What Is In-Game Advertising and How It Can Increase Your Game’s Revenue?

by Game Marketing Genie, on 20-Oct-2021 10:58:36

With an estimated 3 billion gamers worldwide, video games provide an effective advertising channel to reach consumers. Anyone who has played a video game lately knows how remarkably immersive they have become. The level of detail in today’s games takes gamers to another universe where they’re engaged with sights, sounds, and interactive gameplay. 

Marketers looking to reach an engaged audience can achieve top-level interaction with clever in-game advertising. 73 percent of gamers are happy with the ad-based model of today’s video games. This shows that in-game advertising is a creative monetization strategy you can use to boost your game’s revenue.

What is in-game advertising?

In-game advertising is the placement of ads within video games. It allows marketers to place their custom branding and featured products in video games to connect with highly engaged users. Ad formats include static and dynamic banners, video, and audio ads. 

Examples of in game ads include huge billboards placed in virtual cities that feature the logo or name of a company looking to connect with the gaming audience. Racing games can feature cars made by motor companies such as Ferrari and Mercedes Benz. Advertisers have been creative in integrating ads organically into the games to ensure the ads complement and not interrupt the user flow. 

Given that video games are so immersive, the full effect of the ad registers on the viewers to help advertisers improve brand awareness and recall. The interactivity of video games also allows for more subtle forms of advertising. Rather than bombarding users with their logos and slogans, advertisers can weave their messages into the gaming experience in a way that feels organic. This way, the ads become a feature that enhances the gaming experience rather than a distraction. 

In-game advertising options are also customizable because most consoles are connected to the internet. Therefore, advertisers can update their ads at will, and the consoles will adjust the content immediately.

Playing a mobile game

In-game economics

A recent survey by Iron Source found that the spending on in-game advertising is set to increase in 2021. 49 percent of those who previously ran in-game advertising, and 32 percent of those who haven’t, plan on increasing their in-game marketing budgets in 2021. 

However, despite the rise in adoption of in-game advertising, many advertisers still hold stereotypical misconceptions about who gamers are, which ad formats are the best, and the popular type of video games. This is the general feeling among advertisers who have never published ads in mobile games. Within this group, most people are unaware of the scale of the global gaming audience or the revenue generated by video games. 

Out of the buyers who don’t buy in-game ads:

  • 58 percent underestimate the total number of gamers worldwide, which currently stands at 3.2 billion. 

Number of gamers graph

Figure 1: The number of gamers worldwide. Source: Statista

  • 60 percent understate a gamer’s average age, which is 34 years. 
  • 75 percent underestimate the revenue generated by video games. Data from Statista shows that the global video game industry is worth $178 billion in 2021, with mobile remaining the largest segment with roughly $90 billion in annual revenue. In comparison, the revenue for other entertainment channels like streaming is lower than gaming – e.g., streaming video ($42 billion) and streaming audio ($26 billion). 

So, what does this data mean for advertisers and developers?

The fact that in-game marketing is not yet saturated gives advertisers the unique advantage of connecting with consumers in the immersive gaming environment. Consumers will not skip the ads since they have naturally been integrated into the game for a more holistic advertising experience. 

On the other hand, developers have the opportunity to educate media buyers about the benefits of placing ads within the video game environment. They can share the power of dynamic ad formats and how the immersive gaming environment boosts brand awareness and recall.

Why do brands invest in in-game advertising?

In-game advertising harbors a lot of opportunities for brands looking to connect with engaged users. Ads in gaming allow brands to generate visibility on an advertising channel that is not yet saturated by the competition. Furthermore, choosing the right ad formats allows brands to differentiate themselves from the competition and target users more effectively. 

What’s more, in game marketing lets brands adapt their advertising in real-time. With the customization options possible with in-game ads, it becomes easy to create targeted advertising messages for your audience. 

Other benefits that brands get for publishing ads in video games include:

Brand safety

Brands get to choose where their ads will appear. Careful game selection prevents ads from being displayed in inappropriate environments. 

Engagement

It has been found that consumers are more likely to engage with a rewarded in-gaming ad than a sponsored social media post. The added value of in-app rewards encourages players to interact with the ad, thus helping brands connect with more people. Additionally, players are more open to purchasing ads published in video games than users in other advertising channels. 

Involvement

Ads within games provide a greater sense of involvement than ads published elsewhere. Players are actively immersed in the gameplay experience, making it an ideal environment to gain their attention. 

Measurement and ROI 

It is easy for advertisers to track metrics such as engagement, reach, and completion rate. In game ads allow brands to connect with consumers through focused promotional campaigns that incur low upfront fees and generate high returns. 

Reach

The gaming audience has just crossed the 3 billion mark, and the numbers keep rising. The industry's ability to integrate ad placements at a fraction of the cost of other forms of marketing provides brands with a cost-effective way to achieve their marketing goals.

Person looking at papers

Who can brands reach through in-game advertisements?

Back then, the picture that came to mind when you thought about a “gamer” was that of a young adolescent male with poor decision-making and purchasing power. But right now, there’s no such thing as a “typical gamer.” This is because we have just as many male gamers as female ones. Additionally, gaming now attracts a broad demographic, with the number of young and older gamers fairly balanced. 

This shows that marketers can reach a diverse audience when they choose to advertise within video games. The person coming across the ads could be anyone from a young, highly educated man with a range of pop culture interests to an older, highly traveled woman with high purchasing power. But these personas are very different, and brands cannot reach them with a one-size-fits-all strategy. Marketers must use data to understand how their target users consume digital media and their in-app interests. Doing so helps marketers gain the insights needed to develop better audience targeting strategies for their in-game ads. 

Types of in-game advertising

Paid promotions built into video games can take three formats. They include:

Dynamic in-game advertising

Dynamic advertising is the newest and most popular form of in-game advertising by media buyers. It allows advertisers to buy real-time, geo-targeting capable ads inside video games. The ads appear on virtual objects such as billboards, bus stops, and posters within the game environment. 

Ad networks deliver dynamic in-game adverts in the same way banner ads are served on websites and other online properties. This has made it easy for advertisers to plan and launch a campaign since all they have to do is supply the creatives, and their ads will be integrated into appropriate titles on console, PC, and mobile games. 

Static in-game advertising

Static advertising takes the form of an ad placement inside a video game. The ads are planned and integrated into a game during the development stage. This allows for a more customized integration where ads are added into a game’s storyline to allow players to interact with the brand when playing the game. 

Static advertising is a fantastic channel for global brands to pursue because it doesn't come with geo-targeting capabilities. However, it isn't suitable for brands that want to run time-sensitive campaigns because static ads remain within a game for its entire lifecycle. 

Advergaming

Advergaming differs from dynamic and static in-game advertising in that the whole game exists as an ad. These customized games are built for the sole purpose of promoting a product or brand. The games can be played on almost any platform, ranging from fully functional 3D games to simple browser mini-games. 

Chipotle Scarecrow is just one example of an advergame. It was funded and built for Chipotle to create a fun and positive connection with users.

Chipotle Scarecrow

Figure 2: Chipotle Scarecrow. Source: Apple App Store

Paid advertising for game devs

Organic marketing is great, but it won’t take you all the way to game marketing success! Don’t be afraid to invest in paid advertising, as it can help you generate the reach and engagement you need. Still not convinced? Check out The Complete Paid Marketing Guide for Video Games!


In-game advertising is an effective channel for developers to boost the revenue from their games. With marketers looking to connect with consumers in the most intimate ways, the immersive gaming experience is the perfect setup for brands looking to drive awareness and earn loyal followers.

Gamers are also happy with the ad-based model of most games and would gladly engage the ads you have published inside your game. This will help you earn more money by guaranteeing advertisers more impressions and clicks on their ads.
Let us know if you think in-game ads are a viable monetization strategy.

Need help setting up in-game advertising for your game? Check out these strategies for inspiration.

Topics:Video Game Marketing StrategyVideo Game MarketingDigital Marketing StrategyPaid Advertising

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