Police! Freeze! Do You Accept Visa?

By Kasia Gruszkowska
Newsweek International

Feb. 27, 2006 issue

You are the world's best undercover agent on a secret mission behind enemy lines. You've got your state-of-the-art weapon, body armor, night-vision goggles—and minty-fresh breath, thanks to Airwaves chewing gum. Wait a second—chewing gum?

Welcome to the world of high-profile videogame advertising. Videogame makers began putting real products in their games about a year ago, mostly as fixed advertisements—products featured on billboards or as props in the game—and advertisers have embraced the new medium. In Ubisoft's Splinter Cell: Pandora Tomorrow, agent Sam Fisher has to retrieve a message from a certain Sony Ericsson cell phone in order to move forward in the game. The firm's soon-to-be-released CSI: Three Dimensions of Murder has cops solving a crime by making use of Visa's fraud-protection services. Music also lends itself to video-game ads. Ubisoft has placed one advertisement for a band in Splinter Cell: Chaos Theory, and plans to do more.

The rise of online games means that game makers can change product-placement ads to cater to different consumers at different times—more like ads in that other video medium, television. For example, videogame advertising firm Massive, based in New York, coordinated a campaign for Warner Brothers in which online gamers playing Ubisoft's Splinter Cell saw ads for "Batman Begins" that were timed to when the movie was being released in local markets. Last summer, Funcom's game Anarchy Online featured audio ads triggered by the player's avatar. Walking past a billboard ad for a movie, for instance, triggers an audio promotion for the film. Similar ads will soon appear in Sony Online Entertainment games Matrix and PlanetSide.

Driving the trend is a change in the demographics of video-game players. The average gamer is not so much a teenager as a young investment banker with above-average education and income. Whereas men 18 to 34 watched 12 percent less TV last year than the year before, they spent 20 percent more time with the videogame console. "Games today are more mature and are catering to an older audience," says Deborah Coster, spokesperson for the Entertainment & Leisure Software Publishers Association. Industry executives are excited at the prospect of reaching these consumers. "You go where the eyeballs are," says analyst Michael Goodman of research firm the Yankee Group.

Massive has led the way in videogame advertisement since its founding in 2002. Mitch Davis, the company's founder and CEO, got the idea for tying ads into games while playing Grand Theft Auto: Vice City. He noticed that the game depicted fake advertising for a clothing firm called Goop, a play on Gap. "It struck me immediately that there was a way to change that advertising, in a way that would make it look better by adding realism and providing a new source of revenue for the industry," he says. Since then, Massive has signed contracts with high-profile game makers including Sony Online Entertainment, Ubisoft and THQ.

The key to the success of videogame ads is the ability to fold the product realistically into the game. Advertisers can place products and billboards only where the player might encounter them in real life. For instance, a movie billboard in the jungle just wouldn't do.

So far, gamers seem to accept the ads. And they tend to remember them. Independent tests by Nielsen Entertainment show that videogame ads are remembered two and a half times better than television ads. That's good news for advertisers, at least for now. As gamers get older, they may also grow more skeptical.