After numerous rumours last month, it has finally been reported that Google, the world's leading search engine, has acquired Adscape Media, the video game ad technology firm, for $23 million. While the deal is yet to be confirmed by either party, the move may see Google extending its wings beyond its present wide reach towards in-game advertising. Although this kind of unique in-game advertising technology has been around for some time, it hasn't been widely implemented. However, big players such as Microsoft are increasingly experimenting with the medium; in 2006, for instance, Microsoft acquired another video ad specialist company, Massive Inc.
Adscape is a San Francisco-based start-up that produces technology for dynamic advertisements specifically designed for video games. It was officially launched in February 2006, but no major clients have yet been disclosed. Adscape represents what many a Silicon Valley start-up can only dream of: it's been less than a year since its official launch and it is already faced with a substantial offer from a leading internet giant.
With this acquisition, Google appears to be trying to regain ground from Microsoft who is currently leading in this field following its acquisition of Massive Inc for $200 million last year. In comparison, Google's offer of $23 million for Adscape appears to be almost a bargain price; but, at the time of its acquisition by Microsoft, Massive counted well-established global companies like Coca-Cola among its key clients, thus helping to boost its value.
There is currently a gap in the advertising market, especially for males between 18 and 35 years old, who spend less time watching TV and increasingly spend more time playing video games. Placing dynamic advertising in games will make demographic targeting possible and can also lead to different business models, such as free video games for applications including advertising.
Ultimately, advertising is all about reaching the audience - wherever they are. And while dynamic in-game advertising has not yet taken off, it certainly looks to hold a promising future. Indeed, Parks Associates predicted the market was worth $80 million in 2005, with forecasts of $605 million for the coming year. With so much at stake, it certainly seems that the battle between Microsoft and Google for the hearts and minds of game-players has only just begun.
