New Platform Model Brings Commerce to In-Game, Metaverse Ads

In early April, the Internet Advertising Bureau (IAB) held what it called the “first event of its kind” convening agencies, brands, platforms and developers to get a grip on advertising opportunities in gaming that are seen as extremely promising, though underutilized.

There are reasons why games eschew ads, mostly having to do with disrupting immersive experiences with intrusive sales pitches, and ongoing debates around in-app purchases.

Conversely, there are some 3 billion gamers worldwide playing on a monthly (if not daily) basis — and that’s 3 billion reasons to engage digital audiences with ads made for that milieu.

Itamar Benedy, co-founder and CEO at Anzu, told PYMNTS’ Karen Webster. “It’s easy to argue that every brand in the world has an overlap with the gaming audience.”

In other words, brands that “get” gaming have an advantage, but it’s not a huge group as yet, and gaming economics are changing such that advertising support is a matter of urgency.

“There’s a lot of conversations around Web3, crypto, blockchain, which will become important technologies for video games, but we’re very far from that. There’s just no traction.”

“Gaming is the only place where there’s really scale,” he said.

And it’s not that gamer hate ads. Gamers, like most people, hate badly done ads. Horrified by the ads he encountered in free mobile games, Anzu came to life.

“Our vision is to empower marketers to communicate in a positive way with every gamer on the planet. We have different solutions for different platforms, but it’ll always be about [letting] gamers [have] an immersive, native, positive experience.”

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Beyond Basement Game Geeks

Disabusing marketers of outdated notions about who gamers are and what speaks to them best is core to Anzu’s mission of creating blended, adaptive and realistic in-game ads.

Benedy said, “In the early days we were getting a lot of comments like, ‘You have a very cool startup, but those geeks locked in their basement [are] not our audience. Advertising for this audience is not relevant for us as a brand,’ versus now, where gaming is pop culture, and a lot of brands are taking gaming more seriously.”

A lot of 60-year-olds are playing Candy Crush.

Moreover, he explained that gaming is moving from console and cartridges to streaming, with an ocean of Big Tech dollars going into metaverse, eSports, and away from $70 game carts.

“That’s one main business model of games that is being challenged. Second is in-app purchases and lock boxes and regulations and fines are becoming bigger topics. If it’s getting more expensive and more competitive to build a game, and the two most important business models are being challenged,” then advertising becomes the straightest path to monetization.

With an “education layer” now updating the profile of gamers for brands, next comes the tech.

“Now we are finalizing the next part in the process of adopting technology, bringing the sophistication of digital advertising, programmatic advertising, real-time analytics, measurement, attribution” and such capabilities to games, closing the return-on-investment loop for advertisers.

He said “these things will be connected together [so that] gaming is going to be a medium, same as social, search, out of home and TV are advertising buckets” in big brand ad buying.

As for the ad blockers known to confound online gamers, or the fact that big names like Apple Arcade and Netflix Gaming take ads out of games as soon as they’re acquired in the belief people would rather subscribe to ad-free metaverse gaming, Benedy has some thoughts.

“They would say there’s an audience that will prefer to pay $5, $6, $8, $20 a month and not have ads. My approach here is that for a very niche audience, it is correct. For the mass audience, if advertising is immersive and not disruptive, people will prefer that.”

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Justifying In-Game Ad Spend

How digital advertising is presented in games is decisive in whether gamers mind its presence in the first place, and obviously impacting their propensity to click or not to click.

Platforms like Anzu do this in a variety of ways, making ads seem realistic and as if they belong in the online games and metaverse 2.0 that builds on what platforms like Roblox already offer.

A major advantage of standardizing ad specs and metrics — a project that Anzu took up in 2020 with investor and world’s biggest ad agency, WPP — is being able to segment ad content and format for audience in ways that TV could only dream about.

It doesn’t need to be a skater boy pitch either (remember those Candy Crush moms).

Comparing a “hyper casual two-dimensional simple game for your idle time, and a $70 Xbox shooter game,” Benedy said the two couldn’t be more different in their appeal, which is where platform analytics and programmatic link up to show the right content to right person, rightly.

“You can have a static billboard in a game. There is programmatic advertising of banners and videos placed inside the game where …there’s data to see media value. It can even be attached to things like digital attribution, the user journey, seeing it in a game, going to a website, purchasing on the website and even purchasing offline,” he said.

As the metaverse now being promised comes to life and gathers users of many profiles to it, there’s room for everyone, even if a brand doesn’t scream “metaverse” or even “digital.”

A good example of this is fast-fashion brand American Eagle.

Harking back to the IAB conference, he said, “I was on stage with American Eagle, one of our first early adopters. I’m not sure American Eagle is the first brand someone will have in mind for being an early adopter for gaming. It’s not like Verizon for their gaming connection with 5G.”

From there, the only limits are throughput, imagination and investment. In any case, it’ll be big.

“Instead of dozens of big brands taking gaming seriously, it’ll be hundreds. By magnitude, we’re going to have more scale … in game developers adapting advertising as a business model.”

As they do, more will rely on platform like Anzu, and features like the innovative real-time measurement viewability tool it introduced with Moat and Oracle for gaming.

“This is one of those milestones that now there is an easier way to understand media value and to be able, data-wise, to justify more spend in gaming. More partnerships like this will take us faster.”

And the more marketers who comprehend ads for gaming, the better for Anzu and others bringing these messages into gaming and the metaverse with finer tracking and metrics.