There may not be an industry standard for measuring in-game advertising in China just yet, but we are already able to tell what certainly does NOT work.
The need for standards
Even though the in-game advertising sector is still in its early stages, a reliable standard of measuring its effectiveness has already been heatedly discussed and avidly requested among industry practitioners. Actually, this was one of the major topics that was covered during the advergaming session of ad:tech Shanghai in November, 2008. Without standard metrics that effectively measure in-game advertising, this sector can't expect to grow in a significant and stable fashion.
The formation of any industry standard is a result of wars among all relevant stakeholders and a natural evolution which ultimately retains the fittest over time. There will not be such a standard for in-game advertising in China in the near future as the constituents of in-game advertising (mainly for online games) have only recently finished finding their own places in the value chain. However, we are already able to tell, with a high level of accuracy and confidence, what factors or methodologies certainly do NOT work for measuring in-game advertising, for example, most notably, the metrics measuring internet advertising.
Website metrics do NOT apply
Despite the huge challenges from search-based technologies and new internet applications, such as AJAX and widgets, the methodology of employing page views (PV) and total unique website visitor IPs (then the CPM model) to measure the advertising value of a website is still by far the standard that advertisers rely on to invest on websites for display ads.
Even though in-game advertising, with the games being large-scale online games or online advergaming, is very similar to internet advertising in the sense that it is by all means a digital marketing practice and therefore shares common characteristics -- being measurable, direct to targeted audiences and cost-efficient -- in-game advertising is by nature different from display ads on the internet. It thrives on two distinctive values: extremely long ad exposure per user head count and the ultimate level of interaction.
The first key factor -- long ad exposure
Take MMORPGs (Massive Multiplayer Online Role Playing Games) in China. The ACU (Average Concurrent User) figure of a popular MMORPG game in China is easily over 200,000 people, meaning that there are, on average, at least 200,000 people playing together within the game and exploring the virtual world simultaneously at any given time, 24/7. We need to interpret the significance behind this number appropriately to appreciate the potential of advertising within games.
Imagine the virtual world as a swimming pool with water coming in and going out simultaneously. If we need to keep at least 200,000 units of water in the pool at any time, then what is the minimum number of units of water needed to go through the swimming pool constantly? It obviously depends on how long it will take a unit of water to go in from one side of the swimming pool to the other side out. The shorter the time, the more units of water are needed. The number of units of water in the pool is the equivalent of the ACU for a game, and the time that a unit of water goes from one side to the other on average is the equivalent of how long a gamer spends within an online game at a time. All third-party independent surveys on MMORPG gamers in China indicate that the average time gamers spend at a time is at least 3 hours.
In comparison, the longest time that a web surfer spends on a website at a time is arguably no longer than half an hour. There has to be a new and effective way to measure the value of in-game advertising given its incredibly long potential exposure time.
The second key factor -- interaction
Not only is the in-game advertising exposure long, it also has the potential to achieve the best engagement between audiences and advertising as well. Games by nature are interactive. Stand-alone PC games require the gamer to interact with the game constantly during game play, while online games require the gamer to interact not only with the game itself, i.e. the computer, but also with other gamers, i.e. the community, in the virtual world. According to Interactive Bozell Worldwide, research suggests that people remember 20 percent of what they see, 40 percent of what they see and hear, and 75 percent of what they see, hear and do.
A well-designed in-game advertising campaign will offer a chance for gamers to not only see and hear the advertised product or service, but also experience it via using it as a virtual item, or appreciate its value via talking to a NPC (Non-Playing Character), or even dream about it via some ingeniously-designed or manipulated storyline of an existing game, or simply live it as a customized virtual world dedicated to enhancing interaction between the brand and its targeted audience.
The standard metrics for advertising on websites fails to measure both the long ad exposure potential and the engagement via interactions of in-game advertising. Following this, we shall discuss some successful attempts to measure the effectiveness of in-game advertising and how the future looks like for the formation of some standards.
Steven Lili Hu is founder and CEO of Shanghai-based InGameAd Interactive.