Video games are clearly the entertainment medium that has experienced the fastest growth over recent years. It is estimated that hundreds of millions of people from all over the world prefer video games over traditional media as the entertainment media of choice. Marketers seeking to reach the 18-34 demographic found that videogames are one of the most powerful and efficient advertising platforms. Taking advantage of this huge opportunity has led to what we now call in-game advertising.

In game advertising refers to the delivery of advertising through video games. Both the game industry and the advertising industry can benefit tremendously from in-game advertising. Those in the game industry cannot overlook the new stream of revenue that in-game advertising offers. In-game advertising provides a very effective way to reach the 18-34 demographic. Statistics show that most men in that age group tend to favor video games over television.

There are two types of in-game advertising: static and dynamic. Dynamic in-game advertising means that the advertisements can be integrated in the video game even after the video game has been published. Although this particular type of in-game advertising has some advantages, it does have its shortcomings and limitations. Probably the most notable one shortcoming is that the dynamic in-game advertising requires a live internet connection. This rules out the possibility of reaching those gamers that do not have their game console connected to the internet. Static in game advertising, however, does not depend on internet connectivity or high bandwidth to work, because in static in-game advertisement the ads are hard-coded into the video game before it is published.

Static in-game advertisements are permanent integrated into the game. Static in-game advertising comes with the advantage of allowing both developers and advertisers to create ads that are more tied to the game storyline. Static in-game advertising allows more meaningful and elaborate brand integrations, while being more relevant to both the game story and the player.

All in all, since both advertisers and the game industry have something to gain from in game advertising. However, it is critically important that the ad integration is done appropriately as not to degrade the quality of the game. The game industry perceives in-game advertising as a promising stream of revenue and advertisers see it as a promising way to engage the hard-to-reach 18-34 demographic.