Mobile games are sucking a lot of advertising money out of other media, according to a panel of advertising experts at major game publishers. This is happening so much that Dave Madden, senior vice president of global media solutions at Electronic Arts’ mobile games division, believes that mobile gaming will be the “single largest advertising platform in the world.”

Madden is a natural optimist about mobile games and the growing amount of brand advertising in them, based on the discussion at the Global Mobile Internet Conference (GMIC) this week in San Francisco. He likened advertising in games today to the advertising on ESPN when it was a fledgling cable television channel.

“We are starting to do deals with Madison Avenue agencies and brands,” Madden said. “Brands are trying to figure out how to get to this young, engaged mobile consumer with an experience that they will welcome. It’s like ESPN in the old days. They started with direct response ads, and now it’s Budweiser advertising.”

He added, “Advertising is moving out of TV because it is a disruptive and annoying experience.” TV ads get in your way of what you want to see. The same is true for radio ads, as radio stations play ads at exactly the same time to prevent you from surfing channels to find music when an ad comes on. Such practices annoy the audience.

By contrast, advertisements in games can be targeted directly the right people, so the ad is actually relevant to the person’s interests. And they can be part of welcome rewards. If you agree to view an ad about a subject that you enjoy, such as a Star Wars trailer, your reward could be in-game currency that allows you to purchase something in a game.

“The money is moving to mobile, where the ad is targeted and welcome,” Madden said. “The first beneficiaries are Twitter and Facebook, which know how to target advertising to users.”

Christian Limon, vice president of growth and advertising at mobile game maker Glu Mobile, agreed. Gamers are happy to watch a 15-second or 30-second rewarded video, said Ashley Higgins, senior manager for ads at Sega.

“We still count on in-app purchases for the majority of monetization, but the video rewards are user opt-in, and players like it. They get a positive experience from the ad engagement.”

Madden cautioned that you have to be sensitive to the user experience, as you can’t get users back after you’ve annoyed or frustrated them.

“If you re-create the radio and TV model and annoy them, and force them to go to a less abusive experience, then you’ve created the exact opposite experience you want to do with advertising,” Madden said. “If you put in advertising in your game that enhances the experience and makes them feel good about playing your game and coming back to your game, then it’s a win for you.”

Madden added, “It’s happening. Brands are buying into it. Users love it. The data is undeniable. Gaming will wind up being the single-largest advertising platform in the world because the number of devices in people’s hands will far outweigh the number of TVs that are out there. Gaming is the No. 1 app on mobile devices….It may not happen overnight. But ten years from today, mobile advertising will be the single largest advertising platform in the world in games.”


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