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Sony forms in-game advertising group

Filed in adscape, google, in game ads, news, playstation home, sony, October 9, 2007, 5:38 pm by Jeff

Yesterday Sony Computer Entertainment America (SCEA) announced that it was forming a new in-game advertising business unit. The unit is to be headed by Darlene Kindler who was previously VP of Publishing for Adscape Media.

The announcement did get some press - I saw it mentioned on Gamasutra & Kotaku - but I was expecting more in-depth coverage. What I found most interesting about the announcement was that the technology is solely focused on delivering dynamic in-game ads to PlayStation Home (at least for now).

Adding advertising to the Home environment is a no-brainier - Sony has been hinting at this possibility since the Home announcement @ GDC earlier this year. But constraining the new team by focusing solely on delivering Home may neglect opportunities to build a more attractive platform for PS3 publishers. To my knowledge, there is no in-game advertising technology serving dynamic ads to PlayStation 3 games.

Without building a large network of games (which provide a variety of content and experiences) they place a constraint on the reach and demographic of their customer base. You could make the analogy to the web by thinking of Home as a single web site. Selling ad opportunities on that site will be generally more difficult than selling a network of sites that provide customers with different experiences. A network size of one limits the potential set of advertisers interested in your product.

What was also interesting to me was the appointment of a former VP of Publishing for Adscape. I think this supports much of what I’ve blogged previously - that Adscape was acquired primarily for its technology (and possibly patent) portfolio - and not for its industry relationships.

On that topic - I’m interested in hearing more from Google about what’s going on with Adscape these days. http://www.adscapemedia.com/ no longer forwards to the Google acquisition FAQ and I haven’t heard any news since the July appearance at the Seattle Casual Connect games conference (link). Anyone know what’s going on over there?

Sources:

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Google has acquired Adscape

Filed in adscape, google, in game ads, news, March 17, 2007, 12:13 am by Jeff

Today Google confirmed that indeed it has acquired Adscape Media. As posted by Bernie Stolar on the Google Blog:

… we are so stoked to join Google — because these guys get it, and are committed to helping us continue our mission. [Source]

A FAQ has been posted, but doesn’t offer financial details.

But, there are two interesting items:

Q. Do you already have deals signed with game developers?

A. We have been in discussions with many in the game development community and hope to partner with both large and small game publishing companies.

… This seems to be a step backwards from June 6, 2006 when CEO Chris Gilbert claimed “though we have several deals signed, we can’t discuss them publicly until they are formally announced.” [Source] — Note how “deals signed” has turned into “discussions with”. I’m not going to keep holding my breath.

Also, this caught my eye:

Q. Given the dramatic growth of the gaming market in recent years, how much advertising market share does Google hope to gain from this acquisition, both immediately and over time?

A. We don’t release specific projections but we think there is great value in video game advertising. As more and more people spend time playing video games, we think we can create opportunities for advertisers to reach their target audiences while maintaining a high quality, engaging user experience. That said, we will test ways of successfully implementing this form of advertising and Infinity’s technology will be instrumental in those tests.

Q. Where does Google see in-game advertising going in the future, in terms of both revenue and the technology itself?

[exact same answer as above] …

… What is this “Infinity” technology? Is this an internal codename for Adscape? I don’t know of any announced Google technology or in-game advertiser named Infinity. Anybody know if this is more than just a simple mistake?

My previous posts about Google:

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Confirmed: Google Buys Adscape

Filed in adscape, google, in game ads, February 17, 2007, 4:31 pm by Jeff

RED HERRING confirms this week that Google will indeed buy Adscape media for $23 million. This comes a month after it was rumored that Google was interested in purchasing the in-game advertiser.

I wrote about this rumor last month. See the previous post: Rumor: Google to Buy Adscape.

In that post, I speculated that Google was really after the Adscape technology portfolio so that it could be applied to real-world advertising. Adscape still hasn’t confirmed any relationships with game publishers/developers and RED HERRING downplays the in-game angle, saying “an Adscape acquisition gives Google little beyond a few interesting patents.” The RED HERRING source only bolsters my earlier opinions.

But, let me play devil’s advocate for a few moments. What if Google isinterested in breaking into in-game advertising? Could they be successful?

In my opinion - not easily… Google excels at “automating” advertising markets. That is, they have tools that help advertisers perform research, purchase placement, target specific audiences, record click-through/conversion, invoice and share ad revenue with placement providers. Porting these tools and processes to support in-game advertising will be a major undertaking. Consider some of the following challenges:

Non-standard media formats (ie: DXT1 vs DXT5 vs JPG vs PNG vs [insert custom developer format here]).
Non-standard media sizes (ie: 256×256 vs 128×1024 vs. 200×600, vs. [insert custom texture format here]).
Non-standard visual appearances - ads must look appropriate in dramatically different gaming environments (ie: compare the visual experience you expect in a brightly lit sports stadium to that of the dark stealthy world of Splinter Cell).
Tools to support various gaming engines - (ie: Unreal vs. Doom 3 vs. Source vs Torque, etc…)
Tools to support various gaming platforms - (ie: Xbox, Xbox 360, PS2, PS3, Wii, Windows, Mac, Flash, etc…)
Tools to measure ad effectiveness for advertisers - How do you count “impressions”? How do you allow users to interact with advertisements?

I can’t comment on what is automated vs. supported vs. not-supported here at Massive, but I can tell you this stuff is hard! A company that only boasts a small patent portfolio and has no announced relationships with shipping titles probably hasn’t worked through all these issues yet. Which means Google has a lot of work ahead if it intends to serve in-game ads…

Rumor: Google to buy Adscape

Filed in adscape, google, in game ads, rumor, January 22, 2007, 12:01 pm by Jeff

As reported (paid subscription required) in the Wall Street Times yesterday, Google is considering acquiring Adscape Media. Last week I speculated that such an acquisition would be unlikely for Google. With all the press - let me take a closer look at Adscape and what might make them attractive to the search giant.

Why In-Game Ads?

There are a few reasons why Google would consider getting into in-game advertising. Perhaps Google feels the need to “keep pace” with Microsoft. This might be a response to Microsoft purchasing Massive, or it might be an effort that aligns with their foray into radio, and newspaper/print advertising. Or, perhaps there is some specific technology behind Adscape that Google wants to lock-up.

Keeping pace with Microsoft is no easy feat - companies either need to invest a tremendous amount of resources, or redefine the marketplace to carve Microsoft out (see Scoble vs. Winer on Microsoft Innovation). To my eyes, it appears that Google is trying the latter approach by pursuing non-WWW advertising options.

In 2006 we saw Google purchase a radio advertising company, explore newspaper advertising, and most recently file a patent on digital billboards. Here there is no direct competition from Microsoft and Google is going to learn a lot about targeting consumers off the web and with little user-context. There are tremendous rewards to be gained from digitizing real-world advertising (think better targeting, easier ad or campaign rotation, measurement, etc…). In-game advertising gives Google a platform to test & refine these technologies before going mainstream.

So, why Adscape?

Adscape boasts their unique “AverPlay” technology allows publishers to activate and deactivate “ad spots” remotely and dynamically. They also claim to have a proprietary “two-way connection between in-game ads and the real-world. Real World/Virtual World Gateway (RVG) enables two-way text, audio and video communication via SMS Text or eMail.” (source, click Technology).

As a gamer this sounds very intrusive, as a publisher this sounds like a mixed message. They claim “a priority of Adscape Media is to ensure the deployment of ads into games does not detract in any way from the game experience.” - yet their flagship technology is intended to provide interactive advertising. In my opinion, using SMS to interact with advertising sounds better suited for real-world billboards, than their virtual counterparts.

In fact, I can’t seem to find any Publishers that have signed with Adscape. Their site doesn’t mention any titles in their network. Their CEO Chris Gilbert claimed (7 months ago) “though we have several deals signed, we can’t discuss them publicly until they are formally announced.”

In the end, I think that’s what makes them attractive to Google - the technology itself, rather than the in-game opportunity. As Google tries to digitize real-world advertising by making it more interactive, they will need technologies such as SMS interaction. Adscape boasts 1 patent granted and 30 filed. In the end these technologies are what matter to Google, not the in-game market.

Google to do in-game ads?

Filed in google, iga, in game ads, predictions, January 11, 2007, 10:42 pm by Jeff

From Andre @ Ozymandias:

As promised, here are my game industry predictions for 2007 … Google will show significant public interest in the gaming sector for the first time, including interest in acquisitions to bolster their Ad-sense business. The most likely target will be IGA Worldwide (to combat Microsoft’s acquisition of Massive). If unsuccessful, Google will seek to acquire one of the larger game publishers on the market to gain a foothold in the in-game advertising market. Likely targets include Electronic Arts (though it would be extremely expensive), Activision, or THQ. (Source)

I don’t think we’ll see Google get into the in-game advertising space this year, and I certainly don’t think they’ll become a publisher. It just doesn’t square with their mission and their strengths. Google’s mission is to organize the worlds information and make it universally accessible and useful. They fund this by selling advertising that’s contextually relevant to its surroundings. Ads are placed alongside a set of search results, next to an email, within a 3rd party webpage, or even in a newspaper. In each case Google uses the surrounding context to determine the interests of the viewer.

Within a videogame this doesn’t make much sense. Imagine if advertising in a game like Rainbow Six Vegas promoted various Las Vegas shows or a local Las Vegas restaurant. To make the ads relevant to the gamer, an entirely different approach needs to be taken. Ads can’t be targeted based on in-game surroundings, but rather to what the gamer is interested in outside of the game world. A more effective advertising campaign might promote a show that’s in the same city as the gamer, or perhaps a certain beverage or type of car that the gamer might find appealing.

As for becoming a publisher? Forget it. When you think of Google do you think fun? I sure don’t.

Frag on.

– Fry