BigShinyThing

For the past few weeks, Massive Inc., a New York company that distributes ads in videogames, has been testing an ad with full motion and sound in a science-fiction game called Anarchy Online. This week, Massive will roll out the full-motion ad capability to advertisers generally. According to Massive’s site, “By aggregating the largest audience of gamers and providing real time delivery of advertising across top-selling video games, we can provide publishers and developers $1–$2 profit per unit shipped for their titles. For advertisers, the Massive Network provides unprecedented access to the gamer audience through dynamic and targeted delivery of ad messages.”

Massive’s move comes less than a year after it created a stir in the videogame-advertising industry by offering advertisers the chance to insert still ads into videogames played on Internet-connected computers. Massive uses the Internet to insert ads into spaces in the games. The ads can also be changed and withdrawn whenever the advertisers want. The technique was a big step forward for videogame advertising, which previously was restricted to ads inserted into games while the games were made. Because games can take up to a couple of years to be designed, this required advertisers to put their ads into games well before the games’ release.

The game-insertion technology opened the door for a broader array of marketers to promote their products on videogames. These ads are particularly suitable for Hollywood studios wanting to promote movies a week before their release date or retailers promoting holiday sales, Massive Chief Executive Mitchell Davis says. He says Massive has so far sold space to 35 advertisers, including Viacom Inc.’s Paramount Pictures.

Current spend on video game advertising is modest — $10 million compared with $10 billion on TV advertising aimed at young men, according to estimates from Harris Nesbitt Equity Research. But advertising in videogames is growing fast and expected to reach $92 million by 2008, according to Yankee Group, a global technology-research firm.

Massive says its technology works for both online games and consoles, but it hasn’t yet negotiated a deal allowing for ad-insertion in console games. Mr. Davis says he hopes to strike a console game deal soon. Edward Williams, managing director at Harris Nesbitt Equity Research in New York, says the videogame ads won’t take off until console games are included.

As with television, ad avoidance is a real issue in video games. The player can simply move past the ad and is too focused on getting the bad guy to pay attention to branded messages. As a result, gamers may see only a few seconds of the 15-second ads. Massive says it won’t charge advertisers unless the full ad has been viewed.