Business in Virtual Worlds, Deep Thoughts, Second Life

Guardian Weighs in on VW vs. In-Game Ad Revenues

While it might be old news that advertisements and big-brand shops in Second Life were a failure (now called “an experiment”), the Guardian UK recently weighed in on the development by comparing virtual worlds “going off the radar” to video games being “where it’s at.”

Global in-game ad revenues are difficult to target for this year, but in 2006 totalled 42 million (in pounds) and is expected to rise to 526 million (in pounds) by 2011 according to the Yankee Group, and this could even be an understatement.

Product placement, of course, is a natural fit for games with a significant automobile presence, or athletic games where the product tie-ins are automatic. But as consoles like the Xbox 360 become Web-enabled, the market for in-game advertisements multiplies and diversifies.

“Dynamic in-game advertising exploits the power of web 2.0,” said Guy Phillipson, chief executive of the Internet Advertising Bureau to the Guardian. “Enabling marketers to place their brands in front of gamers in real time; they can also update them, track them, and measure their effectiveness.”

But Phillipson also added, “respect for the audience is key - interrupt the gaming experience at your peril.”

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