In-game advertising has always been a bone of contempt for gamers. Whether you ignore them or not, game companies have been utilizing them for a good number of years. But just how effective are they? According to EA’s Ben Cousins, not very.

Ben is the General Manager of Free-to-Play and believes that in-game ad-driven revenue isn’t yielding the expected returns compared to other emerging revenue streams. He points to the success of Zynga, the publisher responsible for a highly successful string of Facebook games which include CityVille, FarmVille and Mafia Wars. He believes that the financial success of these games can be attributed to the model of microtransactions and not the ad based revenue found within these games. Cousins stated on the two:

“If you think about how fast the virtual goods business has grown in the last year or so, it’s been much quicker and become a much more reliable source of revenue.”

Ben was speaking ahead of Battlefield Play4Free, EA’s latest free to play game. Its predecessor, Battlefield Heroes, contained both in game advertising as well as microtransactions. As he put it they “hedged their bets” and focused on creating revenue from multiple streams, a move that in the end created one system which yielded a large return and another which didn’t take off so well.

“We thought we’d do in-game advertising and virtual goods sales, and one of those took off really fast and the other hasn’t really taken off at all.”

Micro transactions are becoming popular among developers because they encourage players to spend real money in order to access more advanced features. It isn’t just Facebook games that are adopting this stance of extra content, Valve’s popular FPS Team Fortress 2 recently implemented a similar microtransaction system which allowed gamers to purchase specific in-game items for real money.

Ben was careful not to write off in game ads, stating that correct implementation can have positive benefits.

“We did a deal with Dr Pepper for Battlefield Heroes, where if you buy a bottle and scan in the code you get an exclusive outfit. That kind of deep integration will work, I think, but I’m not convinced that we’ll have billboards in games and things like that. Maybe those days are over.”

In-game advertising is when developers create in-game space to sell real life brands. Advertisers pay for their brand to appear in game so extra money is generated. Sometimes this is as seamless as an advertising billboard, but others can be more intrusive, like a logo or specific mention of said brand. The debate around their presence has always been how intrusive they are in the gaming world. It’s fine seeing an advertisement for cars in Burnout: Paradise, but did American voters really need to see a campaign banner for Barack Obama’s presidential election? It’s this sort of questionable implementation that raises doubts about the effectiveness of in-game advertising.

Can you recall any of the in-game ads you’ve seen recently? Do you think in-game ads are intrusive? Do you prefer the microtransaction model employed by developers?

EA’s Battlefield Play4Free is expected to launch in March 2011 on the PC.

Source: Next-Gen