Google, the current force in online advertising, could now
be looking to expand its reach into the video game space. According to the Wall
Street Journal, Google is in talks to acquire Adscape Media, a company
whose technology allows for in-game advertising.
The move by the search giant could be an effort to compete
with the software giant. Last year, Microsoft acquired Massive
for its technology that allows dynamic delivery of advertisements to gamers in
online games.
While Microsoft paid close to $200 million for Massive, Red Herring sources say the Adscape deal may only cost Google a bargain; between $20 million
and $30 million USD.
Representatives at Google and Adscape are not commenting on
any possible deal, though the search company did not deny its interest in the
video game space. “We are always considering new ways to extend Google's
advertising program to benefit our users, advertisers and publishers. In-game
advertising offers one such possible extension among many others,” said a Google
spokesman
Although in-game advertising is still in its infancy, the
online capabilities of the new generation of gaming consoles represent a huge
opportunity for advertisers. Research firm Yankee Group last year estimated
that the in-game advertising market could
reach $732 million by 2010.
“Although the in-game advertising market is still relatively
untapped, its promising business model will lead to swift market development,”
said Yankee Group senior analyst Michael Goodman. “Effectively competing in the
interactive gaming market for the video game and advertising communities
requires careful attention to the intricacies of the industry.”
Game publishers such as Electronic Arts view in-game
advertising as the next big source of revenue, but gamers may see it as the
next big annoyance. Those who bought Battlefield 2142 were surprised to learn
that the game incorporates technology that tracks certain user
information, such as IP address and other information, to aid in the
delivery of targeted ads.
IGA, the firm that provides advertising technology to EA’s
Battlefield 2142 game and rival to Massive and Adscape, is not surprised to see
Google’s interest in the emerging market. “Google and MSN and Yahoo are always
looking for different mediums,” said Ed Bartlett, VP publishing for IGA Europe,
in a conversation with Next
Generation. “There’s been such a marked and rampant decline in
effectiveness and eyeballs with traditional media that they’ve had to
accelerate, and this is part of that process.”
Bartlett adds, “In-game advertising has suddenly taken off.
Our reach this year is going to be in line with a mid-sized T.V. network. We’ve
got all these eyeballs that were watching T.V. that are now playing games and
they’re in a completely engaging environment. They’re not off making a cup of
tea or doing other things, so it’s certainly a very, very interesting space for
people who want to be major players in advertising.”