What you need to know:

• Gaming advertising in Australia this year surpassed news media advertising for the first time – though it's still low compared to the global gaming ad spend of over $70 billion annually.
• Despite over 80 per cent of adults in Australia gaming, undercooked ad dollars are prompting questions about its identity as a channel, audience, or topic.
• In-game advertising can be simple (e.g., banners) or sophisticated, with examples of successful campaigns improving user experience and brand visibility.
• Brands like Garnier have reported significant success with gaming ads, achieving high engagement rates and meeting business objective. And campaigns that move beyond the boundaries of specific games have experienced dramatic increase in user engagement and revenue through an interactive promotional strategy.
• That's why agencies emphasise the need for brands to understand the diverse gaming audience, from hardcore to casual gamers.
• Agencies say the gaming industry needs to clarify its identity to better engage advertisers

Gaming captured more advertising than news media in Australia for the first time ever this year.  The category's revenues blew through the billion-dollar benchmark and within four years, that will double, per PwC. Around the world spending on gaming advertising exceeds $70 billion annually.

The figures contained this year's PWC Media and Entertainment report confirm the slow march of gaming up the advertising priority ranking, with an emphasis on slow.

According to PWC, advertising revenue in digital games is growing: "In-app advertising and integrated advertising (equivalent to product placement within a game scene) are expected to increase by 7.6 percent CAGR to reach A$2.1 billion by 2028."

There are also some powerful crossovers with other channels. For instance, according to TikTok, "50 per cent of daily users on TikTok [worldwide] watched gaming-related content in 2022, amounting to over 3 trillion views. 82 per cent of gamers on TikTok play games weekly. After seeing gaming content on TikTok, 41 per cent downloaded the game and 36 per cent purchased to play."

Gaming's share of advertising will grow to 7.4 per cent of the total advertising spend by 2028 even though almost 80 per cent of the adult population say they game – and historically advertising follows eyeballs. What gives?

Measurement and validation remain problematic, according to Vanessa Adams, VP Media Measurement and Data Solutions for Cint, an advertising analytics platform, who sees an interesting dynamic opening up.

"With a lot of a lot of measurement these days in media or in different channels, it's hard to validate gaming against those other channels, because it's just so niche, I guess. But if you depends on how it's considered. If it's considered as part of just digital video channels or if its up against TV, gaming hardly ever gets picked up, to be fair. So, but it is punching above its weight in terms of audiences that it's actually attracting."

A big part of the issue is the gaming industry itself which has struggled to settle on a message or even a definition. Is gaming best defined as a channel, an audience, or a topic, or a combination of all three?

The most limited view of the market is restricted to in-game advertising. This could be as simple as an in-app banner, or it could involve sophisticated in-game executions where clients work their agencies and games publishers to build the experience of the brand into the experience.

A review of gaming Reddit reveals an audience that embraces advertising when it improves their experience.

Call of Duty players in a subreddit entitled Which Game Had the Best Advertising brag about the advertising in their games. According to one player, "Black Ops II, bar none. The advertising was equally as memorable, all over the place and fun as the game itself."

Another wrote, "BO2. No cap. But I liked the advertising of MWII [because] as a Mexican, I was hyped and happy to see the Mexican special forces being featured in the game with Graves saying: Mexican special forces, 141, they are your brothers now!"

Some brands are undoubtedly finding success.

Earlier this year cosmetics brand Garnier ran a campaign across a variety of games and devices. The company partnered with gaming advertising platform iion and Amplified Intelligence, the Karen Nelson-Field led provider of attention measurement tools and services.

The "Around the Game" display and video ads ran from March 4 to April 13, 2024 reaching 674,343 impressions, and achieving what the parties claimed was 7x the industry benchmark in video game ad attention.

More importantly, they claimed, it ticked off four key business objectives by boosting brand visibility, setting "new benchmarks in ad recall", increasing brand familiarity, and crucially, improving purchase intent.

According to Alex Khan, Executive VP, global partnership and strategy, at Amplified Intelligence, the campaign demonstrates, "that gaming advertising is becoming a natural addition to brand media schedules as it enables the brand to connect with audiences when they are engaged and that brands can resonate with these audiences and look to drive mental availability and brand recall".

R/GA on the other hand flipped the script in a campaign it worked on for the game Battle Cats which demonstrates how the gaming community is not constrained by the boundaries of the game itself, but instead melds seamlessly into other digital environments.

The campaign ran in September and involved an international team working across Japan, Australia, the US, Argentina, and Singapore.

According to Anthony Baker, managing director, R/GA Japan, the goal was to grab attention for Battle Cats amidst the 700,000 other mobile games out there. In an approach he described as "sabotaging our own 10th-anniversary celebrations," the firm launched what it called a true game of cat and mouse.

"Players found themselves on the hunt for clues, in the game and on social media, in an attempt to help narrow down the number of suspects and find the perpetrator so that they could restore the celebrations. There were motives, plot twists, red herrings and loads of conspiracy theories about which cat had committed the crime," he said.

"When accusation time came, we rewarded correct guesses handsomely. And in the end, one final, epic twist, as we revealed that the in-game enemies were behind it all along, tired of always losing to the cats. During the campaign we released clues, hints, influencer videos and loads of additional content to keep the hunt alive, breaking every promotional record in the game's history."

As a result of the campaign Battle Cats achieved its highest daily average users ever with a 135 per cent increase in new players, a 721 per cent uplift in return players, and a 231 per cent boost in revenues.

That approach – meeting the community not just in the game but outside of the boundaries of the game, and in the other areas of their digital life speaks to an ongoing debate amongst the advocates of gaming advertising: what does advertising in gaming, or to gamers, really mean?

Agencies say a big part of the problem is that gaming is suffering from an identity crisis – is it a channel, a topic, or an audience?

According to John-Paul MacCormick, head of performance at Havas, "I think the gaming industry itself is probably at a bit of a loss to describe themselves... It's like saying music is a media channel. It's just so broad and so out there."

MacCormick stressed the need for brands to understand the nuances of gaming.

Some of the categories can feel commoditised, he suggested.

"With in-app banners feels less like you are targeting gaming specifically and more like time-filling. It’s like the modern version of the crossword.”

Beyond the commoditised view, a much better approach, he said "... is to consider gaming more like an involved community of like-minded individuals that surround themselves with others from that community.”

Some clients, he said, still cling to traditional – and the industry would argue outdated – views of gamers as basement dwellers, and that can create some fear.

“When I look at it, I see the opportunity from a creative perspective to reach this really untapped community."

MacCormick (himself a gamer) told Mi3, "I look at it as a real opportunity for brands, and from an audience perspective, it can often go really quite broad, depending on your product as well."

“If you're a scalable product, then there's probably a market for a younger audience."

He offers the example of V Energy incorporating itself into modding (where players can modify the game to enhance its features) and into the game Fallout, which he describes as a really good mix.

MacCormick didn’t work on that particular campaign but he said that’s a useful, if traditional, way of looking at gaming.

“Energy drinks go really well with gaming, snacks, brands like Doritos go really well with gaming where you have that younger audience.”

But there’s no reason for brands to limit themselves to that view.

"There’s no reason you couldn’t use gaming to target older audiences – in their mid-thirties with a decent income – for a car launch for instance," he suggested.

But he puts that onus back on the gaming industry itself, rather than the brands. “I think the gaming industry probably needs to work out its own identity a little bit to help itself out.”

His colleague Phil Pickering, head of strategy at Havas Host, previously worked closely with gaming during his stint at Pedestrian Media working on mastheads like Kotaku. He said it’s important to understand the different types of gamers.

“I think, unfortunately, what happens is everyone just assumes everyone's a hardcore nerd gamer. If you actually went quizzed everyone you know, I think you'd find that most people would have a game of some kind on their device that they would play, but they would never call themselves gamers.”

Of course, there are the hardcore gamers, he said.

“They'll spend six hours or seven hours plus on a game, and they'll be fully immersed in it. They'll play it, and they'll have a bunch of friends that they're really close with, and they'll tap in on voice comms, and they're really into it. And then you have really casual gamers, maybe on their way to work, and they just want to fill in a block of time.”

Affinity

Bench cofounder Ori Gold says, "These are not massive budgets but brands can get good results."

"When it's an endemic client (like a device, or an electronics manufacturer) there's a lot of crossover in the channel, the topic, and the audience. They coalesce into one and usually, that's where we see the best returns. For me as an agency, there's a very easy conversation. There's s a lot of relatability with the marketing team. They understand that, it's easy to grasp, and they are usually more comfortable with advertising.

"What we love to do, and what you can do today but couldn't do a few years ago, is to extend it beyond the topic and the channel and focus on the audiences. This is usually the work that we see as the most important to get an effective incremental lift with our customers. The affinity of that audience to the product is very important."

"With non-endemic audiences, there's still a lot of concern and  a lot of hand-holding."

"From the customer's point of view, they see it as similar to other new channels, digital audio for instance. When there's a good fit, those who dare, those clients who test and learn can gain competitive advantages on those channels – because other brands have dumped it into the too-hard bucket.".

Discussing the results of an electronics client he works with, Gold told Mi3,  “For this campaign, we leveraged video ads, both pre-and mid-game (non-rewarded), as part of a broader media mix. The results showed a significant positive impact on brand metrics and audience engagement KPI.”

He contrasted those results for that endemic client, with a drinks brand that fits more into the non-endemic category. In the latter instance, Gold said the results were still solid, although more mixed, compared with other channels.

“Their marketing team identified a strong affinity with certain gaming audiences. As part of a larger media mix (gaming accounted for less than 10 per cent of the total budget), we used in-game display ads, such as billboards within game environments.”

According to Gold, “Our study revealed decent recall and some brand uplift, though it was less effective compared to formats like DOOH and video. Our takeaway is that gaming can complement brand recall but works best as a small component of larger, sustained brand awareness campaigns.”

For Rupert Pay, APAC head of sales for gaming advertising platform iion, brands who think of gaming as an audience "are almost certainly ahead of the curve compared to those that see gaming purely as a 'channel,'" he suggests. "Recognising gaming as an audience signifies an understanding of evolving behaviours in digital media consumption – behaviours that gaming uniquely caters to in ways other digital media cannot match or only touch upon to a limited extent."

Emphasising the issue of attention, he cites Bain & Company’s annual Media and Entertainment Review, Creativity Can’t Stand Still, drawn from a Consumer Media Consumption Survey of circa 5,000 respondents.

"The data reveals that 75 per cent of social media users are simultaneously engaging with other media, with only 10 per cent self-reporting as 'fully engaged.' A distracted audience for the content translates directly into distracted attention for advertising. Streaming video doesn't fare much better, with nearly two-thirds (65 per cent) of viewers also multitasking with other media. This stems from the inherently passive, one-way nature of these formats."

In contrast, gaming is fundamentally different. It demands active participation, attention, and focus – qualities that stand in sharp opposition to the prevailing norms of digital media consumption. For brands, this is a compelling proposition. A more attentive audience is arguably more likely to drive stronger performance across key brand metrics such as awareness, recall, and even deeper engagement – metrics that are harder to achieve in less immersive environments.

As to whether gaming should simply be considered a channel, he said that approach is relevant only if it is directly compared to other existing digital investments.

"This focus is central to much of our work at iion. Rather than concerning ourselves with perceived competitors within the gaming space, our priority is to demonstrate gaming’s effectiveness relative to dominant digital channels like VOD and social media, where the lion’s share of budgets currently flows."

Pay said that while it’s still early days to draw definitive comparisons, emerging studies globally are beginning to validate two critical insights.

"The first is that attention is becoming increasingly valuable in an ever-more distracted digital landscape, and second, that gaming offers a uniquely attention-rich environment. "

He's actively encouraging brands and agencies to test gaming advertising alongside these established digital channels, particularly video formats.

"Encouragingly, we are already seeing early signs of success – green shoots that we anticipate will grow significantly as we move into 2025."