Seldom has a new media market received as much immediate attention as has the market for in-game advertising – and for good reason. Anyone tracking media consumption understands full well that interactive gaming in its many forms is taking away time from all existing media, from TV through to Web, inexorably, indubitably, and unstoppably.

Clouding the early days of this market were the hype players, more committed to building a story than building a market. To them, I say, good job financially, and shame on you for not doing the spade work required to really build to a good harvest.

The great news is – for those of us that are committed to building out this new medium, on behalf of gamers, advertisers, and game companies alike, we're moving into Phase 2 of the evolution of in-game advertising, and the prospects are bright indeed for those of us with leadership positions in the space. Let's have a look at three things – why in-game advertising is a critically important and vital force for the industry, how it is evolving from its early roots, and what you, as a member of the publishing community, can do to help.

Why is in-game advertising important to the industry?
The easy answer is the monetary one – that in-game advertising allows game companies of all sorts to add additional, high net profit dollars, to the bottom line. This is not a new fact, although the amounts of money being generated for gaming companies continues to increase whether you look at a per-user or a per-box metric.

The much more important benefit of in-game advertising is that, along with its twin sister of digital item sales, we're creating an entirely new opportunity to build the gaming audience. Consoles and DVD-based products provide hugely valuable and entertaining experiences, but there are only so many that are willing to invest in hardware devices (or configure their PC for gaming) and pay $40-$60 for that entertainment experience (as valuable as it may be for those of us that love that sort of game.) As the rise of casual gaming in the Western world, and advanced online gaming and casual MMOs in the Western and Eastern worlds clearly shows, there's a much larger audience out there that will play free games than will play retail-based games. In-game advertising provides the engine for this audience growth, by enabling the means of discovery for wholly new audiences, which benefits all participants in the gaming industry alike. More people into the gaming experience benefits all gaming models, whether retail, subscription, or ad- and item-based.

As important, advertising brings new value to gamers, which in turn benefits industry participants. Advertising does bring realism to many games, although many in the in-game industry are guilty of making this a hackneyed phrase, and it applies some of the time but certainly not all of the time.

More to the point, advertising enables not just free games and new audiences, as noted above, but additional depth of gameplay for retail gamers. Sponsored maps, vehicles, accessories, tournaments, and so on all make for a richer, deeper gaming experience, which in turn brings more of the gamer's time share and media investment to the gaming industry. Providing value for free is one of the most potent forms of sponsorship that exists, which is why we see advertisers again and again embracing the opportunities in downloadable content sponsorships across all platforms.

New users and happier users make for happier game company shareholders, and in-game advertising is driving towards all of these goals.

How the market view is evolving
Much has shifted in our collective understanding of the in-game advertising industry, as we've worked with scores of games of all types and game publishers have had experience with the older and newer forms of in-game advertising. Here are a few of our findings:

We are learning how to place the ads in ways that work for gamers, gaming auteurs, and advertisers alike: Proper ad placement is at the essence of our industry – it must work for all stakeholders. Context remains an inviolable concept for those of us in the in-game business – racing, sports, and urban setting games remain the most viable of the retail games, for placing billboards, videos, and other in-game units. How and where to place those ads in those games is now much better understood, so we can deploy fewer ad placements more efficiently in a way that works for all stakeholders.

Integrated placements are alive and well, and complement, vs. detract from, dynamic ads: It is now well recognized that the growth in advertising inside of games will rise across all forms of in-game ads, including integrated (static) placements, which were thought to be in competition with dynamic ads. The truth is anything but. While static signage has largely been obviated by dynamic advertising, the rich depth of experience that can be provided beyond signage, for those brands that want an evergreen not reliant on connectivity, is huge. And, it drives the growth of dynamic advertising. For this reason, Double Fusion has been focused on becoming the established independent leader in selling sponsorships and integrations in games as well as dynamic advertising, and every integrated advertising partnership we create also includes a dynamic advertising element, allowing the benefits of each type of advertising to be made manifest.