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Personalization to Drive In-Game Advertising

The ability to dynamically serve advertising into video games that are connected to the Internet will create a growing opportunity, according to the latest ABI Research market assessment.

As gamers connect consoles to the Internet for online gaming and commerce, publishers and their respective console partners increasingly will look to reach them through advertising -- resulting in a market that will grow from $80 million in 2007 to $852 million by 2011.

"In many ways, console vendors and game publishers view gaming services as an ever-more attractive channel to reach an active demographic," says research director Michael Wolf.

"In the past, static advertising meant that publishers and their ad partners could not create real-time marketing messages. With the incorporation of ad clients directly into game engines -- and through connections to ad servers -- advertisers will be able to deliver advertising that reaches audiences in-game and through the walled garden game network."

ABI believes in-game advertising is just one of the new revenue streams that will come to fruition from the conversion of console gaming into connected gaming. Online downloading of entertainment content such as movies and TV shows will grow, as Sony and Microsoft nurture their respective video offerings.

All three major console vendors will experience strong growth in casual game download revenues. ABI forecasts the casual and classic game download market for gaming consoles to grow tenfold -- from $93 million in 2007 to $1.1 billion by 2011.

"At present, all three game console vendors are investing heavily in online gaming and commerce infrastructure," says Wolf. "While these investments are not profitable today, we expect mounting acceptance of the online channel as one of the primary mediums to get new content on the console, causing online gaming to become a significant contributor to revenues for all three vendors within 3 to 4 years."

I believe that the full potential of the gaming console as an effective advertising medium will be reached when the unique attributes of the platform are used for consumer experience personalization. Meaning, ads will be viewed as being less invasive if they are targeted at the known user lifestyle and interests.

This approach to "lifestyle/interest mapping" can be achieved by capturing user persona profile data, and then applying interactive attributes -- enabled by an online connection -- to present highly relevant offers from selected advertisers or sponsors.

I believe that Persona-lized Ad Server (my generic term) technology will transform advertising presentation that will directly benefit both marketers and consumers. It's a true win-win scenario. Of course, all the constituents within the value-chain will ultimately benefit from this improved business model.

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