Atari Creator Says Games Fertile Ground for Marketers

John Gaudiosi

Advertising Age

July 9, 2008

Nolan Bushnell, who as the father of Atari is considered by many to be the godfather of video games, believes every advertiser should have a significant amount of money targeted at the casual video-gaming space.

“We know no one is TiVoing through our ads, and we know they’re not taking bathroom breaks because there’s not enough time,” Mr. Bushnell said. “When you’re looking down the barrel of six ads on TV, there’s a lot of stuff you can do in that amount of time.”

Yahoo is latest partner
Mr. Bushnell serves as the chairman of the board for NeoEdge, which created the NeoArm ad-enabling technology and the NeoAds advertising network. The company just signed a deal with Yahoo Games to support its casual-game offerings to sell and integrate pre-roll, mid-roll and post-roll video ads into Yahoo’s casual-games catalog beginning this summer.

By the end of the year, NeoEdge, which is working in tandem with in-game advertising firm Double Fusion, will have more than 400 free downloadable ad-supported games from over 30 publishers on the Yahoo Games site. There are currently more than 18 million casual gamers on Yahoo, which has been the No. 1 destination for casual games for 50 straight weeks.

NeoEdge allows any game to become ad-enabled without touching the core source code, which opens up any gaming experience to advertisers interested in Yahoo’s “mass-casual gaming demographic,” which Kyle Laughlin, head of Yahoo Games, said is 60% female with an age range of 25 to 54. These consumers spend about 160 minutes a month playing casual games. In addition, these casual gamers are accountable for 86% of all household purchases.

“We can target consumers so well through casual games,” Mr. Bushnell said. “We have all the power of the internet, all the production value of the 30-second spot, which companies spend millions of dollars on to get just right, and then you have the click-through—it’s the perfect storm of advertising.”

Proud of numbers
Mr. Bushnell said advertisers should sink significant amount of money into the casual-gaming space because it’s unbelievably inexpensive for the value it’s providing.

“If you really were to compare NeoEdge ads to TV ads, it’s probably three to five times more effective,” Mr. Bushnell said.

Mr. Bushnell said casual gamers actually look forward to the short 30-second ad breaks between games, because the gaming experience can be intense, even for casual games. NeoEdge research has shown that gamers watch these ads. He just doesn’t understand why advertisers have been so slow to catch up with the reality of today’s casual-gaming market.

“Casual games should be the main focus of any advertiser today,” Mr. Bushnell said. “If you look at the numbers now that the average person spends seven hours playing casual games a week vs. 27 hours watching TV, and then see that advertising in casual games is less than $1 billion and TV is over $200 billion, it’s clear that somebody is getting ripped off and somebody is getting a good deal.”

NeoEdge has already worked with companies such as A&E Television Networks, Procter & Gamble, Toyota and Ford through its NeoEdge partner network of 50 publishers and 300 ad-supported games.

‘Staggering’ opportunity
“Estimates are that 80 million consumers play casual games on a regular basis. We think this means 20 to 30 billion hours a year,” Mr. Bushnell said. “We look at this as a staggering multibillion-dollar opportunity. I think there are still a lot of advertising budgets that are driven by legacy thinkers and they’re going to get it one day, and then all of a sudden it’ll be like a dike breaking.”

EMarketer reports that web-based game ad spending will jump 133% between 2007 and 2012.