Placementspot.com creates matchmaking service for in-game ads

The market for in-game advertising — or piping ads into games via Internet connections on the fly — is nascent. But it’s starting to take off. Microsoft has moved in thanks to its acquisition of Massive. Start-ups such as DoubleFusion and IGA Worldwide have strong traction. And Google is waiting in the wings for its own chance to participate.

But Placementspot.com, an unfunded one-man shop at the moment, hopes to create the first online marketplace for in-game advertising and in-game product placement opportunities. Usually, the big companies have done one or the other, but they have left the matchmaking to big ad agencies.

The site would be a market where game companies could list the opportunities for brands to place ads in upcoming games. Advertisers, meanwhile, could use the site to tell game companies what sorts of campaigns they have coming up that could be placed into games. Since any advertising campaign takes time to pull together, both sides could benefit from a semi-private market, said Michael Brown, founder of the Battleground, Wash.-based Placementspot.com.

The market could cut out the powerful middlemen of the industry: the ad agencies that create campaigns for the digital domain. But because they’re so powerful, these agencies won’t go down without a fight. But Brown believes he has the efficiency of a more automated market as an advantage.

Brown started the company just two months ago and his public beta kicked off last week. He’s talking with a few game companies. Once he signs them up, he believes that advertisers will come. So far his company is self-funded and his software development is contracted out.

It certainly sounds like an under-funded garage operation so far. You would think that Brown would need a bigger team to make this into a real company. He could, for instance, use a lot more game industry and ad industry veterans in the company to earn it some credibility. Perhaps that will come with more funding down the road. On the other hand, if an idea is simple enough, it just might work.

In-game advertising is expected to grow to $971 million in 2011, according to the Yankee Group. Microsoft’s Massive in-game ad division reported in June that dynamic in-game ads create a consistently positive opinion of the ads and the brands they advertise.

Advertisers can anonymously list their interest in particular game platforms, their demographic targets, game ratings, and other data. Game companies can say where the ads will run, such as on a truck inside a particular game. Placementspot.com will charge a flat fee for placement of ads in the market. Brown said that his company is the only one doing such a market in video games, but it does resemble the business that Storybids.com has generated in creating a market for online video ads.

“We are trying to be an early entrant into the market to position ourselves for three to four years down the road,” Brown said.

One thing is for sure. With recent activity in in-game advertising, the market is heating up. Yahoo and Sony have recently indicated their interest in in-game ads, while Microsoft bought Massive, the largest in-game ad company in 2006.