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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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June 4, 2008 11:16 AM

Video game advertising competition heats up with Sony, IGA deal

Posted by Benjamin J. Romano

IGA Worldwide, a competitor of the Massive in-game advertising unit of Microsoft, announced a deal with Sony yesterday to sell in-game advertising on PlayStation 3 in Europe and North America. The move comes a day after Microsoft touted the success of its in-game advertising network on the Xbox 360, and also illustrates the different approaches the two console makers are taking to the business.

Microsoft, with Massive, brokers all the advertising that appears in Xbox 360 games. It's part of the company's strategy to provide an end-to-end offering for advertisers seeking to reach consumers on a full range of digital devices. Check out this story from last summer for background.

Sony has taken a different, more open approach. Last summer, it announced an in-house video game advertising unit, and started working with Nielsen to measure the space.

Nielsen Media Research expects the in-game ads industry to hit $1 billion by 2010.

In February, Sony said it would open its platform to allow independent in-game ad companies broker deals with third-party game publishers.

In just such a deal, IGA announced today that it will be the exclusive ad provider for Electronic Arts' titles on Sony's PlayStation 3. EA's popular sports games are among the most fertile ground for in-game ads because the stadiums and race cars they depict are plastered with ads in real life. Executives argue that this enhances the experience.

All the in-game ad networks are seeking to lure more advertisers to their offerings as a key vehicle for reaching 18- to 34-year-old males. (Even within the industry, there is a range of opinions on the potential for this form of advertising.)

Microsoft just published research it conducted with Interpret showing that ads for shoe and apparel maker adidas in the game "Major League Baseball 2K7," were effective in boosting awareness of the brand and its cache.

"Among those exposed to the adidas ads (the test group), 40 percent recall the company's tagline of 'Impossible Is Nothing' -- an increase of 90 percent over those not exposed to the ads (the control group). The number of gamers exposed to the ads who agreed with the statements 'adidas is the only brand for me' and 'adidas is an inspirational brand' rose 70 percent over those not exposed to the ads. In addition, 73 percent of gamers recalling the ads agreed with the statement that 'the ads enhanced the realism of the game.'"

Microsoft also said its in-game ad network has been audited by a third party, another effort to combat skepticism.

I was thinking about all of this as I played "GTA IV" before work this morning. That game is populated with lots of advertising on billboards and on the radio stations you listen to as you drive around town. The often hilarious commercials are parodies of real-world advertising and they're one of my favorite aspects of the game. This is a case where the introduction of real-world ads would likely detract, in my opinion, unless it was done very carefully.

Gamers, in-game advertising has been around for a while now. Is it adding anything to the experience for you?

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