Video game advertising offers marketers access to one of the most engaged audiences in digital media. Nearly 60% of the US population plays digital games, yet gaming accounts for less than 5% of worldwide media investment, creating a gap between consumer attention and ad spend allocation. This guide examines in-game ad formats, audience demographics, and emerging opportunities like rewarded advertising that are reshaping how brands connect with gamers across platforms.

What is in-game advertising?

In-game advertising refers to the integration of marketing content into video game environments across mobile, console, and PC platforms. Ads can appear in a variety of different forms in-game, including as billboards within gameplay, video spots during natural breaks, or sponsored virtual items that players interact with directly.

Many marketers are already making use of this format, but there's a lot of room for growth. US game ad revenues will surpass $10 billion by 2029, according to an EMARKETER forecast. In-game advertising will represent 2.3% of overall digital advertising spending in 2026. This indicates a disconnect between where marketers allocate budgets and where consumers spend their time: The average US consumer spends over one hour daily with digital gaming.

What types of in-game ad formats are available to marketers?

The Interactive Advertising Bureau's 2025 Gaming Measurement Framework categorizes in-game advertising into four primary formats:

• Intrinsic in-game ads. Ads that appear inside a player's experience, such as virtual billboards, branded signage, or product placements that blend with the game environment.
• Rewarded ads. Formats that give players cosmetic items, in-game currency, or other benefits for viewing the ad. 62% of players say rewards-based ads are the most engaging type of in-game advertisement, according to Attest.
• Interstitial ads. Full-screen ads that appear between levels or during natural breaks in gameplay.
• Adjacent ads. Ads that appear near but not inside the actual gameplay, such as banner overlays or companion displays.

Beyond these formats, there are other ways marketers can connect with players. For example, brands can also pursue "advergames" (custom games built around a brand), sponsored events, and branded virtual goods sold through in-game marketplaces.

Why are marketers increasing investment in video game advertising?

Three factors are driving renewed marketer interest in gaming:

• High engagement and purchase intent. Gaming captures 2.5 times more attention than popular ad channels like social and web advertising, and gaming ads maintain double the purchasing intent compared with other ads, according to The Drum and Gameloft. 46% of gamers often make purchases based on in-game ads, up from 40% a year ago, per Bain & Company's Gaming Report 2025.
• Access to younger demographics. 90% to 95% of Gen Z and Gen Alpha identify as gamers, according to the IAB. Gen Z represents the predominant source of digital buyer growth, making gaming a pathway to the next generation of consumers.
• Receptive audiences. Only 20.3% of US gamers say they generally dislike ads in games, per January 2025 data from Attest. Gamers respond positively to ads that are skippable (46.8%), offer rewards (41.4%), are relevant to their interests (26.5%), or blend with the game's theme (24.5%).

How large is the US gaming audience and what are its demographics?

In the US, the gaming audience spans all age groups and demographics, challenging the stereotype of gamers as primarily young males.

Some 59.2% of the US population will be digital gamers in 2026, according to an October 2025 EMARKETER forecast. And globally, over 3.4 billion people play digital games, according to Dentsu.

Penetration rates are highest among young adults (76.0% of ages 18-24), but gaming has become mainstream across generations:

• Ages 12-17: 74.2% are digital gamers
• Ages 25-34: 73.5%
• Ages 35-44: 62.9%
• Ages 65+: 43.6% (a growing segment)

Gaming also extends beyond the game itself: 27% of gamers' social media time and 25% of their streaming video time is spent on gaming-related content, per Bain & Company.

What is rewarded advertising and why is it gaining marketer adoption?

Rewarded advertising offers consumers tangible value in exchange for their attention, such as discounts, in-game currency, extra lives, or exclusive content. This value exchange differentiates rewarded ads from more interruptive formats.

Some 65% of US marketers agree that users prefer rewarded ads to non-rewarded formats, and 46.3% say rewarded ads make users feel more in control of their ad experiences, according to an EMARKETER and Discord survey. Adoption is growing: 20% of marketers use rewarded ads frequently, and another 34.4% have tested them. Brand marketers are leading adoption, with 52.9% planning to use rewarded ads in upcoming campaigns compared with 41.9% of agencies.

The format resonates particularly with Gen Z, a generation that's digital-first but increasingly ad-averse. Three-quarters of Gen Zers will be digital gamers by 2028, making reward-based formats a natural fit for reaching this demographic.

How effective is rewarded advertising across the marketing funnel?

Rewarded advertising demonstrates effectiveness from awareness through conversion. More than 60% of marketers find rewarded ads effective for upper-funnel, middle-funnel, and bottom-funnel marketing efforts, according to the EMARKETER and Discord survey.

• Brand awareness: 55.6% of marketers say rewarded ads are suited for building awareness
• Engagement: 74.4% say they enhance user engagement
• Conversions: 63.8% say they're suited for driving installs and sign-ups; 48.8% say they generate conversions
• Loyalty: 40.6% believe rewarded ads can build long-term brand loyalty

Additionally, two-thirds of marketers see rewarded ads as effective for reaching tech-savvy or hard-to-reach audiences.

The format is also expanding beyond mobile gaming: 74% of marketers see social media as a promising environment for rewarded ads, followed by streaming platforms (56%), and messaging or community apps (45%).

What challenges do marketers face with in-game advertising?

Despite the opportunity, in-game advertising presents obstacles that limit investment:

• Disruption concerns. 64% of gamers say ads disrupt in-game experiences, up from 59% a year ago, per Bain & Company. Poorly executed ads risk alienating players.
• Mixed gamer sentiment. While few gamers actively dislike ads, only 14.6% have a positive feeling about ads being in games, according to Attest. Acceptance depends heavily on format and execution.
• Underinvestment relative to attention. Gaming accounts for less than 5% of worldwide media investment despite commanding substantial consumer time. This gap suggests marketers lack confidence in measurement or struggle with fragmented buying processes.
• Evidence requirements.64.4% of marketers say case studies or success metrics would increase their willingness to invest in formats like rewarded advertising. With 61% of US CEOs wanting marketing teams to focus on performance and ROI metrics, per January 2025 data from Boathouse, evidence-based investment decisions are crucial.

How should marketers evaluate video game advertising opportunities in 2026?

Marketers evaluating gaming should focus on four priorities:

1. Match format to audience tolerance. Skippability (46.8%), rewards (41.4%), and relevance (26.5%) are the top factors that make in-game ads more acceptable to US gamers, according to Attest. Prioritize non-intrusive formats that add value rather than interrupt gameplay.
2. Leverage gaming's full ecosystem. Gamers' interests extend beyond the game. With 27% of social media time and 25% of streaming time dedicated to gaming content, brands can reach gamers through creator partnerships on YouTube, Twitch, TikTok, and Instagram alongside in-game placements.
3. Test rewarded formats. Seven in 10 marketers are testing new ad formats to combat falling ROI from paid social, per a February 2025 Taboola survey. Rewarded advertising offers a proven value exchange that resonates with ad-averse younger audiences.
4. Align creative with context. 48% of gamers say technology products and gaming accessories fit well in games, per Attest. Brands outside gaming categories should consider sponsoring virtual items, partnering with creators, or integrating through in-game commerce platforms like Roblox's Commerce API.

We prepared this article with the assistance of generative AI tools and stand behind its accuracy, quality, and originality.

EMARKETER forecast data was current at publication and may have changed. EMARKETER clients have access to up-to-date forecast data. To explore EMARKETER solutions, click here.