Google vs. Gaming

Does Google's recent in-game advertising patent present a dream come true for marketers, a nightmare for gamers, or something in between?

Google Inc. has gone from an obscure research product to a household name in roughly a decade. Based on the idea of a search engine built around linked websites and commoditized searched keywords, the company has since expanded successfully into other areas. Offshoots like Google Video and Gmail would probably be enough to lift a single company and bolster the dot-com darling's already expansive reach.

Being the ambitious company that it is, Google is always on the look out for potential acquisitions. In particular, the purchase of AdScape seemed to be an indication that Google would make its presence felt in the in-game ad sphere. Still, the established powers of the industry, while calling it a validation of their advertising medium, seemed unconcerned, with Massive CEO Cory Van Arsdale saying, "We've got quite a head start here" and IGA's VP of Publishing for Europe Ed Bartlett saying he was "not particularly concerned." Jon Epstein, CEO of Double Fusion, added "We haven't seen a particular impact on our business nor do we expect to."

True enough. Google's impact in the in-game ads space has yet to be felt, but the company may have recently landed a patent that could potentially change the face of this burgeoning market. We caught up with Alison Walton, Head of Visual Engagement of Bunnyfoot's Behavioral research department, and Justin Townsend, CEO of IGA Worldwide, and plied their differing views on this new patent.

Powerful tool for advertisers

What's unique about this recently granted patent is that it can look at both game data and in-game conversations and be used to serve highly targeted ads. As the patent itself puts it, "Embodiments consistent with the present invention allow information about a person's interests and gaming behavior to be determined by monitoring their online gaming activities (and perhaps making inferences from such activities). Such information may be used to improve ad targeting. For example, such information may used to target ads to be rendered in a video game being played by the person."

Now, heretofore in the in-game advertising realm, ads are generally determined while the game is in development. Even if they are dynamic and can be changed after the game is released, they typically are placed based upon a very wide potential consumer demographic. This new technology by Google could make in-game ads relevant on a personal level, making them more likely to be significant on a user by user basis.

"I think it'd be extremely useful for advertisers, because it's delivering key messages about consumer behavior," expressed Walton. "They'll be getting more information about user habits, so yes, it is taking consumer data one step further to help the advertisers deliver a more engaging message. It will be useful, but there are limitations because we need to understand what they're engaging with not just on a visual level but an emotional one as well."

"There's huge potential in this," she continued. "There is a recognition of the current limitations of segmenting in trying to target ads to consumers. That's what we talk about all the time, so it's great that other companies are thinking about it. We're all about moving the industry forward, so it's a great move. There is a fear that our industry is all about billboards and we need to look at the industry from a different perspective to help expand it. At the same time, we need to do this without pissing gamers off, which is a consistent issue that we need to address."

"I take a step back, and look at this from the advertiser's perspective, then certainly it's the holy grail. The more I know about my consumer, the better I can deliver advertising to them. But there's a huge gap between what I want and what's feasible. Converting that sort of data into information that can be used just isn't done that well yet," said Townsend. "In order to make something like this more palatable to gamers, they need to be doing two things: make it opt-in, which would make it transparent, and second, give gamers an incentive to sign up.

It could be info like where you live, education level, email address and you give something back as an incentive. We're seeing more and more second and third tier publishers supporting games for free using something similar."

Powerfully annoying for gamers

While all this information being relayed back to a server is all well and good for Google and advertising companies, consumers may not be as thrilled. After this patent became publicly known, it immediately raised privacy concerns because of its inherent nature. The thought of a game "reading your mind" and offering contextual ads (food if you are hungry, a sturdier brand of car if you crash) via the decisions you make or even the conversations you have would not likely be welcome by most gamers, especially the hardcore set that are often resistant to the presence of any advertising in games.

"It's a concern, so you have to think about it," said Walton after considering the question. "But if it's done the right way, it shouldn't be a problem, so long as we're not invading the user's space. We won't know until we test it, though."

"In-game advertising is an 'awareness' gathering industry so we have to be conscious what people think of our ads," ventured Townsend. "Publishers are very conscious of data issues; they just won't sanction it easily. All [IGA] needs to serve an ad is an IP address and the only reason we want it is to serve to the right country. We then destroy it, and we let [the advertiser] know what country we served the ad in."

"We aren't going anywhere near this with our technology," he continued. "People on the net are very savvy, or at least very suspicious. Blogs last year were abuzz about in-game advertising as spyware when it's not. I've spent a long time speaking with people to emphasize it is not and I'd like to add once again, for the record, that it's not. I can't imagine the consumers agreeing to give private data like this."

But will it add up to anything?

While this new in-game advertising technology may appear succulent to advertisers and abhorrent to gamers, it is all academic at this point. Google has publicly stated it does not officially have plans for the patent, at least not in the short term. One thing's for certain: the acquisition of an in-game ad company and patenting a new, disruptive technology is certainly an aggressive move towards the sector.

When asked if the technology could be used as an information gathering device as opposed to a platform for in game ads, Walton responded, "I think it's a combination of the two actually. It's Google right? Generally we don't know what they're doing next, but they're ahead of everyone else. They're using that data for two means – one, for in-game ads and two, for other areas for their business."

She noted that it seems like Google would be making a push soon into the in-game advertising sector and was excited by the idea of Bunnyfoot potentially working with the company. "I'm really excited by it. The combination of our two methods would elicit a large amount of feedback on consumer behavior. Of course ours is more sophisticated," she said laughing. "We'd love to work with Google and make sure their data makes sense. You can apply what we do to the research to try and not only make sure the ads are in the right place but also use it as a validation tool. A case of pre and post, really."

Townsend, however, was much less certain Google was going to move on the conventional in-game advertising space. "I don't believe so. It's more likely in the casual gaming area, which complements with the business of clicking on banners," he said. "I was surprised when I first heard about this. I was also surprised, and yet not, that they made the acquisition [of AdScape]. Google's business is based upon thousands of advertisers logging on and wanting their brands associated with certain words, which is a thousand miles from Madison Avenue. Banner ads in regular games that pull you out of the game aren't good, so we figure they were going after casual games."

When asked what he thought of this technology being in the hands of a potential competitor, Townsend responded, "I don't perceive Google as a competitor. I was asked that when Massive was bought by Microsoft, the 900-pound gorilla, and then later with Google, as the 2000-pound gorilla, and we've done well as the leading independent in-game advertising company. I don't see much overlap."

"The industry is still somewhat embryonic and as it grows up, it will be dealt with by legislative bodies. It will eventually balance itself out; it will just take some time to do, same as any advertising medium. We're becoming very significant, and in-game advertising is growing larger than online ads. It's treated as a separate media buy by advertisers, and that's very important. It's becoming strategic," he concluded.

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