Videogames: The New Marketplace

Ten years ago, video games were a way to kick back, relax, and slip away from reality and its demands. Not anymore. Now marketing has moved beyond the bounds of physical reality into the expansive, utterly limitless realm of the virtual world, which has, itself, expanded to include not only traditional games like Mario Brothers, but also interactive imitation-life games such as Sims 2. The question then is “what will marketers have to do to harness this new medium?” The answer: everything they’ve always done, only now with a new twist. The beauty of the virtual world is that it very closely mimics its physical model meaning that marketers are free to use many of the same techniques that have served them so well in the past. Traditional video games provide the opportunity for traditional marketing tactics, whereas modern imitation-life games offer the chance to interact with and learn from consumers. The trick for marketers will be to make use of every unique opportunity the virtual world holds over and above reality.

Product placement in traditional video games, according to USA Today, has been part of the gaming world since the 1980’s when Sega decided to include Marlboro banners in its arcade racing games. Now, however, interactive product placements are part of the mainstream (see picture to the right). “Advertisers are figuring video game advertising into their budgets; money previously spent on TV and print is now being redirected to in-game advertising,” according to About.com. The next step some companies are already taking is placing actual ads in between the levels of traditional games. This choice is being met with a certain amount of unease by some in the industry who fear that by presenting targeted messages, advertisers might alienate the very consumers they hope to attract. A study undertaken by Neilson Entertainment and Activision revealed much more hopeful data. Jason Tuohey of Medill News Service reported in his article, Invasion of the Videogame Ads that 35 percent of male gamers say in-game ads help them decide which product to buy, and that over 50 percent of "heavy gamers" liked having real ads in the games because of the tone of authenticity they lend to the experience.

It is this quest for virtual authenticity that has spawned so many “imitation-life” games whose popularity extend across age and gender lines in an interactive approximation of reality. These are the games that have advertisers so excited, and it is easy to see why. Sims2 and others like it provide a life-like environment through which consumers navigate as they create families and homes, hold jobs, design products of their own for sale within the digital world (see picture to the left), and most importantly, interact with virtual versions of branded, physical products. While some are skeptical of the benefits to be gained through advertising budgets spent in virtual worlds, many are embracing this medium as a means of solidifying brand loyalty and encouraging brand experiences. As the USA Today article “What's in a name: Product placement in games,” states: “Play Crazy Taxi and a lot of your passengers will ask you to take them to Pizza Hut or KFC … Dive into Die Hard: Nakatomi Plaza...and you'll see Zippo lighters and Motorola cell phones…” By placing brands within easy reach of consumers in the virtual world, advertisers provide one more venue through which consumers can view, test, and interact with their products, hopefully leading to increased purchase behavior in the real world.

One thing I was surprised to note while reading through studies and articles exploring the significant prospects this medium offers was that companies seem to be missing out on an important opportunity, namely consumer research. The completely digital nature of virtual worlds would allow marketers to obtain substantial amounts of natural observation data that would be impossible to collect otherwise. The most effective consumer research is obtained through contextual research where company representatives spend time with consumers in their homes and observe how they use particular products. Observations from these sessions can lead to critical insight into the consumer mindset that can eventually culminate in the discovery of a breakthrough product. The downsides to this type of study rest mainly in the substantial cost in time and money as well as the potentially confounding effect of an outsider’s presence. The Observer Effect can lead to changes in behavior that might affect the data collected at the time, but in the virtual world, there is no danger of that. True, there is slightly less depth than comes with face-to-face personal interaction, but far out-weighing this drawback is the sheer quantity of product and brand knowledge, uninhibited by outside influence, and deeper than objective survey data, that is readily available. So far the marketing industry has done a relatively good job of keeping up with technological evolution and the opportunities presented by it. I am sure that in the coming years they will take full advantage of the wealth of information to be gained from casual, interactive gaming sites.