This piece was originally published in Forbes.
There are 3.38 billion gamers worldwide, nearly identical to the estimated number of people who watch digital video, drawing interest from marketers across industries. Despite this vast audience, ad spend for gaming is only projected to reach $8.5 billion this year. Compare that to the projected $28 billion for connected television (CTV), for example, and it seems quite low. The Interactive Advertising Bureau (IAB) estimates spend will increase to $11.5 billion by 2027, but that growth is not as rapid as one might expect given gaming’s extensive reach.
Gaming is not a new pastime; mainstream popularity dates back to the 1970s and 80s, when arcades served as a homebase for fans of Pong and Pac-Man. Advances in technology, the emergence of beloved franchises, and partnerships with brands like FIFA–which holds the record for top-selling sports series game–have propelled the industry to an estimated $406 billion-dollar market. Today, gaming is also known for its passionate and loyal community, a trait any brand can envy.
The opportunity for marketers is clear, but there are obstacles in the way. Those within the industry are actively working to overcome them.
Gaming Has A Branding Problem
In popular culture, gaming has often been relegated to the hobby of teenage boys playing on a PlayStation or Xbox. Several things about this long-held stereotype are flawed. To start, nearly half of all gamers are women. Second, gaming extends far beyond consoles.
Ninety percent of Americans own a smartphone, eliminating the need to spend hundreds of dollars on a console to engage in play. With generally easier access, it’s no surprise that mobile gaming, with 2.8 billion players worldwide, outranks the number of console players while also earning impressive revenue. The popular mobile-based Candy Crush Saga, for example, has generated $20 billion dollars in revenue and draws over 200 million players per month. When Prada Beauty launched a mini-game within the app, they saw a bump in sales and 1,813% increase in website traffic.
The age range of mobile players is also quite different from conventional perceptions of gamers. Research from Statista shows that people aged 40-49 spent the most time daily on mobile gaming apps, followed by 30-39 year-olds and those over 50. While gaming is an excellent tool to reach Gen Z–87% of which play video games at least weekly–they are not the only audience that can be found in the gaming space. Casual gamers, which includes the millions of people who play Wordle each day, are often overlooked.
Media buyers and marketers must stop viewing gaming solely through the lens of consoles. Doing so will open expanded and distinct opportunities to reach varied and unique audiences.
Measurement Is Still Complicated
Traditional media metrics, such as impressions, were not designed for the gaming industry. In games like Call of Duty or Minecraft, players can spend hours immersed in the experience, which is quite different from someone scrolling content on social media. This can cause confusion for some media buyers, who try to compare to the metrics they measure against for television or other digital buys–particularly in an age when CMOs are pressured to prove the value of their spend.
Although educating media buyers can help, further complicating the issue is the fact that the gaming industry itself does not have a unified language when it comes to measurement.
In 2022, the IAB responded to the growing need to close the gulf between interested media buyers and those too skeptical of the ROI by developing new in-game advertising measurement standards. It was “a long-overdue moment,” as Zoë Soon, VP of the IAB’s Experience Center told Digiday at the time. Though a step in the right direction, this has not solved the issue entirely.
In 2023, Activision Blizzard also tried to help the issue, creating the Attention Measurement Scorecard for any brand advertising within its titles. While not an industry-wide solution, it was a clear attempt to demystify measurement output and increase overall brand confidence in the value of in-game spend.
Nearly a quarter of U.S. media buyers, according to research from Admix, say they aren’t spending on in-game advertising specifically due to resistance from clients. Meanwhile, IAB research found that 90% of those who do buy in the space find gaming ads to be effective in reaching “valuable, hard-to-reach audiences with relevant messaging.”
Speaking on a panel during the Cannes Lions Festival of Creativity, Claire Nance, Head of Global Industry Marketing and Communications at Activision, noted that at least part of the burden is on those in the industry to simplify what can be overwhelming for marketers.
“One of the barriers for brands to enter into gaming is that it’s quite a complex ecosystem,” she said. “Honestly, that’s quite intimidating for folks, because they don’t want to get it wrong–especially if they haven’t been active in gaming before.”
Despite the obstacles, there have been significant achievements for brands who spend in gaming, from increased brand awareness to upticks in sales. As gamers continue to embrace smart advertising in and around their community, the opportunities for brands are only set to expand. Gaming experts and strategists are ready to advise on how to best engage in this space, but first, they must get media buyers and marketers aligned on what gaming encompasses and confident in its value.
