In-game Ad Spending on the Rise: Insights from Latest IAB Report

Games Advertising: A Top Growth Area for Marketers

Games advertising has been identified as a top growth area for marketers, as highlighted in a recent report from the IAB. This report coincides with the launch of the annual PlayFronts marketplace, which offers various advertising opportunities within the gaming industry.

Eighty-six percent of marketers believe that in-game advertising is safe for brands. Additionally, 40% of them are planning to increase their investment in this area in the next year. In the United States, there are over 212 million gamers, and it is projected that advertising spending in games will rise from $8.53 billion in 2024 to $11.49 billion by 2027.

According to the report titled "Changing the Game," marketers consider games to be second only to social media in terms of effectiveness in generating conversions and purchasing influence. Games perform well in terms of click-through rates, with 67% of marketers rating game advertising as excellent or good in this aspect, surpassing the industry average of 65%.

Insight on Gaming Advertising:

In recent years, gaming advertising has seen a significant increase due to the rise in popularity of video games, particularly among young consumers. Marketers are recognizing the importance of games, with 86% stating that it is becoming more crucial for their company. A new report from IAB delves into the advantages of games advertising and how the industry is leveraging video game ads.

When it comes to plans for increasing spend in 2024, 40% of marketers plan to increase their budgets for games advertising, tied with digital video and surpassed by social, with 47% planning an increase. However, 10% of advertisers plan on decreasing spend for games, while 50% plan to keep their budgets the same. In comparison, only 7% of marketers indicated they plan to decrease spend on digital video and social marketing.

In-game advertising can take many forms, such as branded worlds, rewards, intrinsic in-game activations, advergames and sponsored content, among others.

According to the report, games advertising is easily measurable. 85% of survey respondents feel confident in measuring games advertising, and 68% use similar metrics for games as they do for other channels. This shows that the effectiveness of games advertising can be compared to other platforms. The most popular metrics used are ad engagement at 43%, followed by click-through metrics at 41%, conversions/sales also at 41%, and brand lift/other surveys at 40%.

The report indicates that games advertising has evolved from being just an experiment or gimmick for many marketers. In fact, 35% of marketers now have a specific budget dedicated to games advertising. Only 9% use research and development or experimental budgets for this purpose. Other sources of funding include general media budgets (33%) and device-specific budgets (23%). Additionally, 78% of advertisers run game advertising continuously throughout the year rather than as one-off activations.

"Changing the Game" is based on a survey of 300 brand and agency marketing leaders. The survey aimed to gather insights on how games advertising compares to other media, investment levels, and how marketers can participate in this space. The study was conducted through a partnership between IAB and Advertising Perceptions.

Editor's P/S:

The burgeoning growth of games advertising has captured the attention of marketers, as evidenced by the recent report from the Interactive Advertising Bureau (IAB). This surge in interest stems from the increasing popularity of video games, especially among younger audiences. Marketers recognize the significant impact games have on consumer behavior, with 86% believing that in-game advertising is safe for brands and 40% planning to increase their investments in this area.

The effectiveness of games advertising is supported by metrics such as high click-through rates and strong conversion and purchasing influence. In-game advertising offers various formats, including branded worlds, rewards, and sponsored content, allowing marketers to tailor their campaigns to specific target audiences. The report also highlights the maturity of games advertising, as 35% of marketers now allocate a dedicated budget for this channel, demonstrating its growing importance in the marketing landscape.