Video Game Ads: Expert Guide to In-Game Advertising Strategies

Think advertising is limited to TV spots, social media feeds, or billboards on the street? Some of the most effective ads are less obvious yet more memorable. A great example is video game advertising, where brands can live inside video games, from virtual stadium banners to branded outfits worn by your favorite characters, or even as part of the storyline. These placements don’t interrupt the experience — they are the experience.

The numbers speak for themselves: in-game advertising generated $8.65 billion in 2024 and is set to more than double by 2033, hitting $19.64 billion.

But here’s the challenge: how can you make sure your video game ads actually enhance the experience and not disrupt it? That’s what this guide is all about. But before we proceed to practical recommendations, we will also consider the video game ads meaning, ad formats, strategies, and key advantages that brands can leverage thanks to this format.

What is Video Game Advertising?

This approach combines advertising with interactive entertainment and can be presented in different types based on how the brand prefers to reach players.

Types of video game advertisements

The ad formats vary in how immersive or interactive they are. But what unites them all is the goal to reach audiences in a way that feels as natural within the gaming environment as possible.

Here are the most common types of video games advertising:

• In-game advertising. Such ads appear directly inside a video game. They can be demonstrated as billboards, branded items, or character clothing. Developers can also integrate branded accessories or gear for characters. This type of advertising works best when it feels natural and enhances the realism of the game.

Source: https://www.gamesradar.com/its-coke-vs-pepsi-in-fifa-17/

• Advergames. These are games that were entirely created to promote products of a particular brand. For example, a fashion brand can launch a free game for its target audience around its collections.

Source: https://hero-magazine.com/article/

• Product placement. Products can be integrated into the gameplay itself. In this case, players can drive real-world car models in racing games or choose some real-life food brands in a kitchen-simulation app.

Source: https://nfs.fandom.com/wiki/Ferrari

• Sponsorships and esports advertising. Brands can sponsor streamers or gaming events to reach their audiences. Energy drinks and hardware makers often leverage this possibility to gain visibility. For example, Red Bull is actively involved in sponsoring esports tournaments and professional teams.

Source: https://www.campaignlive.co.uk/article/

• Reward-based ads. This format offers users in-game rewards for watching short video ads. For example, a player can watch a 30-second video ad to earn extra lives, coins, or exclusive in-game items. These ads are optional and beneficial. That’s why they are often well-received and drive higher engagement rates compared to intrusive formats.

• Native advertising in virtual worlds and metaverse platforms. Branded experiences or virtual stores can be integrated to mimic real-life shopping. Instead of static placements, companies can build branded virtual stores, sponsor events inside digital spaces, or create interactive experiences like mini-games. For instance, Gucci launched the Gucci Garden experience in Roblox. As a result, players can explore a virtual exhibition and purchase limited-edition digital items.

Source: https://techcrunch.com/2021/05/17/

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How Brands Can Benefit from Video Game Advertisements

Given the popularity of video games (in Q3 2024, the global penetration of video games reached 83.6%), this format of ads can provide a good possibility for brands to reach a wide audience. Here are the key benefits you get when launching advertising in video games.

• High audience engagement. Players are deeply focused during gameplay. That’s why ads that are placed naturally in the environment are more likely to be noticed and usually can’t be easily skipped.
• Positive brand association. For brands, it can be a good initiative to become part of an enjoyable experience for users. It helps build positive emotions toward the offered products or services.
• Extended interaction time. Very often, gamers play for long sessions. It ensures repeated and prolonged exposure to a brand.
• Targeted reach. Different games attract different audiences. When considering various options for placing in-game video advertising, brands can already know what specific social groups they can reach. For instance, eSports games traditionally attract young adults. At the same time, casual games are built for families.
• Better brand recall and recognition. By using the possibilities of the gaming format, brands can create interactive experiences, including quests or challenges. This approach helps encourage direct participation instead of passive viewing. Thanks to this, users are more likely to memorize the promoted services or products.
• Cost-efficiency. Compared to TV or print campaigns, a video game ad can often reach millions globally at a lower cost. Moreover, a lot of popular games are played worldwide. As a result, brands can connect with international audiences without launching separate campaigns for each region.

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Key Trends in Video Game Ads

The advancements in the tech world are broadening the horizons for advertisers and enabling them to create commercials that are highly engaging and tailored to their audiences.

AI-powered personalization

Artificial Intelligence helps brands make ads more personalized and adaptive. AI algorithms can learn what kind of ad works best for which player and tailor creatives to achieve the highest efficiency.

User-generated content (UGC)

Players are not just a passive audience. They can also create content for brands that can be further used for their promotion in games. In addition to this, UGC can be used to build a powerful community.

Playable ads

Very often, this format is used for promoting a game among the audience of other apps. These ads are designed to let the player try a snippet of gameplay or a mini-game even before it is downloaded. Such a format ensures higher engagement and often higher conversion than traditional video banners.

AR, VR, and XR experiences

With the new developments in these technologies, more ads are being built for augmented, virtual, and mixed reality contexts. These are immersive, interactive ad formats (like virtual billboards in VR) that help brands promote their products without disrupting gameplay.

NFT games and digital asset advertising

Today, we can notice a growing number of advertisers entering Web3 gaming spaces. Some brands collaborate directly with developers of play-to-earn or blockchain games. Thanks to this, they can create or sponsor in-game NFTs (non-fungible tokens) such as outfits, weapons, or collectible items. Moreover, some advertisers design NFTs tied to a game, then sell or give them away via specialized marketplaces like OpenSea or Rarible.

Effective In-Game Advertising Strategy: Practical Tips

Video game ads open great opportunities for brands in establishing long-term interaction with players, which can result in higher conversion rates. But to fully leverage the provided possibilities, you need to have an effective in-game advertising approach. It requires a deep understanding of your audience, as well as knowledge of the peculiarities of different ad formats.

Our step-by-step guide will help you find the right approach to building your ad strategy.

Step 1. Identify your key goals

First of all, you need to define what you want to achieve. Do you want to increase your brand awareness? Or is your task to inform your audience about a new product? Or will your ad be aimed at lead generation?

Based on your goals, you also need to set measurable KPIs like impressions, click-through rates, in-game actions, or conversions.

Step 2. Analyze your audience

It’s vital to analyze the demographics and interests of your target groups. You should pay special attention to their gaming habits. Let’s be honest, there are a lot of social groups that do not play games at all. In this case, you will need to consider other ways to promote your brand.

Step 3. Define the right game and platform

Your ads should align with users’ preferences and the types of games they play. But apart from this, you also need to think about the platforms (mobile, PC, console, or VR) that are the most popular among your target audience. This will help you make the right choice.

Step 4. Opt for the best ad format

You should select an ad format depending on the preferences of your audience, the chosen game type, and your budget. For example, though advergames can ensure great immersive engagement, they will be much more expensive than static billboards or rewarded ads.

Step 5. Think about seamless integration

It is vital to avoid disrupting gameplay. Ads in video games should feel natural and, if the chosen format allows this, even enhance the user experience. Story-based placements often perform much better than intrusive pop-ups, but not every game offers such a possibility.

Step 6. Personalize user experiences

To ensure the highest efficiency of your ads, it is recommended to personalize them in accordance with the interests of a specific player segment.

If you launch global campaigns, it will make sense to consider localization and not only in terms of language but also in terms of context and culture.

Step 7. Test, measure ROI, and optimize

To optimize your in-game advertising strategy, you should conduct A/B testing of different creatives, placements, and formats to determine what resonates most with players

It’s important to measure both short-term metrics like clicks and video completions, as well as long-term outcomes such as brand recall and conversions. By leveraging analytics throughout the process, you can refine future campaigns and ensure your budget is used efficiently.

Final word

Video game advertising has evolved far beyond simple product placements. It has become a powerful channel for brands to build unique connections with players through immersive virtual experiences and subtle integrations into gameplay. The key to success lies in finding the right balance between making your commercial visible and keeping the gaming experience seamless and enjoyable.