Google buys into in-game advertising

In-game ads are designed to integrate with the storyline and environment of the game

Google has agreed to purchase in-game advertising firm Adscape Media for an undisclosed sum. 

Adscape specialises in in-game advertisements which may appear as banners or pop-ups designed to integrate with the storyline and environment of the game.

An in-game ad could appear to players as a billboard or sign painted on the side of a building, for example.

In-game advertising could yield substantial gains for companies that get it right, according to Karsten Weide, programme director for digital media and entertainment at research firm IDC. 

"It really depends on what sort of game you have," he said. "The possibility to run dynamic ads in Everquest or World of Warcraft is fairly limited." 

But games that use modern environments, such as those set in large cities, could benefit from the added realism of embedded ads, said the analyst. "The ad must fit the story," he explained.

Weide suggested that Google's acquisition of Adscape was primarily motivated by two factors.

Firstly, Microsoft purchased in-game ad firm Massive Inc last year and used some of the firm's technology to place ads in its Virtual Earth 3D mapping application. 

The move put Google, which relies on advertising for 99 per cent of its revenues, under pressure to get into the field as well.

Secondly, the search firm also has to keep up with lofty Wall Street expectations, and its early success means that it is now obliged continually to turn out big profits or take a hit in stock price.

"Google has put the bar very high, and needs to keep growing," explained Weide. "Its growth last year was coming off the tremendous growth in search ads. But Google cannot keep the fire burning with just search ads."