Nielsen Gets Game: Is the Industry Ready for Its Big Media Moment?

Electronic Gaming Business, May 5, 2004

Who knows? Someday gaming executives may be pouring over the morning game play "overnight ratings" with their coffee and haggling over whether they will get double digit increases in next year's "up front" sales for in-game ads. Well, don't plan to lunch with Jeff Zucker or Mel Karmazin anytime soon, but Nielsen Entertainment seems to think that gaming's moment in the media spotlight has arrived.

Advertisers spend $8 billion to $9 billion a year marketing to 18- to 34-year-olds, "and only $10 million was spent last year on in-game advertising," says Michael Dowling, general manager, Nielsen Interactive Entertainment. "There is definitely an opportunity between $10 million and $9 billion, and we think metrics like ours will get the industry there more quickly." Of course, TV-like games ratings have inherent upsides and downsides.

What will game metrics look like? According to Dowling, who is developing the standards and pitching publishers and media buyers on the proposed Nielsen service, an accurate measurement will need to account for the four main "quadrants" of game play: online and offline PC and online and offline console playing. These ratings will measure not only the number of people actively playing a game but also how long they are playing, which levels they have reached, and which ads they were exposed to and for how long. The current method of "guaranteeing" ad impressions via projected sales figures on a title is too rough a guess, says Dowling, and it doesn't account for pass-along use, the actual depth of play gamers achieve on a game, and the kind of time they are spending with it.

The proposed technology is a twist on the Nielsen "people meter," a device that is separate from the TV and console and measures details about game play communicated to it by inaudible audio cues that publishers would agree to embed in their titles. The cues could even be appended to any product advertised on a particular level of a game so that the meter measures any player interaction with an ad as well. This way, advertisers could get a more precise indication of the actual ad impressions delivered and their ROI on an in-game media buy.

"What Nielsen has done successfully is come into industries that have tried to develop as ad media and have played the organizational element where we provide the currency between buyer and sellers of media," says Dowling. "Ad impressions that are claimed are no longer in question, so they have a credible third party measuring that and they don't have to fight with agencies."

"We're ecstatic about them offering the service," says Tim Harris, codirector, SMGPlay (the games division of media buying goliath Starcom MediaVest Group), who is also working with Nielsen to develop the metrics. "We've got specific needs that need to be taken care of," he says, such as giving advertisers demographic data about who is playing the game and for how long. Harris is especially interested in Nielsen's ability to create a "gaming universe, so that I know what kind of share voice I have and what percentage of the target universe I am reaching."

Of course, as old world media moguls have seen in TV, radio, and the Web, third-party measurement also can introduce as many new fights about metric reliability as they settle. Like its TV ratings, Nielsen's proposed game metrics would require a panel approach, a sample of metered game playing households that the company must project to represent all gamers. How panels are created and extrapolated are always at the center of media debates over ratings. "I am very interested in how they are going to create their methodology," says Harris, "another reason we are trying to stay close to this."

More Than We Want to Know?

More precise measurement of usage could also be a double-edged sword for the industry. Nielsen's game metrics would offer both publishers and ad buyers a detailed and comprehensive view of how long gamers play particular titles, how many actually finish a game, and when they tend to cycle out of games. This could radically alter the ways in which games are designed and marketed and ads are bought and sold in them. On the upside, publishers might be able to leverage this data to extend their sales windows outside of the crowded fourth quarter, or they might be able to generate events and promotions that are better timed to extend the life cycle of a game as the numbers reveal that gamers are losing interest.

But metrics precision introduces new layers of complexity to in-game advertising. Now we will see things like ebbs and flows in overall game usage throughout the calendar year, perhaps changing the value of in-game real estate according to when a title releases. Knowing how far players get in a game (perhaps not as far as we would like to think) also changes the value of ad real estate in a game by its level.

In fact, with their rough understanding of how people play games, cutting edge games media brokers like Harris have already divided their in-game placement strategies into three tiers. Understanding how few gamers actually finish a title, he tends to front load the early levels of a game that everyone sees with "high reach, low impact," branding messages and uses more involved "high impact" interactions with a product for later levels or unlocked areas where the smaller but more targeted hardcore audience reaches in a game.