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BizReport : Advertising archives : March 19, 2007

Google purchases in-game advertising firm

After a couple of rumor-filled months it is finally official. Google has purchased the in-game advertising firm, Adscape Media. The acquisition will enable Google to reduce its reliance on online search advertising, which currently accounts for the majority of its revenue.

by Helen Leggatt

Apart from their own potential revenue gains, Google’s foray in to the world of in-game advertising stands to benefit advertisers, game developers and players alike. Revenues from ad sales can be ploughed back in to advancing the gaming experience for users and advertisers have access to highly targeted audiences.

Research firm Yankee Group has predicted the in-game advertising market would grow to five times its current value, or $732 million, by 2010.

While Adscape Media provides sophisticated demographic and geographic targeting to marketers, as well as a robust reporting interface, will the very audience they seek welcome this increasing intrusion? It seems gamers aren’t too adverse to in-game ads if they are relevant to the environment, according to recent research, yet Ars Technica’s games editor, Ben Kuchera, is sceptical, "I have yet to talk to a gamer who says, 'Man, these ads really make me feel good about having things sold to me after I've bought a $60 game!'"

As audiences migrate from watching television to surfing the web or playing video games it is logical that advertisers will want to seek them out, and Google isn’t the only giant to snap up an in-game ad company. Microsoft purchased Massive Inc. last May, paying around $200 million, around times what Google is rumored to have paid for Adscape.

A recent announcement on Google’s site, written by Adscape’s Bernie Stolar (posting under the title "Dean of Games) said, "Our charge at Adscape has always been to honor the game that was developed and find new ways to enable that game to continue so others can enjoy it. That's why we are so stoked to join Google—because these guys get it, and are committed to helping us continue our mission."

Tags: Adscape Media, Google, in-game advertising, Massive Inc., Microsoft, video game

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