Imagine: You, as Master Chief, are pinned down by a horde of Covenant forces. Your assault rifle is low on ammo, and you realize you’re out of grenades as a pair of Brutes advances on your position. Desperately, you blaze away but manage only to wound them before your gun runs dry. Your death is swift and violent.

Then, over the image of your motionless, armor-suited corpse, a message pops up: “Restarting at your last checkpoint. This second chance at life is brought to you by Prudential Insurance. Even cybernetic Spartan soldiers need a piece of the rock.”

An unlikely worst-case scenario of advertising in a videogame, sure. But there’s no denying that in-game advertising is enjoying an upsurge, as pitchmen look for new ways to reach ever more fragmented audiences. In the age of PVRs and podcasts, traditional commercials just don’t cut it.

“Alas!” wail these mega-corporations and their advertising agencies. “TV viewership among our most coveted demographic, the 18- to 34-year-old male, is in sharp decline! They don’t read newspapers or listen to radio anymore, and their ’Net surfing habits are fleeting and fickle! If only there was some entertainment medium that still attracted millions of young, hip, cash-flush consumers and held their rapt attention for hours on end every week! Think of what we could do if we could pimp our wares to that kind of eager and engaged audience!”

Then, the light bulb goes on. The cash register ka-chings. And suddenly, videogames have a big ol’ bullseye painted on them. Except it’s green, like so many bills stuffed in your wallet. The question that will directly affect the future of gaming is, What happens to your favorite pastime if advertisers score a direct hit?

"Space Available." Yeah, Tony. We know.

FOLLOW THE MONEY

Advertising in videogames is hardly new. In Electronic Arts’ 1994 FIFA International Soccer, billboards on the sidelines displayed logos for Panasonic and Adidas, marking one of the first times third-party advertisers staked out a presence in a game environment.

Simple stuff, that. But pixelated sideline logos begat realistic roadside billboards in racing games, and branded skateboard gear in the Tony Hawk series has evolved into entire in-game stores centered around a single designer, like the Ben Sherman outlet in Test Drive Unlimited.

In the last couple of years, in-game advertising has become serious business worth serious coin. Industry watchers predict advertising in videogames will rake in nearly $2 billion worldwide annually by the end of 2011, and the evolution of online services like Xbox Live makes it possible for companies to update ads within games on a monthly or weekly basis, like changing an in-game movie poster to reflect a flick that’s hitting theaters that very weekend.

True Crime: NYC really wants you to share its love for Puma.  

Remember when there used to be no commercials before the preview trailers at movies? Five years from now, we could well be asking, “Remember when there used to be no billboard ads and product placement in videogames?” Will we be nostalgic? Bitter? Resigned to the march of progress? Or — can you imagine? — actually thankful that our gaming experiences are being enriched artistically and financially through careful use of in-game marketing?

Not surprisingly, game publishers and companies that specialize in brokering in-game ads, like recent Microsoft acquisition Massive Incorporated, paint a rosy picture of the future in which the gamer is the ultimate winner. “Ads will appear in places where one would expect to see them in real life,” says Alison Lange, marketing director for Massive. “The goal is to enhance realism and to never detract from gameplay. For example, in MLB 2K7, instead of seeing a made-up consumer product name, you’ll see an ad for XM Satellite Radio — brands you might see in the stadium at a [real-world] ballgame.”

SAM & AXE
Ubisoft, in particular, has been especially aggressive in chasing in-game advertising opportunities, from Sam Fisher’s Sony Ericsson cellphones in Splinter Cell Pandora Tomorrow to the can of Axe body spray in Rainbow Six Vegas that triggers the Fremont Street light show and a “blooper reel” Easter egg when shot.

Sam Fisher shills for Axe body spray. Is this a fragrant foul?

Rainbow Six Vegas Producer Alex Parizeau argues that a strong case can be made for ads in certain game genres and settings. He says his team tried concocting fake posters and billboards for some of Vegas’ neon-lit environments, and it just looked wrong. Why not use real ads for real products, have another company worry about futzing with the details, and put some extra cash in the budget, all at the same time? “The costs are increasing with next-gen games, so we need to find alternate ways of reducing development costs while not taking money out of players’ pockets,” Parizeau says.

But Hal Halpin, founder of the non-profit gamer advocacy group Entertainment Consumer Association, says putting ads in games while still charging players premium prices isn’t fair. “The problem is that gamers are paying more for less,” Halpin claims. “Next-gen titles generally retail for $10 more than in the previous generation. And while I appreciate that development costs and cost of living have both increased, asking gamers to [pay more] smacks of opportunism without disclosure.”

Disclosure is the key word, says Halpin, who feels game publishers should be forced to reveal that a game contains advertising upfront, on the box, so that we can decide whether we want to be exposed to marketing messages in our entertainment. “That way consumers make the purchase fully aware of the product’s content.”

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He may be on to something, since Internet forums will often light up at the first whiff of commercial taint in a game, and many gamers find the mere notion of marketing messages being inserted into interactive entertainment distasteful. Do advertisers actually care about the wills and wishes of the gamer? And do they care enough to act on any feedback from the gaming public? “We definitely keep an eye on the forums; we definitely see what gamers are saying about our (ad) placements and what they’re saying about our competitors’ placements,” notes Jeffrey Dickstein, Ubisoft’s strategic sales and partnerships manager. “We are sensitive to this, but at the same time we realize everybody has an opinion. If it’s unanimous or it’s so predominant that we’ve done a bad integration, we definitely need to learn from that.”

THE REAL THING
If in-game advertising is done perfectly, gamers might not even realize that what they’re seeing is an advertisement at all. For example, players storming the casinos in Rainbow Six Vegas to trade fire with terrorists might not have been immediately aware that the cars they were taking cover behind were Dodge vehicles, or known that the vehicles’ presence there stemmed from a deal struck between DaimlerChrysler and Ubisoft. If the vehicles were “inspired by” real models but not actually licensed, suddenly they stick out as fantasy clones. “We can use real cars, or we can create cars of our own,” reasons Vegas producer Parizeau. “But we’re not car designers, so they’re always going to look a little bit off. It’s always a plus when you can use a real product and base the modeling in the game on real stuff.”

"Hold your fire, soldier! That car is fabulous!"

But if gamers don’t make the connection between the in-game vehicles and the Dodge brand, is the advertisement still a success? Game publishers and ad agencies are still experimenting with ways of accurately measuring how in-game ads are seen and absorbed — a prospect much trickier than measuring, say, TV viewership. For instance, how long did the player spend near the ad? Did he look directly at it? Was he viewing it head-on or at an angle? If the ad is in a later level of the game, what percentage of gamers will actually make it that far to see it? With Massive, for example, a gamer has to spend 10 cumulative seconds in reasonably close proximity to an advertisement during one gaming session before the company registers it as an “impression” of that ad. (Maybe the gamer spent those 10 seconds emptying a clip into a billboard, cursing the name of the advertiser and vowing to boycott the product. But hey, they looked at it.)

Because of this, advertisers and developers will often try to integrate products into the actual gameplay in an effort to forge a stronger link with gamers and goods. If using a Nike shoe in a basketball game gives your athlete avatar a stat boost, are you more likely to seek out the same kicks in the real world? If a game’s hero drives a Ford, will you want to drive one?

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Advertisers get supremely stoked about this kind of unprecedented flexibility and interaction with their target audiences — you can’t get that with TV, print or radio, after all — but again, what about those of us who are actually playing the games? Detracting from gameplay seems to be the prime concern among gamers when it comes to advertising invading one of entertainment’s last commercial-free bastions. No one wants an out-of-place poster or product disrupting the immersive illusion of a game world. And it’s safe to say that absolutely no one wants a Lord of the Rings RPG in which Frodo and pals stop at a McDonald’s to load up on Egg McMuffins for the trek to Mordor. Second breakfasts indeed.

Game publishers and marketing firms lay their hands over their hearts and swear that they will never intentionally disrupt a gaming experience with ads. “If done right, ads enhance the reality of the game, and keep [it] up-to-date,” says Jonathan Epstein, CEO of in-game advertising agency Double Fusion. “Our No. 1 goal is to preserve the experience and immersion in the game world.”

Who's to say Lara Croft wouldn't drive a Jeep?

Still, the precedent of game-sullying advertising has certainly been set. And some of us may feel that having advertisers promise to protect gamers’ interests is a little like asking the fox to guard the proverbial henhouse.

ADVERGAMES: THE DIRTY WORD
Then there are advertisers who skip the middleman altogether. Videogames built from the ground up as marketing tools might be the ultimate example of combining brand-pimping with joystick-jiggling, except for one small problem — these so-called advergames usually suck with such vigor that they’re quickly forgotten by the very gamers they seek to sway. Remember Spot Goes to Hollywood on the 16-bit systems? Are you feelin’ 7-Up?

Remember Zool for the Sega Genesis? Then maybe Chupa Chups paid too much.

Then came his royal highness, the Burger King. We may have initially scoffed at the notion of a fast-food outlet developing and selling $3.99 Xbox/Xbox 360 games starring the King, Subservient Chicken, and Brooke Burke, but more than 3.2 million copies of Sneak King, Pocketbike Racer, and Big Bumpin’ were snapped up, along with the requisite value meal. “The BK Xbox promotion helped contribute to a 41% increase in profits over the same time period the previous year,” says Martha Flynn, Burger King’s senior director of national promotions and sponsorships. “We created all three games in less than a year, so timing was our biggest challenge."

All hail the Burger King as he emerges from his throne!

While Burger King bristles at the term “advergame” — “The BK Xbox games extend much further in scope and user experience,” responds Flynn —
there’s no denying that the games did an ace job of pushing the BK brand deeper into the cultural consciousness, not to mention generating a whole
lot of King ka-ching. Though Burger King says they don’t have any plans to do a similar promotion any time soon, could their success mean we’re about to be flooded with a new wave of next-gen advergames? Can an Unreal Engine 3–powered Chester Cheetah Goes to War be far off?

“Marketers who opt to create an advergame get all the creative control and brand exposure they want, but at the risk of designing a dud that no one will want to play,” explains Ilya Vedrashko, a Boston-based emerging-media strategist who wrote his MIT thesis on advertising in computer games. “Burger King had a unique combination of the right demographic and a powerful distribution channel — their restaurants — working for them. Not every business has these advantages.”

It's easy to pick the winner of this fight, even if they are flat on the mat.

WE‘LL BE RIGHT BACK
And maybe that’s for the best. With the average North American city dweller already bombarded by anywhere from 3,000 to 5,000 marketing messages per day, according to advertising-watchdog magazine Adbusters, some argue that incorporating advertising into videogames simply pushes that number to greater mind-polluting heights.

Kalle Lasn, founder and editor-in-chief of Adbusters, fears that videogames could face the same hyper-commercialization that eventually overtook television, movies, the internet, and most other forms of art and media. But unlike product placement in films, which ultimately became accepted and even expected, he thinks our edgier, wiser, post-modern gaming selves might not sit quietly and take it.

“I think we may be reaching an era now where the people who are trying to put these ads into games won’t get away with it as easily as those product-placement people who got away with it in movies,” believes Lasn. “Our society has evolved into a much more wary [one].”

So whether advertisers and gamers find a symbiotic co-existence, or consumers end up drawing a line in the virtual sand to say “Keep your real products out of my imaginary worlds,” it’s going to be an interesting few years. Let the games begin...after a word from our sponsors.