What Advertisers Can Learn from the Gaming Industry’s Missteps
 
18 May, 2017 · Jason Nesbitt, VP Media & Agency Operations, Strike Social

What Advertisers Can Learn from the Gaming Industry’s Missteps

 
Jason Nesbitt, VP Media & Agency Operations, Strike Social

Ask any advertiser, and they will assure you that stereotypes don’t have a place in their campaign strategies. They’ve spent the money, done the research, and made sure their core customer persona is informed by that research, not a made-up image. After all, this is a data-driven marketing world we’re living in.

As a veteran of the adtech business, I take these personas with a grain of salt. Despite the rise of data-driven advertising, a lot of marketers still cling to their $30,000 customer personas while eschewing real-time analytics that could unearth new audiences ready and willing to engage.

I can’t fault marketers completely. It can be scary to stray from what you think is your best targeting option, especially when it may not look like the typical user of your product. But when it comes to assessing ad spend, view rate (the metric that indicates how often people interact with your ads) should be the guiding light. Let the data dictate where you put your message and your budget.

Who is a gamer, really?

The gaming industry is a great example of needing to break through this mold. Most gaming advertisers tend to target the stereotypical image of the young male gamer we’ve all seen before. In fact, when it comes to YouTube advertising, the gaming industry allocates 84 percent of its budget to men (versus 10 percent to women and 6 percent to people listed as “unknown” in gender).

Still, gaming is much less of a niche interest than many may assume. Sixty-four percent of Americans play video games, and, at a rate like that, there’s no way advertisers can get away without targeting to women and middle-aged adults while still running a successful campaign.

According to the Entertainment Software Association, the gender breakdown of those who play video games is 41 percent female and 59 percent male. And to completely debunk the stereotype of the young male gamer, women 18 and older represent a much larger portion (31 percent) of that population than do males under 18 (17 percent).

Given this data, it’s no surprise that females are engaging with gaming ads on YouTube just as often as their male counterparts. The average year-round view rate for both genders is 24 percent.

It’s also important to note that view rates fluctuate year round. Guess who has the biggest monthly spike in view rate? Females. In the month of May (just ahead of E3), female view rates skyrocket to 38 percent. Male view rates for the same month hang at just under 30 percent.

There really is no excuse for excluding females from a gaming ad targeting strategy. We know women are engaged, and they’re hardly more expensive to target either. Their average cost-per-view (CPV) comes in at not even a half a cent more than the average male CPV ($0.049 vs. $0.046), making the case for ROI a no-brainer.

Gaming’s engagement problem

Of course, the young male consumer profile should be included in a gaming brand’s ad targeting. I happen to fall into that group myself as a gamer and have been heavily embedded in that world for more than 10 years.

The fact that ad engagement rates for the gaming industry fall at the back of the pack means there’s significant room for improvement in the way these advertisers set up their targeting. The industry’s 24 percent average view rate comes in second to last among a list of 25 industries total. This means gaming is surpassed in ad engagement by traditionally “dull” industries like B2B and telecommunications.

The gaming industry should not be this low on the list, since gamers love to consume online video content. You can find hours of game walkthrough videos on YouTube for everything from Minecraft to Madden. Seventy percent of gamers watch this gaming content on YouTube, and other mainstream outlets (including almost every social platform and ESPN) are hopping on this trend to offer gaming content channels as well.

Think outside your typical target

So how can advertisers get smarter with their targeting and not exclude highly valuable groups? The trick lies in multivariate testing — essentially switching your view from a few broad persona-driven campaigns to hundreds of smaller ones, all driven by data.

Without breaking your campaign into smaller molecules, there’s virtually no way of knowing what worked and what didn’t. If you want to target male and female desktop users, ages 18 to 45, who are interested in travel, pop music and 20 other potential interests, but you throw them all into one giant bucket, your campaign will end up being a wash. Your ads may deliver, but you won’t glean any meaningful insights to help you with media planning in the future. You need to divide the water among several buckets in order to take a closer look at each drop.

I’ve seen brands, gaming and otherwise, hold tight to the notion of who they think their audience is. But once they let go a little and put their trust in testing, they begin to reach new people and see much better results.

To put it like a true marketer, you can’t manage what you can’t measure. Thus, stereotypes have no home in ad targeting.

About the Author

Jason Nesbitt is VP of Media & Agency Operations at Strike Social, a global company that harnesses the power of AI to help advertisers succeed in paid social. With teams based in Chicago, Kraków and Manila, Jason oversees a global network of media buyers who manage 15,000+ campaigns every day for the world’s leading agencies and brands, including Xbox, Nexon and Capcom. Jason holds an MS in Advertising from the University of Illinois and a Bachelor’s in Strategic Communications, Advertising and Communications Studies from the University of Minnesota. He was also once asked to play Halo 2 professionally.

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