It's no secret that the television networks are losing young men (ages 18-34) as they spend more time online and playing games. This is one of the reasons in-game advertising is so attractive to brands trying to reach this elusive demographic. It's also one of the reasons Yankee Group estimates that the in-game advertising market will grow to $732 million by 2010.

In-game advertising offers an engaged, active audience. Additionally, for many games, such as racing and sports, advertising enhances the reality of the virtual world. Consumers expect advertising in these ecosystems because it mirrors real-world environments. As long as the advertising is relevant and natural, it seems to be welcomed by audiences and even seems to perform better than other ad forms. A recent study by Forrester found that recall rates for in-game ads ranged from 30-40 percent compared to an average of 10 percent for television advertising.

There is a wide range of creative inserted into gaming environments, including billboards, posters, video, audio and sometimes even avatars or characters. However, in the past, most of those product placements had to be hard-coded into the game itself and couldn't be changed. The in-game ad networks not only offer advertising opportunities across multiple games, but they also offer insertion technology that allows marketers to serve their ads dynamically and in real-time.

Examples include:
Adscape (acquired by Google)
Double Fusion
Engage
Greystripe
IGA Worldwide
Massive Inc. (acquired by Microsoft)