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How Advergaming Works

        Money | Marketing

The Future of Advergaming
On June 16, 2006, American Apparel became the first "real life" company to open a store in the world of Second Life.
On June 16, 2006, American Apparel became the first "real life" company to open a store in the world of Second Life.
Photo courtesy of American Apparel Second Life

­ Predictions for the future of advergaming are scattered. The Yankee Group, a Boston-based business technology consulting group, predicts that advergaming and in-game ads will be a $260 million market by 2008. Market researcher David Cole at DFC Intelligence expects revenue from online-game advertising to rise from $120 million in 2004 to $500 million in 2009.

The impressive growth of advergaming shows no signs of slowing down as more companies are discovering its effectiveness at creating brand awareness and achieving their product goals. Even business-to-business companies are getting in on advergames to reach their clients and gain footing in new and competitive markets.

Second Life is a virtual world where you recreate yourself in any form you want (your avatar) and roam around doing much of what we do here in our real lives. American Apparel even opened a store there where Second Life citizens can buy virtual clothes with virtual money.

This money, called Linden Dollars, can both be purchased with real dollars (with an exchange rate of around $268 LD to $1 US as of January 2007) or your avatar can earn it. Yes, get a job in this virtual world and earn your keep. According to Fortune magazine's David Kirkpatrick, Second Life creator Linden Lab reported that in December 2006, "17,000 [Second Life] residents had positive cash flow in Linden dollars, with about 450 generating monthly income in excess of $1,000" in U.S. dollars.

It goes far beyond clothing for your avatar, however. In Second Life you can buy virtual land, build virtual houses, create virtual art, go to virtual parties, and anything else you can imagine. So, naturally, it’'s the next logical step for advergaming. In fact, there are already games you can play within this “game.” The next step for product sales is to have the ability to shop in Second Life stores, buying merchandise with Linden dollars and have the product arrive at your doorstep in the real world.

Second Life is also being marketed for business and education for collaboration, training, distance learning, new media studies, market research and even marketing new products. They suggest holding virtual meetings with staff located around the world. On the Second Life Web site, they even recommend that companies building their own world (like Scion City) where Second Life citizens can interact with products, enabling the company to test new designs before going to production in the real world. Second Life can also accommodate events to promote products, like concerts, classes, parties or contests. Not only that, virtual products can actually be sold in Second Life. As they say with Second Life, "you are only limited by your imagination."

Sony announced recently its plans for the new PlayStation Home at the Game Developers Conference (GDC) in San Francisco. Expected to launch in the fall of 2007, PlayStation Home is a 3D-avatar-based communication, community and commerce online site. Like Second Life, players can dress, house, decorate and socialize within the game. Also like Second Life, the in-game advertising is rampant throughout. Home users can fill their apartments with all kinds of electronics -- all with the Sony brand. All public spaces and lobbies in Home will have large, dynamic video monitors, banners and billboards advertising various products. Home areas can also be branded by any company willing to pay for their logo. For example, one home area had numerous EA Sports games. Avatars could hit balls on the branded "driving range," shoot hoops with layered with basketball game logos, or beat up on a boxing-game-themed foam dummy.

For lots more information about advergaming and related topics, check out the links on the following page.