Will Consumers Pay for Advergaming? - eMarketer

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Will Consumers Pay for Advergaming?

BK wants its creepy mascot to be the king of all media. Will people buy what it's selling?

By James Belcher - Senior Analyst

December 26, 2006

According to the American Advertising Federation (AAF), advergames are low on the budget priority list for online advertisers. A November 2006 study by the group revealed that its members had only budgeted 3.6% of their media budgets for video games in 2007. This is up from 2006, when AAF members said that they would spend 1% of their online ad budgets on advergames in particular.

Percent of Media Budget that US Advertising Executives Plan to Allocate to Select New Online Media in 2007

Despite the seeming bearishness on games as ad platforms, the same AAF study found that 23% of respondents thought that video games are "very" or "most" effective among all types of emerging media.

Select New Online Media that US Advertising Executives Consider Most Effective or Very Effective, 2006 (% of respondents)

That 3.6% for 2007 mentioned in the first chart is an average, of course, and some firms are placing larger bets on this platform than their peers. One advergaming bull is Burger King, which recently started selling three Xbox and Xbox 360 titles for $3.99 each with the purchase of a Value Meal. One title, called Sneak King, invites gamers to "Sneak down alleys, roads and sidewalks to surprise innocent bystanders with a burger."

If you think this sounds odd, you are probably not in the target market.

Burger King has a history of selling marketing collateral as add-ons to food purchases. The fast food chain sold millions of Nightmare Before Christmas watches at $1.99 each in 1993-1994, in a promotion for its Everyday Value Meal menu.

Advergames have been around since at least the early 80s, with Kool-Aid and Pepsi having distributed promotional Atari 2600 game cartridges featuring their brands. This is the first time within memory, however, that a firm has charged money for such games.

Given that even an AAA (top-tier) video game title can be made for $10-$20 million, it is entirely likely that the King mini-games will earn back their development costs just from the $3.99 price, making the promotion largely free for Burger King, which will also sell more product and gain further brand notoriety if all goes well. Initial reviews have been generally favorable, with most along the lines of "it's not bad for a free game." While some wags have declared that to be code for bad games, most reviews have been favorable. More importantly, the promotion, which ended December 24, 2006, did very well. Microsoft has announced that more than two million King games have been sold as of last week.

What other types of brands would work so well in advergames that you could charge for them? Obviously, Burger King's large number of restaurants makes distribution easier than it would be for some other brands, especially those without a significant retail presence. The firm also has a well-known character (The King) on which to hang gameplay. Moreover, one size definitely does not fit all for advergames, and game content itself will have to be age-appropriate. Consider the following quote in Gamasutra.com from Philip Oliver of Blitz Games, which developed the three titles for Burger King: "Certainly they're not after the sub-ten-year-olds, because the competition does that, without mentioning any names. But they want to get the 12-18 or 20 year olds, and those people play video games, and that's cool and that's trendy and that's where they want to spend their advertising money." The fact that the chain made the games a premium for food purchases also makes sense; the low price point (compared with $60 for full retail XBox 360 games) makes the purchase a no-brainer for people in the target demographic who already own the console. Companies that want to follow in BK's footsteps will have to consider how many of these conditions exist for their brands.

Burger King's next edgy promotion will be a low-budget movie intended for a cult audience. As long as the film avoids the extra cheese of the McDonald's bomb Mac and Me, it should be off to a good start.

For more on what marketers should know about the video game market, read eMarketer's Video Games: Where To Now? report.

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