Microsoft's Massive ratchets up in-game ads

NEW YORK--"Even in a down year that we're all facing, this industry's growing," said J.J. Richards, the newly appointed general manager of in-game advertising company Massive, at an advertiser event Wednesday.

"Versus other mediums," Richards said, "in-game advertising has unparalleled engagement."

Massive, which has been owned by Microsoft since 2006, took over a below-ground nightclub in Manhattan's West Village for its first "upfront" event, modeled off of the eponymous television ad pitch events for advertisers and media buyers. It also marked Richards' debut as head of Massive; he served as the head of Microsoft's Xbox Live division for several years and then Microsoft's advertising division.

The mantra of the afternoon: In-game advertising, despite still being an emerging medium, is an effective spot for ad dollars at a time when budgets are getting alarmingly tight. Or at least that's what the execs say--and game sales seem to agree for the time being. "As the demographics go, it hits this very elusive target audience around 18-to-34-year-old males, hard to find anywhere else," Richards said. "They spend more money on games than they do in music or movies."

There was little talk of the dire advertising climate, but an undercurrent of practicality ran through the event as speakers stressed in-game advertising's effectiveness. Massive executives boasted research statistics that suggest exposure to a brand via in-game advertising improves its perception by 31 percent, and that 60 percent of gamers remember ads that they see. Massive can reach 27 million gamers, they said.

The company simultaneously announced that it had forged a multi-year ad partnership with Activision, which just closed its merger with Vivendi to become Activision Blizzard. It'll be the exclusive ad provider for 18 Activision titles for the PC and Xbox 360, including Guitar Hero and Transformers.

A parade of advertising representatives from Massive partners like Ubisoft, Electronic Arts, THQ, and Activision took the stage to explain how their titles are choice spots for advertisements, from product placement to mini-contests to streaming videos.

But the easiest form of in-game advertising, it appears, remains basic display ads, often in the form of virtual billboards and signs in settings like cityscapes and sports arenas. "Sometimes the developers decide (a game's) going to take place in a swamp, and then there's no advertising," joked Jeffrey Dickstein, digital ad sales director at Ubisoft, as he showed off the "realistic urban settings" in games like the impending I Am Alive, which takes place in Chicago.

Massive made headlines shortly before last month's presidential election, when Barack Obama's campaign team bought in-game ads in some Xbox 360 games--a first for a political campaign.