What you need to know:

• PwC predicts growth for gaming ad market, from $64m today to $86m by 2025.
• But that's a tiny market for a mass reach channel.
• Adcolony lead Lance Traore says brands and buyers are way behind the curve.
• But he sees the market starting to move, with the likes of GroupM poised to join other holdcos including Publicis and Dentsu with dedicated gaming units.
• Meanwhile Samsung Ads about to launch contextual targeting of gamers via smart TVs that know what games they are playing, and which console, with shoppable ad units.

Where's the smart money?

Gaming is huge in Australia but advertising has yet to catch up. Brands and buyers have largely overlooked massive audiences that can be hard to reach – and the marketers that are buying gaming ads, a $64m market per PwC, often don’t even know it.

While the pandemic’s impact is increasing advertiser appetite, many buyers remain unsophisticated, Lance Traore, Country Manager ANZ at gaming ad platform Adcolony told Mi3.

“We were invited to pitch to a high street fashion retailer recently. They wanted us to talk about ‘buying gamers’. But there are 12 million gamers in Australia and 51 per cent of them are women. Saying ‘we want to target gamers’ is like saying ‘we want to target TV watchers’,” said Traore.

“We’ve done a similar pitch for Unilever. Women dominate mobile gaming – about 80 per cent of Australian mums with kids at home play mobile games. As with tech, there has historically been some misogyny in gaming. So if you want to champion women, you should be in that environment.”

Mobile gaming makes up the bulk of Australia's gaming ad market, which PwC predicts will grow to about $84m by 2025.

Traore thinks that projection is undercooked and revenues will rise as buyers realise they can buy video in brand safe environments with no UGC for "about half the cost" of BVOD.

“I think [PwC’s figure] is conservative. I think there are parallels with 2010, where brands suddenly realised they needed to be in social media, that Facebook and Youtube were just mass reach channels. Gaming’s going through that same process. Two years ago we were having to break down doors, now we are being invited in to speak.

“Plus, the big holding companies are all launching gaming units – GroupM is preparing to launch a gaming division, Publicis has Play, Dentsu has DGame. So it’s game on and that’s why I think [PwC’s] 30 per cent growth figure is low."

In the meantime, Traore said a chunk of existing mobile gaming revenue comes from brands that don’t even know they are buying gaming, as it is rolled into video buys on exchanges.

As buyers struggle with low opt-in rates for ad tracking on iPhones following the iOS 14.5 update, hurting retargeting, performance and attribution, Adcolony claims average opt-in rates of 37 per cent – higher than most.

“That’s because people want free games,” said Traore. “If they have to pay for multiple apps, it adds up very quickly.” It may also be why more mobile video ad buys are starting to end up in front of gamers.

Samsung Ads: targeting by the game being played

Outside of mobile, Samsung Ads is about to launch contextual gaming advertising, which means brands can reach gamers with ads specific to the games they are playing on Samsung Smart TVs, according to GM Alex Spurzem.

He claimed the firm’s technology understands when consoles are switched on (and fires up an ad), what type of console is being used, when games are being played and through automatic content recognition (ACR) technology, what kind of games are being played.

Spurzem said Samsung’s research shows that one in five of its smart TVs is used for gaming, and that Australian gamers spend 85 per cent of their time either gaming or streaming. It has about 1.8m ad-enabled TVs in Australia.

“Streaming is particularly pronounced for gamers," said Spurzem. "That arguably makes them very hard to reach.” The firm is backing a blended play, through gaming ads, smart TV ads and linear TV ads to deliver “unduplicated incremental reach”.

But he thinks the new contextual targeting gaming capability and shoppable formats will move the needle – and shift Samsung Ads from advertising revenue alone into e-commerce.

“Using the technology we can identify footage from the most popular gaming titles and recognise those gaming sessions. That means brands can reach players that not only have a specific console, but more importantly, they can reach consumers based on the games and the genres that they play,” said Spurzem.

“We think will be a huge opportunity for the gaming publishers. We can bring very targeted strategies in terms of reaching gamers. For example, reaching only those gamers that are into the genre, but haven't got the exact game in question,” he added.

“So we’ve got a lot in store that we are dropping over the next weeks and months.”

Spurzem wouldn't be drawn on whether PwC's forecasts are on the money – but the next couple of years could prove bigger than some predict.