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IN-GAME ADVERTISEMENTS ARE GAINING MOMENTUM

Second of two-part series on the growing use of product plugs and real ads in video games.

Video games are stealing eyeballs from television and other media. TV viewership among men aged 18 to 34 declined by about 12 percent last year while that group spent 20 percent more time on games, according to Nielsen Media Research.

Product placement and advertisement plugs reflect a growing business reality in the industry.

Massive Inc. is launching what is believed to be a first-of-its-kind video game advertising network, allowing marketers to deliver new ads into console and PC games via an online connection.

"It's been like the wild wild West up until this point," said Jay Cohen, a vice president at game publisher Ubisoft Entertainment Inc. "But now it's coming to a critical mass -- advertisers keep coming to us saying, 'We want in. How much is it going to cost?' Without those (advertising) metrics, we can't go about it successfully or fairly."

That's why Ubisoft plans to use Massive's technology in the next sequel of the popular Tom Clancy "Splinter Cell" series, due out in March.

The ability to change the ads in the game is compelling, Cohen said. The main character, Sam Fisher, will have to pass certain city locations during different periods, and it's realistic that a billboard may have changed over time, and it helps show that the day and time may have changed in the story, he said.

Capitalizing on the same advertising trend, Nielsen Entertainment is working with game publisher Activision Inc. to start a game-rating service similar to its existing TV-ratings system.

"It's a natural progression for the gaming industry to create standardized metrics to help everybody know the value of ads in games," said Matt Tatham, a Nielsen Entertainment spokesman.

In-game advertising has gained momentum in the past two years because traditional television and print ads are becoming less effective, said Wim Stocks, executive vice president of sales and marketing at Atari Inc., a game company that recently doubled its staff to four to handle product placements.

Advertising now shows up everywhere, most notably in blockbuster titles. There's a Samsung cell phone in "Enter the Matrix," a Palm PDA in "Splinter Cell," and Old Spice sponsors the half-time show in "NCAA Football 2005."

Electronics Arts Inc., the world's largest video game publisher, says its ad revenues are up 60 percent this year.

Mitchell Davis, chief executive at Massive, developed the concept for real-time advertising in games more than two years ago after playing "Grand Theft Auto." "It was all fake advertising in the game, and I thought, 'It should be real.' "

If Massive's technology and service works as promised, taking ads to a dynamic new level, then Ubisoft and other game makers say in-game ads will inevitably mushroom and become a standard marketing method.

"This will be woven into every major game company's plans moving forward, but it's really only going to work in games where it makes sense," said Ed Zobrist, vice president of global marketing at Vivendi Universal Games.

Next year, Vivendi plans to introduce four games using Massive's advertising service.

Vivendi has turned away some anxious advertisers in the past -- alcohol companies that wanted to be in the new "Leisure Suit Larry" game, and shoe companies that wanted fantasy characters to wear their treads.

"Real world brands just do not have a place in a fantasy game," Zobrist said.

-- Associated Press