The Creativ Brief: In-game advertising frontiers
Video games will soon become the largest entertainment medium in the world.
Publishers, tech solutions, and agencies have taken notice, racing to fill that demand and battling to become the leader in the next frontier in marketing - in-game advertising.
That’s the topic of my latest DRUM article today - A $406bn gaming industry and the melee for advertiser's next frontier.
In 2023, the video game industry will generate $406bn in revenue worldwide, 18% more than the music and movie industry combined ($338bn). And in three to four years, video game revenues are even expected to close in on global TV revenues ($690bn).
Meanwhile, brands spend less than 5% of their advertising budget on gamers, according to a study by IAB, citing inventory, quality, measurement, and brand safety challenges.
It’s a new frontier for marketers and a space that’s heating up. Game on.
3 Stories Dominating Media and Tech Headlines
Netflix has announced a slew of new game titles coming to the Netflix mobile-app.
After acquiring new game studios, adding big name talent, and moving into cloud-based gaming, Netflix is making a serious effort to make the streaming app a competitive destination for subscription-based gaming. As of now, less than 1% of subscribers use the service.
Why it Matters: Netflix is aiming to grow its gaming user base by introducing flashy new titles. This marks Netflix’s biggest pivot since it transitioned from DVD delivery to streaming TV. With a massive and growing gaming market, adept execution should pay off.
SAG-AFTRA Secures a $40 Million Streaming Bonus.
After Studios denied the union’s proposal for revenue splits and a $-per subscriber fee, SAG-AFTRA won a “streaming participation bonus” worth an estimated $40 Million annually.
Here’s how it works:
Actors on successful streaming shows (“one that attracts views amounting to the equivalent of 20% of a platform’s subscriber base in the first 90 days”) will get a 100% bonus on the actors typical residual.
75% of the 100% will go to the actors in the top charting shows, and 25% will go to a fund jointly administered by the employers and the union.
That money will then be administered to actors on a range of streaming shows, not just the most popular.
Why it Matters: Streaming residuals are new territory for both studios and unions. Time will tell whether this deal is going to be a favorable one for the actors
US vs Google case just passed the evidentiary phase of a trial that began on September 12.
The US argument:
Google did not have to compete with Microsoft to be exclusively pre-installed on smart-phones.
Google’s payments to Apple, totalling $26.3 billion in 2021, were “essentially monopoly profits paid to distributors”.
The Google case:
These payments were legal revenue-sharing deals that resulted from competition and were “aimed at ensuring wireless carriers and smartphone makers do proper updates and keep user data secure”.
Why it matters: A ruling on this case is imminent. This case will set precedent for other major US tech antitrust cases and for standards around the use of default search engines.
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Client Spotlight - Edge of AI Podcast with MOCEAN, Adobe, and USC
Edge of AI and MOCEAN Co-host Forum with Adobe and USC on (globenewswire.com)
MOCEAN hosted executives from USC, Adobe, and their very own Chief Creative Officer, Greg Harrison for a panel discussion on technology’s implications for creativity. The panel will be broadcast on TV and on the Edge of AI podcast, found, wherever you get your podcasts.
Stat of the Week - WGA and SAG AFTRA Deal Points
The SAG AFTRA strike finally came to an end roughly a month and a half after the WGA reached their new agreement with studios on September 27.
Both actors and writers are receiving higher annual increases to base pay, protection against AI, improved working benefits, and a new residual model.
The new residual model only pays bonuses when a show attracts roughly 20% of a total platform's subscribers within the first 90 days, a lofty goal that hardly any shows hit. As we enter 2024, time will tell whether this new residual model actually pays out actors and writers in a favorable manner.
One Fun Thing - Formula 1 Craze in U.S.
Formula 1 is the fastest growing sport in America. It culminates in the race this week in Vegas where marketers and thousands of motorsport fans descend on Sin City.