Games, Frontin'
What do the IAB Playfronts and GDC Tell Us About the Future of Game Advertising?
One of the byproducts of working in technology is that I don’t own a nice suit. For almost the entirety of my post-collegiate career it hasn’t really been a requirement to dress like an adult - even my most corporate job was in a statistical research department, which had both pretty low and realistic expectations for our collective sense of style.
In any case, it’s fairly rare that I have to tap into the “dry clean only” portion of my closet, though the now-annual seminal showcase of marketing opportunities within gaming, the IAB Playfronts, is giving me regular occasion. Reflecting on shifts from the inaugural Playfronts in 2022 gives an interesting view on how the intersection of marketing and gaming are evolving. Now just a few weeks out from the Playfronts and a few days from the seminal event for game development more generally, the Game Developers Conference (GDC), we are afforded an interesting cross-section of where these conversations overlap or diverge as it pertains to the future of marketing in gaming.
Why Playfronts? Because the advertising community loves “fronts.” The concept of “upfronts" originates from the days of yore when television was the preeminent mode of media consumption (a power which has long since faded) and the vast majority of ad spots were sold in advance (upfront) of the new season of programming. These were the periods where TV networks showcased their programming to command the highest rates and (hopefully) sell-through most of their inventory, where the Nielsen ratings were the currency of the land (which, incidentally, was where I was working in a statistical research department, sans style). Programmatic, turn-key, instantaneous, auction-based buying of media was not even close to being a reality, so much of the dirty business of media selling was done in a relatively condensed period well before an advertisement aired, which was convenient for freeing up calendars to accommodate three-martini lunches and other artifacts of old Madison Avenue culture.
Ah, but how times have changed (sort of). As digital channels have become a more prominent part of the average consumer’s media diet, various “fronts” such as the “Newfronts” have emerged, where social networks, streaming services, and otherwise have sought to woo advertisers with new product offerings and grandiose promises of cultural relevance, reach, and impact. Despite the proliferation of options for marketers, let us continue to be clear - advertisers still dump the majority of their budgets in linear TV for reasons that usually amount to “that is how we’ve always done it”/”that is how our media mix models are structured”/”my CEO likes to see their ad on television.” The gap between how media is bought and how media is consumed has become increasingly wide with the onset of the digital age; though it has narrowed over the years, advertising dollars and consumer attention remain at odds.
While I wear my biases on my sleeve (and my bibliography), there is conceivably no better illustration of this gap than marketing spend/attention directed towards gaming. It is in recognition of this fact that the IAB launched the “Playfronts” last year, a new “front” dedicated towards opportunities within gaming, esports, and the various gaming platforms that marketers believe to be the “metaverse” (but are definitely still games). Now in its second year, several trends have become apparent that savvy trade reporters at Digiday and AdExchanger have picked up on (with quotes from yours truly, of course) - advertiser attention is still lagging, though this may be due to the tendency of those selling opportunities in gaming to focus on the same high-level talking points about the gaming audience at these showcases. In other words, we’re still spending too much time talking about the “what” and less so about the “how” of marketing within the gaming ecosystem.
I’ve spoken at length about the need to push the conversation in gaming forward beyond basic industry facts (and took the opportunity to do so in an interview with ad-industry mainstay Beet.tv at the Playfronts), even going so far as use my time on the mainstage to plead with my colleagues to eradicate the analogy of “young men in the basement playing video games” (an IAB login is needed to view the session, but you can read a recap on the Activision Blizzard Media blog if you’re so inclined).
But even if some of the messaging was well-worn, the types of opportunities presented in 2023 are a shift from 2022: “Intrinsic” in-game advertising opportunities (typically manifested as programmatically-buyable “billboards” in mobile games) led many of the sessions in 2022, yet were down to only two in 2023 (here too, Alex Lee at Digiday has shared some thoughts as to why). Esports was almost completely absent in 2023, a partial reflection of the ongoing challenges within the industry, with much of the game-viewing opportunities instead focusing on gaming creators.
Perhaps most shocking, aside from a litany of examples within Roblox (which may become more challenging for outside entities as Roblox unveils its advertising strategy), were the negligible mentions of “metaverse” as a focal point for marketing opportunities. Further, applications of blockchain/Web3 technologies were completely absent, whereas both metaverse and Web3 commanded a fair share of the conversation at Playfronts in 2022. While gaming was in the front few cars of the metaverse/Web3 hype-train, enthusiasm for these technologies among marketers is dissipating almost as quickly as it accumulated (at least in the broader conversation of gaming). And yet for all the buzz-laded conversations that have been loaded into the intersection of marketing and gaming, this space hasn’t quite caught fire with the newest shiny object in the broader technology world: AI.
For whatever the Playfronts lacked in AI buzz, GDC made up for it in spades. Utilization of AI within game development is not new (though often in the form of the less sexy-sounding practice of machine learning), but high-profile projects such as ChatGPT, Bard, or otherwise have brought the conversation front-and-center. Web3 seemingly found a bit of a reprieve at GDC relative to Playfronts, though the number of Web3-related sessions were dwarfed by the multitude of AI-focused ones, and were largely populated with various blockchain companies speaking to other blockchain companies rather than established game publishers. The notable exception was when EVE Online developer CCP signaled intent towards building a blockchain-powered game, thereby potentially bringing one of the masters of textbook in-game economies to the Web3 world.
Ultimately, the greatest disparity when comparing the Playfronts and GDC was the very focus of the Playfronts: Few (if any) sessions at GDC were dedicated to advertising, sponsorships, or other mechanisms where marketers and game developers might overlap. While we will inevitably see Roblox-like interest from marketers as creators begin to capitalize on the GDC reveal of Unreal Editor for Fortnite based upon immense levels of flexibility and lucrative revenue splits, the more fundamental components of recurrent or F2P monetization were not in the spotlight. This could be a reflection of the fact that these are indeed “fundamentals” to developers, where potential for innovation is lacking or not quite at the level of something new and exciting like AI.
Common ground for technologists and marketers can always be found in their desire to chase the latest/greatest trends. Between Playfronts and GDC, we seemingly find the technologist firmly aboard the hype-train even as marketer interest has waned (for now). Ironically, one of the more fruitful (if not profitable) applications of machine learning (which, again, my inner statistician is obligated to remind you that ~90% of what we call “AI'' is “ML” and does not represent anything close to “consciousness,” just “math”) is against the type of UX testing or mediation which has become common in developing sophisticated advertising models.
While it is always my preference for game developers to spend their time developing games, partnerships are a two-way street: Marketers will fail to invest meaningfully in games as a medium to the extent that it is a massive pain to do so. The 2023 Playfronts demonstrated a need for those asking brands to integrate into gaming to find new messaging to do so, as many of the basic needs of your average advertiser are not being met (as reflected by research on advertiser misconceptions conducted by the IAB). Advertisers have meanwhile made glacial advancements in diversifying spend and attention across emerging media channels such as gaming. In either case, one of the most fundamental barriers for marketer investments in the gaming ecosystem is that it’s really difficult to integrate into gaming in a way that makes sense for brands and players alike - this is a fixable problem where developer investment can yield massive benefits to studios, players, and marketers alike.
Put more simply: Conversations around marketing in gaming have become stale, and advertiser investments have come only incrementally, in part because gaming studio investment in these opportunities is uneven, as partially demonstrated by GDC. The opportunities for marketers today don’t look too different from those that were available at the origination of video games, just more conveniently purchasable via programmatic ad-tech, as it has predominantly been ad-tech companies which have been pushing what is possible in recent years. However, as I noted on the Playfronts stage, the greatest opportunities in the gaming ecosystem will come from the greatest games in the gaming ecosystem. Focusing on financial rewards tends to make for a poor game (see most of the Web3 gaming landscape as an example), but building a good game that thoughtfully allows for flexible ways to transact with customers can yield a better experience for everyone involved. While not as sexy as blockchains or AI, there is ample space for studios to innovate here in ways that are more immediately tangible and profitable.
So what do the Playfronts and GDC tell us about the future of marketing in the gaming ecosystem? In some respects, advertisers and gaming studios are like ships passing in the night, with a rag-tag group of marketers, ad-tech folks, and otherwise trying to pull them together. Much of the focus has been on overturning misconceptions from advertisers - while there is still more work to be done in this regard, the same messaging around the size/diversity of the gaming audience has become tired. In addition to pushing forward the conversation with advertisers, the topics at GDC are indicative of opportunities to battle misconceptions on the game studio side as well, not the least of which due to the fact that technology-oriented folks are just as likely to become overly invested in hype-cycles as marketers.
Forming a bridge that considers both studios and advertisers as customers for marketing propositions in gaming is both best practice and the most likely to yield the best experience for the game player. My lack of a decent suit is not only indicative of the lax formality in tech organizations, but a reflection of the fact that they are a liability of sorts in some circles: Game developers and fans are quick to blame “the suits” for experiences that are over monetized and (by extension) not all that fun or rewarding. I am certainly more of a “suit” than a developer, but in my experience the best “suits” are those that are…sans suit, at least insofar that it implies understanding and living the culture of building technology. That’s what I’ll tell myself when confronted with the piles of t-shirts and jeans in my closet, anyway.
There's an entire universe of community management and F2P gamification that marketers and "front" buyers could be working together to explore. It's hilarious how many ads mobile gamers watch, while these heads keep puzzling over how to get their ads on front of gamers. The post-IDFA landscape remains wild.