In a new report from Bidstack, the leading gaming monetization and advertising platform, the London-based company explains how the impact of the pandemic led to a breakthrough year for in-game advertising in 2020. While national lockdowns disrupted out-of-home, sport sponsorship and in-venue advertising, video game consumption soared, and brands chased eyeballs into the virtual world.

As global agencies and Fortune 500 companies jumped headfirst into the fast-growing and immersive medium that now counts 2.7 billion loyal participants in its growing audience, in-game advertising technology enabled programmatic buying, third-party ad verification and enhanced security. Combined, these breakthroughs unlocked a powerful, global market that is growing and innovating rapidly.

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“The pace of innovation in gaming and in-game advertising is moving at astonishing speed. Brands that partner with the leading innovators in the space are finding wide-open opportunity and powerful tools that unlock scale while guaranteeing safety andefficacy.”

Here is a look back at the year in-game advertising emerged as a mainstream advertising channel:

Maturation

Nothing proves a new advertising model’s arrival more convincingly than the world’s largest agencies and brands piling into the medium. Major advertisers grew increasingly confident in gaming as a new channel in 2020, as safety, verification and standardization of in-game ads pushed the industry further than ever before.

• In 2020, some of the world’s largest agency holding groups established gaming divisions or products, including Omnicom, Dentsu, GroupM and Publicis.
• The global advertising agencies’ interest in the gaming audience was a direct response to increasing Fortune 500 spend on in-game ads. Some of the world’s largest brands already pursuing in-game advertising strategies include Coca-Cola, Samsung, McDonald’s, Vodafone and Volkswagen.
• The IAB made significant progress in making in-game advertising a fully recognized and on-plan advertising category.
• Moat by Oracle, ComScore, Nielsen and other independent media measurement vendors provided a level of brand safety and viewability, proving in-game advertising’s effectiveness through third-party verification.
• Advertisers pushed for Demand-Side Platform (DSP) integrations with game monetization technologies to allow for campaign budgets to be planned locally and via programmatic channels.

“While we are in the early stages of realizing the immense market opportunity of in-game advertising, the technology and industry standards reached a tipping point in 2020. Programmatic in-game ads can now be delivered safely and securely to millions of gamers with industry-leading targeting, tracking and quality. This sets the stage for the rapid growth of in-game advertising as a mainstream advertising channel with unique, immersive advantages not seen in other advertising channels,” said James Draper, CEO of Bidstack.

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Increasing Scale

The gaming audience is an enormous and largely untapped opportunity. But even as technology unlocks this advertising audience, the medium continues to grow and evolve. The pandemic caused an astounding surge in gaming, with Newzoo reporting that Verizon registered a 75% increase in gaming traffic during the pandemic, Comcast reported a 50% increase in game downloads and Twitch reported a 195% surge in first-time game viewers during lockdown.

Now, that audience can be reached programmatically, with technology that powers precise, targeted ad placements at scale while generating new revenue models for game developers. In 2020 the industry saw the emergence of trends that will spur long-term growth in gaming and in-game advertising.

• Mobile represents nearly 50% of the global gaming revenues and is the fastest-growing gaming device. Mediation platforms and ad networks have provided mobile game developers tools to monetize their titles and grow their Daily Active Users through offering free-to-play models. With over 5.2 billion smartphone users globally, mobile gaming will continue to grow exponentially, a trend that will be reinforced by the roll-out of 5G networks. This bodes well for in-game advertising.
• The emergence of free-to-play and games-as-a-service monetization models for publishers marks a shift in revenue generation from title prices to subscription models, advertising, in-game purchases and micro transactions. The transition is reflective of favorable industry factors such as cloud gaming, demand for more content and competition for reach.
• In 2020, the popularity of live streaming platforms was represented by the 27.89 billion hours of gaming content that was consumed across Twitch, YouTube and Facebook which is up 79% year-on-year.