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Gaming Advertising Upside in Digital Homes

Game advertising spending in the U.S. will grow from $370 million in 2006 to more than $2 billion in 2012, according to a new report entitled "Electronic Gaming in the Digital Home: Game Advertising," from Parks Associates.

Over that time, game advertising will achieve a compound annual growth rate (CAGR) of 33 percent, much higher than that of other major advertising media, including TV, radio, print, and the Internet.

"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.

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

In-game advertising will experience the highest growth rate among the various categories of game advertising methods forecasted, 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 percent of the in-game advertising market in 2006 to 84 percent in 2012.

"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."

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