Can gaming grow into a mainstream advertising avenue in 2021?
Despite the exponential growth of online gaming, industry experts believe that the genre needs a lot of evangelising effort before the advertising community takes it by storm
One of the categories that exploded during the lockdown in 2020 was online gaming. People began to inhabit a virtual space embodied by their cartoon avatars and interact with each other in the world populated by military commandos, ludo pawns and mystical beings. Advertisers soon took notice and realized that a category was shaping up before their eyes with the traction skyrocketing in April and May.
Vinit Karnik, Business Head, Entertainment, Sports, & Live Events, GroupM, explains that the advertising spends in digital as a category went up significantly in 2020 due to the pandemic and ‘gaming’ was one of the biggest beneficiaries. He went on to add, “Rewarded video is a common advertising inventory available within multitudes of gaming apps and part of the programmatic planning process. Digital advertising is now considered mainstream and expected to grow more in the coming years. The fortunes of advertising in gaming apps are directly linked to the growth of digital advertising.
"The landscape now is inching towards exponential growth. During the pandemic, there was an astronomical rise in the number of users and time spent on gaming apps. This lead to a lot of chatter in the advertising corridors and brands have started to explore their way around the world of gaming and esports. It’s still early days for advertisers to pass the verdict on gaming/esports advertising opportunities available in India and hence the trajectory can only go northwards in 2021,” he says.
Manav Sethi, Chief Marketing Officer, Octro says: “Money follows wherever eyeballs are! US market is 2.1B leisure hrs/day. Today 75% of that is TV and 50% of TV is consumed by 50+. But the percentage of time spent on gaming is way higher in Gen X+Gen Z, we will see a shift in leisure hours & monetisation of those hours moving to gaming.”
Advertising on gaming apps can be largely categorised in two parts: endemic and non-endemic brands. Karnik elaborates: “Endemic brands would include other gaming apps, gaming hardware etc. These brands would form a large chunk of the advertiser community on gaming apps whereas non-endemic brands are ones whose core business isn’t associated with gaming and peripherals. These advertisements are largely via the programmatic pipe and are genre-agnostic. However, there are a small group of early movers who have explored exclusive tie-ups with gaming apps that cater to their core TG and dabbled with in-game branding options, products/service integrations and of course rewarded videos. “
The category is still trying to find its footing as these are still early days. According to Karnik, brands are trying to find their way around the labyrinth of gaming/esports. “The industry needs a lot of evangelising effort before the advertising community takes it by storm. However, we see kids and youth-centric brands taking baby steps in this direction and leading the way for the rest of the advertising community just like influencer marketing a couple of years back. “
Sethi added, “Gaming today is already bigger than Movies and Music combined. With ‘metaverse’ in gaming acquiring scale, music and video will be subsumed by gaming environments and hence it’s an emerging and scalable advertising medium that has the potential to surpass any other mediums that we have seen thus far!” He says that the Global player spending on mobile games increased by 25.7% YOY during Q1- Q3 2020 to ~$58.7B.
Vikash Jaiswal, Founder and CEO, Gametion Pvt. Ltd, says that the ‘sudden’ success has actually grown organically over the last four years. He says: “The lockdown gave a new opportunity for people now to spend quality time with family and friends and those alone to connect with complete strangers online. Many new users were looking at alternate experiences over TV & OTT and hence Ludo King gained momentum and popularity.”
Jasiwal said that the market value of India's gaming industry was around Rs 90 billion in the financial year 2020. This was estimated to go up to over Rs 143 billion by next year. It will also lead to over 40 thousand new job opportunities by 2022.
Karnik laid down four things that will decide the growth of gaming. They are a) growth of smartphone penetration in India which improved at approx. 15% CAGR during 2015-20; b) growth in the number of internet users, which is around 14% CAGR during 2015-20 c) young median age of avg. Indian at 27.9 yrs. leading to growth in the number of online gamers at 13% CAGR over 2018-22 and d) rise in investment in the gaming ecosystem in India.
“Advertising in gaming, in the short term, is directly linked to growth in ‘digital advertising’ in India. In the middle to long term, the onus rests equally on both the advertising and rights holder (publisher and esports organiser) community to work together and create symbiotic solutions to chart the adoption and growth of ‘gaming’ as mainstream advertising avenue,” he concludes.
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