A discussion draft of the Online Sales Tax Simplification Act of 2016 is expected to be introduced in Congress soon.
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What’s more, the ZipZaps games appealed to the 18- to 34-year-olds that Radio Shack targets, says Nicole Fortner, director of national ad sales for Shockwave. "Driving games hit the nail on the head when it comes to that demographic," she says.
Although Bluefly developed the ideas for its games, most retailers rely on the gaming network to come up with a game suited for their target audience. "We work directly with the ad agency and, many times, with the advertiser," says Jerold Son, director of sales planning for Vendare Media, an online media and marketing company.
Vendare runs two gaming sites-Uproar.com and Jackpot.com-that offer a wide variety of games that appeal to a broad range of demographic groups. For example, the Uproar network features primarily word games, trivia games, and some sports games that appeal to women. Two-thirds of the game players at Uproar are women, says Eric Forst, Vendare’s vice president of marketing.
Allowing a gaming site to host the advergame is probably the best strategy for a retailer, analysts say. That’s because the retailer’s brand is exposed to a new audience. "Part of the value we bring to the table is that when we create custom games for advertisers, we have built-in distribution for those games," Fortner says, noting that Shockwave.com gets 22 million unique visits per month. "We’re not only bringing a branded experience, we’re bringing a massive amount of traffic."
Further, games hosted on a retailer’s site can prove a distraction, says Gary Stein, Jupiter Research analyst. "If you get somebody to your retail site, you don’t want to get in the way of them actually buying something," he says.
The measurement problem
Prices for customizing online games vary widely, depending on the retailers’ goals, Shockwave’s Williams says. "You can do something that’s relatively low cost for low five figures all the way up into the hundreds of thousands of dollars, depending on how complex you want to make it," he says.
Advertising in online games holds enormous potential to boost visits to an e-retailer’s site, but it has a least one downside-there are no effective ways to measure whether those visitors become buyers, Horowitz says. "There haven’t been many companies that have actually tried to close the loop in that way," he says. "That’s been the missing piece."
Conversion rates could be easily tracked by adding such things as promotional codes or online redeemable coupons to the game, but most game developers’ focus is on creating an entertaining experience rather than measuring the effectiveness of a promotion, Horowitz says.
For now, retailers must rely on two basic web metrics-impressions and time spent with the game-which don’t necessarily give a true picture of how effective the advergame is. Indeed, a Jupiter study found that the effectiveness of 88% of advergames it reviewed in 2003 was measured based on the number of times played and the length of game play. Only 13% of advertisers had set a goal of increased time spent with the brand. And while the goal of 63% of the games was to increase purchases, only 25% were tracked using this metric.
Nevertheless, many analysts expect retailers’ use of advergaming and in-game ads to increase as online advertising grows and other forms of advertising-such as television commercials and print ads-lose their effectiveness. "These kinds of games are being consumed across the board, whether it’s young or old, male or female, at work or at home," Stein says.