Game Ad Spend to Exceed $2 Billion in 2012

Game Ad Spend to Exceed $2 Billion in 2012

Game advertising spending in the US will grow from $370 million in 2006 to nearly $2.1 billion in 2012, according to a Parks Associates forecast, with ad spend increasing at a compound annual growth rate (CAGR) of 33% during that period.

“Advertising in electronic games had an average monthly household expenditure of less than 50 cents in 2006, while broadcast TV was at $37, meaning advertisers are not using the gaming medium to its full potential,” said Yuanzhe (Michael) Cai, director of broadband and gaming at Parks Associates, and author of the “Electronic Gaming in the Digital Home: Game Advertising” report.

“If executed correctly, game advertising can provide a win-win solution for advertisers, developers and publishers, console manufacturers, game portals, and gamers.”

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In-game advertising will undergo the highest growth rate among the various categories of game advertising forecast in the report, increasing from $55 million in 2006 to more than $800 million in 2012.

Specifically, dynamic in-game advertising (DIGA) in PC, console, mobile and casual games will grow from 27% of the in-game advertising market in 2006 to account for 84% in 2012, according to Parks.

“DIGA offers several unique advantages, such as timeliness, scalability, measurability, and flexibility,” Cai said. “But the industry will also have to address several looming challenges, including lack of economy, lack of industry standards, and media fragmentation.”

About the Parks Associates study: The report includes analysis and forecasts for different game advertising models, provides profiles of 26 key players in the game advertising industry and offers wide-ranging consumer perspectives.