transaction,” said Roku’s head of ad platforms, Youssef Ben-Youseff, in the release.

Dig deeper: Why we care about data clean rooms

Data and intelligence tools. Habu’s improved platform allows clean room owners to work more effectively with business intelligence derived from the data clean room. Reports and analytics dashboard environments generated from the clean room can now be templatized and packaged.

Also, an improved Question Builder in the new version of Habu now makes it easier to author new clean room use cases and templates.

New integrations. Enhancements to the platform include a new simplified integration with Facebook. Marketers can now add Habu to their Facebook Ads/Advanced Analytics account.

Additionally, enhancements to integrations with TikTok and Twitter reduce rate-limit disruptions and other errors, taking away the need for ongoing manual support on those social platforms.

Amazon Marketing Cloud. Last fall, Habu became a certified Amazon Marketing Cloud partner. This opened up the Habu platform to marketers using Amazon Ads who want to expand their campaign through the marketing cloud and use Habu’s intelligence tools.

Using a library of plain English queries and visualizations, the no-code and low-code Habu tools allow marketers to enrich data and gain intelligence with little to no experience in data science.

Dig deeper: Amazon announces AWS Clean Rooms

The post Habu releases new data clean room enhancements appeared first on MarTech.

In-game advertising merges ads with the game environment seamlessly. Imagine seeing billboards while racing through the streets or branded in-game products you can purchase. These ads are more powerful and effective than in-app advertisements — those annoying pop-ups or banner ads you commonly see in mobile app games.

With nearly 3 billion games worldwide, in-game advertising can give brands incredible reach. From virtual billboards to branded experiences, video games have become a marketer’s paradise for reaching the coveted gaming demographic.

This guide covers the basics of in-game advertising, including common ad types, available targeting options, associated costs, challenges and best practices.

Types of in-game advertising

Before exploring how to take advantage of in-game advertisements, let’s review the most common types of game ads.

Static in-game advertising

These ads are directly hardcoded into the game. Since the ads can’t be changed and will exist in the game ad infinitum, rates are expensive and charged on a fixed-fee basis.

Dynamic in-game advertising

Dynamic ads can be replaced quickly and deployed instantly. These ads can appear in different places and formats (display and video ads are the most common). The 2008 billboards from Barack Obama in Need for Speed: Carbon are a great example of this ad format’s simple yet powerful use.

Sponsored game content

Sponsored game content involves integrating a brand or product into the actual game content, making it even more tangible and visible to the player and engaging them with the brand.

Dig deeper: PepsiCo’s strategies for marketing via online games and esports

KFC did this exceptionally well when it partnered with Nintendo to create a virtual island in the popular game Animal Crossing: New Horizons. The island was designed with KFC-themed items and decorations and even allowed players to win a voucher for chicken in real-life.

Advergames

Rather than integrating the ads into an already existing game, advergames are games specifically designed to promote a brand or product. They provide a fun and engaging way to interact with a brand and can effectively build brand awareness and loyalty.

Chex Quest, made by Chex, was the first video game ever to be included in cereal boxes as a prize. It was a top-to-bottom conversion of the popular game Doom but adjusted it to be family-friendly. The game was a hit among consumers and even won several awards.

Activision Blizzard Media has recently created many Playables — branded stand-alone mobile app games.

Product placement

The classic advertisement method still works. Advertisers can put their products directly into video games to guarantee players see the brand and “use” the products.

I remember playing Mario Kart 8 on the Nintendo Wii and unlocking the Mercedes-Benz cars. This made the branded products more exclusive since they had to be earned.

Targeting options for in-game advertising

The other unique benefit of in-game advertisements are the targeting abilities. It starts with choosing the right game (or games). Advertisers can focus on consumers based on demographics, geolocation, device type or platforms. However, integrating these traditional targeting approaches with behavioral targeting makes in-game advertisements even more effective.

Behavior targeting uses the actions the player has taken (or has not taken) to create an ideal segment of users to reach. For example, an advertiser could target players who have demonstrated a willingness to open their wallets by spending money to buy items in a game — or players who have reached a certain level and are, therefore, more engaged.

Combining these different ways of targeting and deploying them across various games that reach consumers on multiple platforms (gaming consoles, computers and smartphones) makes in-game advertising extremely powerful. With abundant reach and powerful targeting, brands can build awareness, drive engagement and boost sales quickly and effectively.

How to buy in-game advertising

Getting started with in-game advertising will ultimately depend on the types of games you want to appear in and your budget. 

When selecting an approach to buying in-game advertising, consider the specific goals, budget and target audience of the campaign. 

Game publishers

• Example: Activision Blizzard Media

You can work directly with game publishers to create custom ad campaigns within their games. This approach provides more control over the creative content and targeting and a deeper level of integration with the game environment. 

However, it can be more time-consuming and expensive than other options and may not offer as much scale or reach since it is limited to a single game.

In-game ad networks 

• Examples: Admix, Unity Ads

Ad networks connect brands with multiple game publishers, providing access to a broader collection of games. They offer greater scale and reach and more efficient pricing and targeting options. 

The downside is that you have less control over the creative content and placement. Some ad networks are not as high-quality and have limited targeting options. 

Programmatic advertising platforms 

• Examples: Bidstack, Anzu

Programmatic platforms use data and algorithms to automate the buying and placement of in-game ads across multiple publishers and platforms. This approach can offer greater efficiency, scale and advanced targeting options based on user data and behavior. However, programmatic platforms may have less control over the creative content and placement and may require more technical expertise.

The costs of in-game advertising

How expensive are in-game ads? It depends, but it’s only going to get more expensive. In-game advertising pricing can vary based on several factors, including the type of game, ad format, targeting options and the size and scope of the campaign.

CPM pricing is the most common approach, and rates can vary widely based on factors like ad format and targeting. The average CPM for in-game display ads ranges from $10-20, with video ads from $15-30.

These numbers will vary dramatically depending on the audience, game, targeting and ad formats. For example, CPMS for in-game ads targeting Gen Z and Millennials were 30-50% higher than those targeting Gen X and Baby Boomers, according to an Interactive Advertising Bureau (IAB) study.

You can also expect CPMs to continue to rise with the growing popularity of games and the high demand to reach gamers who are otherwise difficult to reach. Other in-game ads follow a flat-rate pricing model, especially static ads or advergames.

Challenges and best practices

It’s all fun and games until your campaign stops performing well. In-game advertisements come with their own unique set of challenges — and fatigue is a real concern. 

• Players can quickly become bored or annoyed by seeing the same ads repeatedly. Be sure to monitor frequency and refresh creative as often as possible.
• Players will also be upset if ads are intrusive, distracting, or disrupt their gameplay in any way. This isn’t commonly an issue, but it’s an important consideration.

As with any advertising, targeting is critical. It’s best to use non-intrusive creative formats to engage users. If possible, rewarding users with in-game currency, items, or exclusive content can increase engagement rates and brand affinity. The aforementioned example of being able to earn Mercedes-Benz cars in Mario Kart is a simple but effective model of this in practice.

What’s in store for in-game advertising?

In-game advertising is a powerful way to reach a highly-engaged, lucrative and fast-growing audience. There is no shortage of different types of games and no reason not to try in-game advertising.

Mobile games and handheld gaming platforms like the Nintendo Switch make it even easier for brands to stay connected and engaged with users even more than ever before.

New technologies like virtual reality and the Metaverse will bring more gaming environments, unique experiences and even more diverse opportunities for advertisers to explore.

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