10,000 Simburgers Served: McDonald's Gets Game

Electronic Gaming Business, July 16, 2003

Game publishers interested in nabbing some product placement revenue in the new world of alternative advertising might want to keep an eye on potential advertisers that are already investing heavily on other forms of interactive advertising, namely the Web. Companies like McDonald's often experiment with ingame promotion for the same reasons they look to Internet promotion: to engage hard-to-get audiences with their brands in innovative, deeper ways.

In the advertising world, fast food giant McDonald's shook the industry earlier this year when it announced it was reallocating a substantial share of its traditional media budgets to interactive. According to Neil Perry, senior director Internet marketing, the company will double its investment in Web advertising in 2003 and then again in 2004.

This matters to game companies because the company is also experimenting significantly with in-game product placement. McDonald's partnered with Electronic Arts late last year as a launch partner for The Sims Online. Game players could download and build within the massively multiplayer online world McDonald's burger kiosks and even make virtual money from it within this Sims universe.

"Out of all people who played [TSO] 10% have had McDonald's food," says Perry. At last report, TSO had only 100,000 paying subscribers, so McD's may have garnered a small audience relative even to a cable TV buy.

But the point about in-game product placement like this is as much about grabbing audience attention as it is about spending more quality time with that audience - brand involvement - and associating with that audience's tastes. Perry says that McDonald's is in games "to create relevance to the consumer base. If we know people are spending an inordinate amount of time with games, then we need to be in that environment."

Perry plans on doing more with online games later this year and will have substantial brand presence in two console titles: EA's NBA Live 2004 and Activision's Disney Extreme Skate Adventure.

Like a lot of packaged good manufacturers, McDonalds is looking to expand its brand favorability among the same audiences that interest larger game companies, the underserved African-American and Hispanic-American segments.

In fact, Perry says that if anything is limiting McDonald's online spending it is the Web's limited coverage of select ethnic minority audiences. This could be a good opportunity for game companies, which are gaining significant penetration within these segments and targeting them specifically with a number of euphemistically labeled "urban" titles.

Still missing from the in-game promotion proposition is metrics, a better understanding of how these placements truly affect consumer attitudes toward a brand (favorability, recognition and brand recall, intent to buy, etc.). Perry says this is the next step for McDonald's, which has contracted focus group research involving players of both upcoming console titles.

In addition to the usual branding metrics of advertising, packaged goods manufacturers like Perry are especially interested in whether gamers think the brand is appropriate within the game.

Again, the game industry might want to take a page from online's checkered history with advertising support. Like gaming, the Web enjoyed a period of unrivaled hipness with ad clients, who invested promiscuously in the medium even if they couldn't say exactly why.

The subsequent crash in Web ad spending demonstrated that without reliable metrics, a medium cannot sustain ad spending.

Wisely, online publishers like iVillage and Forbes.com often conducted third-party post-campaign branding studies of their own in order to build a portfolio of case studies about the unique effectiveness of advertising on their sites, and game companies should be looking to do exactly the same thing.

In order to re-establish themselves with the media buying community, many publishers included this post-campaign research as a value add for clients when they bought ad placements. Game companies might want to mimic this approach, because it helped Web publishers demonstrate confidence in their medium to clients and also accepted the responsibility for proving to the ad community the value of their medium.

Absent any initiatives from its own Interactive Digital Software Association, the gaming industry may look to the Web's own organization, the Interactive Advertising Bureau (IAB at www.iab.net) to sponsor research and cheerleading that advance games as an ad vehicle. Flipside Network (Uproar.com, iWin, etc.) and advergaming designer WildTangent are already members of the IAB, and the association tells EGB that it is discussion forming a committee dedicated to the platform.

Gaming can sell itself to advertisers like Perry on a sustained basis only if it has a body of research that shows clients what they are buying and especially why the client should reallocate money from one medium like TV or print to another like gaming.

As Web sales forces discovered after March 2000, once the hip veneer wears thin on a new advertising platform, it had better have metrics that look and sound a lot like the decades of metrics that have supported TV, print, radio and direct mail.