Inside gaming’s push to level the playing field in advertising

Video games are far more than boss fights and button-mashing. They’re a multibillion-dollar industry: Consumer spending on games surpassed $50 billion in the U.S. last year, up 2% from 2023.

According to the Entertainment Software Association, 61% of Americans play games at least one hour each week.

Yet, gaming accounts for just 5% of total digital ad spend, according to Zoe Soon, VP of experience at IAB, speaking at Tuesday’s IAB PlayFronts in New York. But that’s starting to change.

Now in its fourth year, the annual conference highlighted the vast opportunity for advertisers in gaming: Innovations in programmatic advertising and a push for industry-wide standardization are working to, as Soon puts it, “chip away at the roadblocks” that have impeded gaming for so long.

“Consumers are already there with gaming,” Soon tells The Current. “It’s up to us to make it easy for advertisers to reach them, whether it’s by shifting mindsets or making measurement easier and comparable [to other channels]. And I think we’re getting there.”

Measurement upgrades

IAB announced major updates to its measurement standards for in-game advertisements in 2022 when it hosted the first PlayFronts.

This year, the organization is developing standards for the benchmark minimums a brand can expect for gaming ads, says Soon.

“Getting some agreement across the industry on that will really be foundational,” she says. “Education is important. We need to make sure that [the standards are] explicit and transparent for brands.”

Historically, in-game advertising has been a mobile-based phenomenon. But growing consumer interest, wider programmatic adoption and clearer measurement guidelines are changing the game, no pun intended.

“Advertisers often hesitate to leverage gaming as an ad channel due to outdated perceptions about audience, brand safety and measurement,” says Kevin Beatty, head of global gaming, interactive experiences and emerging tech at Samsung Electronics. “But gaming is becoming more accessible than ever, thanks to innovations like cloud gaming and smart TV game hubs that eliminate the need for expensive hardware.”

Samsung is taking advantage of its own smart TV hub; at PlayFronts, Beatty announced GameBreaks, interactive games that appear in the first ad slot during commercial breaks on Samsung TV Plus.

Itamar Benedy, CEO of Anzu — which offers an in-game advertising platform — has seen the shift firsthand. His company’s partnership with The Trade Desk has helped brands show a return on investment and sales lift, including for a major retailer that ran ads in a well-known sports video game.

“Gaming has had a lot of attention over the years [from advertisers]. There’s a lot of [consumer] time spent and a lot of scale,” Benedy tells The Current. “But the measurement, the ability to show that sales lift, was the piece that was missing to make it go mainstream. All the capabilities are there now.”

Soon added that more brands are interested in programmatic solutions for gaming — and more publishers are open to it, as was apparent at PlayFronts.

Roblox, for instance, announced brands will soon be able to programmatically buy rewarded video ads. It also announced partnerships with Nielsen, DoubleVerify and other measurement platforms.

“We want to make it easy to buy but also easy to measure,” Ashley McCollum, head of immersive media solutions at Roblox, said onstage at PlayFronts.

Shopping via gaming

In a sign of how it’s maturing as an ad channel, gaming is starting to intersect with e-commerce.

Earlier this year, for example, Wavemaker launched new tech in partnership with Anzu, featuring nonintrusive shoppable ads.

“This innovative solution bridges the gap between gaming ads and e-commerce, enabling brands to reengage gamers outside the game to drive purchases,” the agency said in its announcement.

“For example, a player enjoying The Sims Mobile might encounter a nonintrusive ad for mascara within the game. Later, while browsing online, that same player could be served a clickable ad featuring The Sims-themed iconography and directed to a retailer like Amazon to make a purchase.”

The lines could continue to blur if advertisers catch on to the opportunity in front of them. According to Zynga research, mobile gamers are digital-first shoppers and they tend to spend more than non-gamers.

“Mobile gaming and mobile commerce go hand –in hand,” Marian Thomas, director of partnerships, research and measurement at Zynga, said during the event.

Gaming is more than ready for advertisers — it’s inviting them to press start.

“As gaming ads scale, expect advancements in AI-driven optimization, cross-device tracking and standardized industry benchmarks,” Samsung’s Beatty says, “making gaming a powerful, measurable channel for advertisers.”

The Current is owned and operated by The Trade Desk, Inc. This information is provided solely for background and is not a representation or guarantee of any future performance.