Since the 1980's video game technology has immensely improved, and continues to do so today. This has resulted in two things that make in game advertising a potentially great opportunity for marketers looking for new ways to place their ads and target consumers. First, there are more people playing video games, with an estimated 132 million gamers in the United States alone. Second, improved technology has led to better ads in video games.

While more consumer analysis is needed to gauge the absolute effectiveness of advertising in the gaming environment, the market for product placements in video games has been increasing every year. What is the theory behind in game advertising and how does it work? Are there any drawbacks to this promising new advertising technique that both marketers and gaming companies should consider? How do brand placements affect the gaming experience for players?

What Is In Game Advertising?

In game advertising, also known as IGA, is simply the placement of different brands within games. This technique started with billboard advertisements along race tracks, a standard visual ad for the consumer to be exposed to. It has evolved into an actual brand experience — while playing, consumers can actually interact with products. According to the 2010 article in the Journal of Interactive Advertising, "Online In Game Advertising Effect: Examining the Influence of a Match Between Games and Advertising," more than half a billion dollars was spent globally on ads in video games in 2006. It is expected that nearly two billion dollars will be spent in 2011.