Player Engagement and In-Game Advertising: Jeffrey Bardzell, PH.D., Shaowen Bardzell, PH.D., and Tyler Pace

Player Engagement and In-Game Advertising
Jeffrey Bardzell, Ph.D., Shaowen Bardzell, Ph.D., and Tyler Pace

Jeffrey Bardzell, Ph.D., Shaowen Bardzell, Ph.D., and Tyler Pace
Executive Summary
In-game advertising (IGA) refers to the use of computers, the Internet, and video games as a medium for the delivery of
advertising materials. IGA is one of the fastest growing forms of advertising in terms of yearly spending and anticipated growth.
PriceWaterhouseCoopers estimates total spending on in-game advertising to reach $1 billion by 2010. The increasing popularity of
in-game advertising can largely be attributed to both the increasing popularity of video games in general and the desire to reclaim
the 18-35 year old male demographic, which is rapidly turning away from television towards video games.
In this paper, we present an analysis of physiological engagement with advertising-rich video games. Physiological engagement was
measured with OTOinsights Quantemo neuromarketing measurement platform. Analyzing the results from three separate physical
traces in combination with eye tracking and interview data, we present a series of five insights for the design and dissemination of
future in-game advertising.
Insights
1. More recent ads are more readily remembered.
2. Highly visible placement compensates for low brand knowledge.
3. Brand knowledge compensates for low ad visibility.
4. Engagement and brand recognition are positively linked.
5. Context-appropriate ads build positive brand associations.
User Engagement with In-Game Advertising
In-game Advertising
In-game advertising (IGA) refers to the use of computers, the Internet and video games as a medium for the delivery of advertising materials.
IGA is one of the fastest growing forms of advertising in terms of yearly spending and anticipated growth. The projected revenue growth for in-game
advertising and the ability to recapture the waning 18-35 year old male demographic has brought major attention to in-game advertising. Microsoft
and Google both acquired in-game advertising startups within the last three years: Massive, Inc., and Adscape Media, respectively. Additionally,
numerous other startup firms such as JOGO, NeoEdge, Double Fusion, IGA Worldwide, and Game Creative are competing in the new game
advertising arena. Finally, leading media firms are developing an increasing interest in game-based advertising. Among other in-game advertising
ventures, One to One Interactive partnered with Ubisoft to deliver Comcast branded advertising in the popular action game Rainbow Six: Las Vegas
and its sequel Rainbow Six: Vegas 2.
Even though the interest in in-game advertising is high, in-game advertising is a relatively new and growing domain; accordingly, research is also
in its infancy, as standard vocabularies and evaluative approaches remain in development. To facilitate our discussion of in-game advertising, we
begin by distinguishing among three general types of in-game advertising that have emerged: static, dynamic and online advertising.
Static In-Game Advertising

Static in-game advertising is the oldest form of in-game advertising and for commercial purposes dates back to the early 1990s, when sports
games began placing static banner ads for popular sports brands into their products (Figure 1).
Figure 1: Static In-game Advertising, FIFA Soccer 1994.
2008 One to One interactive Reproduction prohibited
Dynamic In-Game Advertising

Dynamic in-game advertising first appeared in the mid 2000s and depends on the relatively recent ability for video game consoles to access the
Internet. Network access enables game publishers to dynamically serve and change ads in games (Figure 2) based on a variety of criteria
(e.g., time, season, demographics, and geography).
Figure 2: Dynamic In-game Advertising, S.W.A.T. 2005. Advertisers are able

to swap ad posters in and out of the game at will.
Figure 3: Online In-game Advertising, such as the site for

The L Word in Second Life, is a 3D immersive and interactive
advertising environment.
Online In-Game Advertising

Online in-game advertising refers to immersive online advertising environments, such as the interactive areas in the virtual worlds of Second Life
devoted to The L Word, NIke, and the Pond. These 3D immersive advertising environments may include features ranging from simple street banners
to detailed recreations of a prominent building, car or other product (Figure 3).
Like all media, audience demographics are important to achieving success with in-game advertising. The video game market is typically divided
into two categories: casual and hardcore. Casual gamers are predominantly female, ages 35-49, and play games <10 hours a week, primarily when
they need to take quick breaks and relax. Hardcore gamers are mostly male, ages 18-35, and play games >15 hours a week. The present report
is focused on advertising aimed at the hardcore gamer market. In recent years 18-35 year old males, a key marketing demographic, have partly
transitioned away from television and movies, focusing more spending on video games, making video games the fastest growing entertainment
media sector (PriceWaterhouseCoopers, 2007). In-game advertising is seen as the latest medium through which advertisers can reclaim access to
these consumers and build brands with the latest generation of gamers
Male
18-49
15+hrs/week
Female
25-34
> 10hrs/week
44% Female
Ultra Casual/Non-Gamer
Casual
Entertainment
Looking to take a break and relax
56% Male
Transitional/Moderate
Social
May play as much as a professional
Primary motivation is to spend time
with friends and meet new people
Hardcore
Ultra Harcore-Obsessive
Professional
Play to Win, Regularly Increase Skill
Figure 4: Breakdown of Gamer Demographics (Entertainment Software Association, 2008).
One of the primary struggles with in-game advertising, especially when oriented towards hardcore gamers, is managing the level of context
appropriateness a particular ad has inside its game setting. Gamers are receptive to ads that are appropriate or natural to the game world.
Appropriate ads provide the opportunity for gamers to make additional connections between the game and reality through positive brand
associations. Figure 5 demonstrates an example of context appropriate advertising where Comcast, a regular sponsor of real world sports, has an
ad displayed in NBA Live 08 in a location analogous to that of real basketball arenas.
Figure 5: Context Appropriate In-game Advertising. Comcast is part of the

background table in a position where advertising normally exists in real
world NBA games (NBA Live 08).
However, not all in-game advertising remains context appropriate. Figure 6 shows a context inappropriate use of advertising in the Counter-Strike
first person shooter game. Counter-Strike is an open source game that allows for any person or company to perform edits to the game and rerelease
the software. In this example, a user edited the game to include excessive Subway advertising. Both Counter-Strike gamers and Valve Software,
creators of the closed source engine used to support Counter-Strike, took quick action to remove the extremely context inappropriate advertising
from their game world (Anderson, 2006).
Figure 6: Context Inappropriate In-game Advertising in Counter-Strike. In 2006 Subway

heavily advertised inside a military themed first person shooter game.
12.0%
10.0%
%
Despite the challenges of developing in-game advertising and matching it to8.0
a context
appropriate game setting, the in-game advertising market is
expected to grow rapidly in the near future. In their 8th Annual Global Entertainment and Media Outlook Report, PriceWaterhouseCoopers projects
that the video games industry will grow to $47b annually by 2010 (Figure 7).6.0%
4.0%
Media Sales in 2010
2.0%
Games
Movies
$ 47
0.0%
$ 104
TV
$ 227
Figure 7: Media Sales (Billions).
While $47b is a smaller market than television ($227b) or movies ($104b), the video game sector is the fastest growing form of advertising
media. The annual compound growth rate of games sales is expected to hit 11% annually by 2010, which is double the growth rate of movies
and television (Figure 8).
A high compound annual growth rate corresponds to overall advertising sales. According to both PriceWaterhouseCoopers and Yankee
Group, spending on in-game advertising is expected to grow from its current $90m to nearly $1b annually by 2011 (Figure 9).
12.0%
$ 1,000
10.0%
$ 800
$ 900
$ 700
8.0%
$ 600
$ 500
6.0%
$ 400
$ 300
4.0%
$ 200
2.0%
Games
TV
Films
0.0%
Figure 8: Compound Annual Growth Rate.
$ 100
$0
2006
2011
Figure 9: In-game Advertising (Millions).
Finally, advertisers are not the only party hopeful for the future of in-game advertising. Game publishers see advertising as a method for increasing
profits, offsetting escalating development costs and introducing new revenue models for the games industry, such as free-to-play ad-supported
games.
Study Design
1,000
The$effectiveness
of in-game advertising is a growing topic among advertisers, researchers and game publishers. Current metrics that measure in$ 900
game$ 800
advertising are primarily limited to ad impressions. Ad impressions have a troubled history as an effective advertising measure for web, print
$ 700
and other
traditional media. As evidenced by the work of the Advertising Research Foundation and others, measures of engagement are rapidly
$ 600
$ 500 impression based metrics for advertising research. In-game advertising is contained within one of the most dynamic, visually stimulating
replacing
$ 400
and cognitively
demanding media to date, and as such provides a very challenging and poignant medium for measuring engagement instead of
$ 300
$ 200
impressions.
$ 100
$0
2011
2006
The study presented in
this report explores
the use of a broader range of metrics for measuring in-game advertising. In particular, the study looks
at whether or not players actually look at ads, which and what type of ads they remember, and player associations with in-game advertising. To
achieve the goals of this study, a multi-modal approach to digital media evaluation was used, which combines traditional behavioral and interview
assessments of user experience with the measurement of biophysical responses while exposed to advertising materials.
OTOinsights Quantemo system served as the foundation of this study on in-game advertising. Quantemo allows for the simultaneous capture
of multiple biophysical responses (breath rate, heart rate, galvanic skin response, body skin temperature), in addition to eye tracking and click
tracking information. After recording the biophysical measures, Quantemo combines all of the measures into a single, representative measure
of physiological engagement. The Quantemo Physiological Index (QPI) serves as a single point of reference for the overall level of physical
engagement (or disengagement) exhibited by a research participant. Positive QPI scores represent stronger physiological engagement, while
negative QPI scores represent weaker physiological engagement. Analysis of eye tracking footage, QPI and interrogative data provide the basis
for the insights put forth in this report.
This study focused on user engagement of in-game advertising inside sports-based video games. Sports games are among the earliest and most
successful adopters of in-game advertising. Generally, advertising in sports games is both high quality and highly prevalent, giving participants
an optimal opportunity to engage with ads in the games. In total, 11 games were chosen for the study. Games were selected based on two criteria:
average industry reviewer score and type of sport. High average industry reviewer scores were used to ensure game quality and popularity
(highly rated games are often best sellers); we also sought to represent a variety of different sports. Multiple games for each sport (e.g., football,
basketball, racing, etc.) were used to account for variations in both advertised brands and implementations of in-game advertising.
Figure 10: Breakdown of Selected Games provides a breakdown of the games featured in the study. Each game is listed with its average industry
reviewer score as reported by Gamerankings.com, in addition to the median Quantemo Physiological Index (QPI) calculated using the data
collected from all study participants. As previously mentioned, positive QPI scores indicate heightened levels of engagement while negative QPI
scores indicate disengagement. Overall, QPI scores for games in this study range from a maximum of 2.3 for Guitar Hero 3 to a -2.074 for College
Hoops 2K7. The implications of high and low QPI scores in regards to the effectiveness of in-game advertising are discussed in greater detail
throughout this report.
Avg. Industry
Reviewer Score
Median
QPI
Burnout Paradise
87%
.608
College Hoops 2K7
81%
-2.074
Guitar Hero 3
86%
2.300
NBA Live 08
73%
1.132
NBA Street Homecourt
83%
1.805
Madden NFL 08
83%
-1.939
Project Gotham Racing 4
86%
-.609
Sega Rally Revo
77%
.124
Skate
87%
-.619
Tony Hawk Project 8
82%
-.604
VirtuaTennis 3
80%
.389
Games

Figure 10: Breakdown of Selected Games including average industry

reviewer score and median QPI.
Eight individuals participated in the study. The average age of participants was 25 with 2 female and 6 male participants (a proportion that loosely
represents hardcore gamer demographics). All participants were given a questionnaire, in which they identified their video game playing history
as well as knowledge about the sports represented in the games selected for the study. Average weekly video game playing was 7-10 hours and
average years playing video games was 6-10 years for the study subjects.
Each participant was shown prerecorded game play video clips from each of the 11 games. Game play clips, instead of live game play, were used
for several reasons. First, ad density and placement varies by game, and we wanted to ensure that each game the subjects engaged with had
reasonably comparable amounts of exposure to advertising. Additionally, hardcore gamers are also spectator gamers, spending a great deal of
time watching game play when not actively playing. Finally, biophysical measures are easily affected by various stimuli, and reducing a
participants physical activity is one means to control for extra noise in biophysical signals.
All game play clips were shown in a random counterbalanced order to account for the time at which an ad was seen. After viewing each
clip, participants were asked to fill out a brief questionnaire inquiring about their most and least favorite moments in each video.
Finally, after viewing all the clips, participants were asked to identify as many brands as they could remember from the videos. A list with both
real and false brands was provided to facilitate the brand recognition task.
General Findings
Several general findings were developed from the study. Primarily, these findings validate the research method, in addition to demonstrating
broad behaviors associated with exposure to in-game advertising.
First, the time a video was shown did not affect the level of physiological engagement with a video. It is important to balance exposure to the game
play videos and advertisements to control for users who might become disinterested with the study prior to completion. Disinterest with the study,
and not necessarily the content, can artificially impact the physiological measures recorded to calculate the QPI, especially with material presented
at the end of the study. In this study, participant reactions to videos were consistent regardless of when they were presented. In other words, a
video was just as engaging (or disengaging) when it was shown to a participant first, last or somewhere in the middle.
Second, participants physiological reactions and the resulting QPI calculations were consistent among the most and least engaging videos.
Consistent QPI scores for the extremes of the engagement spectrum provide early indication that the QPI is a consistent and reliable measure
of engagement.
Third, for 90% of participants, brands were remembered at a rate greater than chance, which demonstrates actual recognition based on their
exposure to in-game advertising. At the core of this study is the hypothesis that in-game advertising promotes brand recognition, and our results
confirm this hypothesis.
Insights
In the following sections, we summarize the findings from this study under the headings of the primary insights derived from analysis of the
QPI, eye tracking and interview data.
Insight 1: More Recent Ads are More Readily Remembered

Exposure to in-game advertising is largely directed by the forces of frequency and recency. Frequency refers to how often an ad is delivered to the
player during their gaming session. With some games, impressions might be delivered every couple of seconds, while in other games ads are
delivered more sporadically every few minutes. Analyzing for frequency and recency, we discovered that recency has a more potent effect on brand
recognition for in-game advertising. The majority (80%) of our research participants remembered all of the ads from the second half of each video
clip. This effect holds true even in the earliest game play clips shown to a participant. Additionally, Figure 11 demonstrates that while only 12% of
brands participants remembered were shown early in their game play clips, a striking 88% of remembered brands came from the end of game play
clips. Furthermore, QPIs tended to be higher towards the end of a game play session (where more brands were remembered), which lends further
credibility to the association between heightened physiological engagement and future brand recognition.
Average
% of Early Brands

Remembered Early QPI
12%
.23
% of Late Brands
Remembered
Late QPI
88%
1.26
Figure 11: Recency Effect for In-Game Advertising. Brands displayed later in
video clips were more likely to be remembered and correspond to a higher QPI.
This finding is consistent with the peak-end theory of memory, which states that once a memory moves from immediate short term memory,
people remember the peak (best) experience and the end experience in the most accurate detail (Kahneman, 1999). A combination of the
information density of video games and the length of game play sessions (30 minutes or greater) may limit the active recognition of brands to
game locations located at the peak or end of game play.
Placing ads in terminal game play locations, such as menus, finish lines, save points, etc., is one strategy for maximizing the strong recency effect
discovered in this study. Figure 12 demonstrates an example of a terminal in-game ad in Guitar Hero III. Pontiac is highlighted in the background
of the stage during the final seconds of the song. A strong Pontiac logo is one of the final images seen by the player and thus more likely to be
remembered past the short term.
Figure 12: Recency Effect, Guitar Hero III. The Pontiac logo is prominently
displayed at the end of the song.
Insight 2: Highly Visible Placement Compensates for Low Brand Knowledge

In-game advertisements with the most prominent visual placements were remembered more frequently than less prominently placed ads by those
with limited knowledge about the sport depicted in the game. High knowledge about a sport entails knowledge about the brands and sponsors
associated with that sport. This brand knowledge barrier can be overcome by increasing the visual prominence of the advertisement.
As an example from this study, most participants reported little to no knowledge about car racing. However, racing brands were among the most
remembered by all participants. The brands that were most often remembered benefited from particularly strong placement as large, central
banners (which were often in terminal locations) or as smaller ads affixed to objects that were constantly in view, such as the racecar itself. Not
surprisingly, the visually prominent locations accounted for the most eye gazes and views from the eye tracking data. Visually prominent ads are
seen and remembered, even in fast paced game play.
Figure 13 and Figure 14 offer two examples from the study that demonstrate successful, visually prominent ad placement. A large, clear Potenza
banner is seen in Figure 13 at the start/finish line of the racetrack. Players start the race under this banner, pass through it on every lap and end
their course under the banner. Potenza was one of the most remembered brands presumably because of its unique position as both a terminal
and frequent advertisement. Figure 14 displays a Subaru logo on the back of a blue Subaru racecar. Even though the advertisement is relatively
small as a percentage of the overall display, it is easily remembered due to its fixed position on the players primary object of focus. As evidenced
by the eye tracking footage, the Subaru ad was the most viewed ad of any in the study due to its fortunate placement.
Insight 3: Brand Knowledge Compensates for Low Ad Visibility

As an inverse to Insight 2, knowledge about a brand increases recognition and recall when the advertisement is placed in a location with limited
visibility. Ads with limited visibility were more readily remembered in games which depicted sports most familiar to the participants. Even though
eye tracking footage shows fewer eye gazes for ads with limited visibility, the brand recognition was as high as visually prominent ads
for participants with high knowledge about the sport.
Figure 15 and 16 highlight two examples from the study where advertisements with limited visibility were remembered by participants with high
knowledge and exposure to the sport. In Figure 15, a Honda ad is displayed on the left side of the screen; however, the iconic Honda logotype
is mostly obscured by other in-game objects. Figure 16 shows two soda machines on the right hand side that feature the Sprite logo. In both
cases, participants familiar with tennis or basketball successfully identified the brands even though the advertisements were small, peripheral,
and even obscured.
Figure 13: Prominent Ad Placement, Project Gotham Racing 4. The Potenza

logotype is prominently displayed in the center of the screen.
Figure 14: Prominent Ad Placement, Sega Rally. The Subaru logotype is fixed
to the back of the players car and is always on screen.
Figure 15: Limited Ad Visibility, VirtuaTennis. The Honda logotype, while pushed to the side, was noticed by participants who rated the
highest on knowledge about tennis. Honda is a regular sponsor of tennis events.
Insights 2 and 3 together lead to the conclusion that, like most advertising, it is important to understand the existing relationship between the
brand and the consumer. Advertising a brand unknown to the games audience will require more prominent placement in order to be effective and
vice versa. The extent to which game players do or do not exclusively play games that represent their real world interests is largely unknown, so,
as an example, it is up to advertisers to determine whether or not consumers playing the latest football video game are also real-life football fans
familiar with brands commonly associated with football.
Figure 16: Limited Ad Visibility, NBA Street. Sprite logos in the edges of the screen were consistently remembered by participants who rated
the highest on knowledge about basketball. Sprite is a regular sponsor of NBA events and games.
Insight 4: Engagement and Brand Recognition Are Positively Linked

This study discovered a developing association between a players heightened physiological engagement and the ability to correctly identify
brands from their exposure to in-game advertising. Inversely, negative or limited engagement with a game had an adverse impact on player
ability to remember brands. Figure 17 shows a developing trend between an increase in physiological engagement (evidenced through the QPI
measurement) and brand recognition. In this study, 42% of brands remembered came from more engaging (QPI > 1) games, whereas only 30%
of brands remembered came from games with average engagement levels (QPI < 1).
As with the recency effect detailed in Insight 1, peak-end memory theory supports the early association between engagement and brand recall. Peak
experiences are likely to be the most engaging and therefore have the strongest and most accurate residence in memory, making brands associated
with those moments more likely to be successfully recognized and recalled. Unfortunately, identifying engaging moments within games in which
to place advertising is a difficult matter. The exact qualities of what makes a given game experience engaging to one person instead of another are
unknown. Only thorough, primary research into player engagement with anticipated game titles may help in the media buying process, when the
goal is to build brand associations through peak experiences.
% Brands From

Engaging
Games
Average
42%
Avg. QPI
Engaging Games
% Brands From
Avg. QPI
Base Games
Base Games
1.08
30.15%
0.87
Figure 17: QPI, Engagement and Brand Recognition. More brands were remembered
from each participants most physiologically engaging games.
10
Insight 5: Context-Appropriate Ads Build Positive Brand Associations

Context-appropriate advertisements, which constitute the majority of those in our game play clips, were universally rated as a positive aspect
for each game in our study. Advertisements which support and extend the game world and provide more opportunities to create connections
between the game and reality positively impact the gaming experience, thereby facilitating positive brand associations with game players.
All study participants encouraged the use of context appropriate ads as a means for increasing the realism of the game world. As one player
stated, It wouldnt be sports without ads.
However, advertisers participate in the fine line of balancing game play and fun with realism. As more real world ads enter game worlds, the
perceived realism of the world potentially increases. As realism increases, pressure is placed on gameplay rules and mechanics also to behave
more realistically. If players perceive too great a disconnection between the realism of the depicted environment and the gameplay rules and
constraints, the game becomes absurd. For example, in the study, the two participants most knowledgeable about racing stated that the city
streets in Project Gotham Racing 4 (Figure 18), carefully recreated based on New York City complete with a variety of real world brands, were too
real, in the sense that they disrupted the games fantasy that one would actually be able to race on New York streets. It would be more plausible
to race through a citys streets if they are distanced enough from real life in some way, such as stylization, abstraction, etc. Advertising is not, of
course, solely responsible for the negative impact of realism experienced by the participants, but advertisers should be aware of the potential for
their advertisements to change the game experience in a variety of ways, not all of them beneficial or obvious.
Figure 18: Fine Line of Context In/Appropriate Advertising, Project Gotham Racing 4. Several participants commented that the
almost excessive amounts of real world branding inside the racing game made the tracks feel unreal because its not possible
to race on real streets like the game depicts.
11
Conclusions
The findings of this report suggest that in-game advertising can be highly effective, even among players who profess little to no pre-existing
knowledge about brands they see in-game. Visual placement and frequency are critical in reinforcing brand recognition. Identifying strategic
visual locations for ads, rather than slapping them onto any visible surface in-game, is paramount for achieving success with in-game ad
campaigns. However, a balance must be maintained between utilizing the best visual locations for advertising and not breaching the barrier
of player-perceived context appropriateness.
The expectations for in-game advertising are high, but the ability to meet and measure those expectations is challenged by the very nature of video
games. Video games, more so than any previous media, are highly immersive, interactive, and visually dynamic media, and accordingly their
cognitive and physiological demands make the evaluation of in-game advertising unusually difficult. Metrics based on impressions and screen time
may no longer be relevant or helpful when distributing advertising in the latest generation of highly immersive digital games. Instead, as this report
demonstrates, in-game advertising may be better measured in terms of player engagement and context appropriateness. Positive links between
user engagement and brand association are constantly developing; this report provides early evidence that positive physiological engagement
leads to increased brand recognition.
Overall, the chief finding in this report may be the affirmation of the importance of conducting primary research to quantify player engagement
with appropriate game titles in order to facilitate the media buying selection process and ensure both higher brand recognition as well as improved
acceptance of in-game advertising among players.
References
Anderson, N. (2006). Following the money: how Subway ads ended up in Counter-Strike. Retrieved August 3, 2008 from
http://arstechnica.com/news.ars/post/20060116-5985.html.
Entertainment Software Association. (2008). Essential Facts about the Computer and Video Game Industry. Retrieved August 3, 2008 from
http://www.theesa.com/facts/gameplayer.asp.
Kahneman, D. (1999). Objective Happiness. In D. Kahneman, E. Diener, & N. Schwarz, Well-Being:
The Foundations of Hedonic Psychology (pp. 3-25). New York: Russel Sage.
PriceWaterhouseCoopers. (2007). Global Entertainment and Media Outlook: 2007-2011.
Yankee Group. (2007). Advertising and Games: 2007 In-Game Advertising Forecast.
12
13
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Player Engagement and In-Game Advertising

Jeffrey Bardzell, Ph.D., Shaowen Bardzell, Ph.D., and Tyler Pace