Advertising in Games: Opportunities, Formats, and Effective Strategies for Brands

With the right strategy, in-game advertising can become a powerful tool for engaging today’s gaming audience.

Video games aren’t just entertainment — they can also be a source of revenue for savvy advertisers looking to connect with one of the most valuable and hard-to-reach consumer segments.

In-game ads are naturally integrated into the gaming environment. For example, they might appear as virtual billboards along a racetrack or branded items players can purchase within the game. This format is far more effective — and far less annoying — than traditional banners or pop-ups in mobile apps.

With nearly 3 billion gamers worldwide, in-game advertising offers brands tremendous potential for audience reach. From digital billboards to interactive branded events, video games have become an ideal environment for marketers aiming to capture players’ attention.

This guide introduces the basics of in-game advertising: popular formats, targeting capabilities, costs, challenges, and best practices

Types of in-game advertising

Before diving into how to use in-game advertising, it’s important to understand the main ad formats.

Static in-game advertising
This type of advertising is hardcoded into the game itself. Since the ad can’t be changed after the game is released, it tends to be expensive and usually comes with a flat-rate pricing model.

Dynamic in-game advertising
Unlike static ads, dynamic ads can be updated in real time. They appear in various formats — most commonly as videos or banners. A notable example is Barack Obama’s campaign billboards in Need for Speed: Carbon in 2008.

Sponsored game content
This format involves integrating a brand or product directly into the game’s content. It helps make the brand more visible and engaging for players.

For instance, KFC partnered with Nintendo to create a virtual KFC-themed island in Animal Crossing: New Horizons, where players could even win a real chicken voucher.

Advergames
These are games developed specifically to promote a brand or product. It’s an interactive and entertaining way to build brand awareness and boost loyalty.

One of the earliest examples is Chex Quest, a game created by the Chex cereal brand. It was a family-friendly adaptation of the popular Doom game and was distributed as a freebie inside cereal boxes — gaining a cult following.

Today, companies like Activision Blizzard Media develop dedicated branded mobile games, known as playables.

Product placement in games
This classic advertising method still works: a product is added to the game so players can see it or even “use” it.

For example, in Mario Kart 8 on Nintendo Wii, players could unlock Mercedes-Benz cars — making them especially desirable, since they had to be earned.

Targeting opportunities in in-game advertising

One of the main advantages of in-game advertising is its advanced targeting capabilities. It all begins with selecting the appropriate game or several games. Advertisers can target users based on demographic factors, geolocation, device type, or platform.

The effectiveness of the ad increases even further when classic targeting is combined with behavioral targeting.

Behavioral targeting is based on the player’s actions (or lack thereof). For example, ads can be directed at players who have already made in-game purchases, indicating their willingness to spend money. Alternatively, ads can target players who have reached a certain level and show high engagement.

Combining different targeting approaches and placing ads in games across multiple platforms—consoles, PCs, and smartphones—makes this tool incredibly powerful. Thanks to broad reach and precise targeting, brands can effectively enhance brand awareness, engage audiences, and drive sales.

How to purchase in-game advertising

Getting started with in-game advertising primarily depends on which games you want to advertise in and your budget.

When planning placements, it’s important to consider your campaign goals, target audience, and financial capacity. There are several main ways to buy in-game ads:

Direct collaboration with game publishers
Example: Activision Blizzard Media
You can work directly with game developers or publishers to create custom advertising campaigns. This approach provides more control over the creative and targeting aspects and allows for deeper brand integration into the gameplay.

However, this option is more expensive, requires more time for negotiations, and is usually limited to just one game, which reduces reach.

Ad networks for games
Examples: Admix, Unity Ads
These networks connect brands with multiple publishers, providing access to a wide range of games. They allow for quick scaling, offer competitive pricing, and good targeting tools.

The downside is less control over where and how your ads will appear. Additionally, not all networks have a high level of quality or precise targeting settings.

Programmatic platforms
Examples: Bidstack, Anzu
These services automate the buying and placement of ads using data and algorithms. They enable campaigns to run across multiple platforms and a large number of games, offering efficiency and flexible behavioral targeting options.

Drawbacks include less influence over the creative and placement of ads, as well as the need for technical knowledge or experience.

Cost of In-Game Advertising

How much does in-game advertising cost? There is no straightforward answer — the price depends on many factors and will likely continue to rise in the future.

The cost of advertising is determined by the type of game, the ad format, targeting parameters, and the scale of the advertising campaign.

The most common model is cost per thousand impressions (CPM). On average, the cost for 1,000 impressions for banner ads in games is $10–20, while for video ads, it’s $15–30.

However, these numbers fluctuate significantly depending on the format, audience, specific game, and targeting. For example, according to the Interactive Advertising Bureau (IAB) research, ads targeting Generation Z and millennials were 30–50% more expensive than campaigns targeting Generation X or baby boomers.

With the growing popularity of video games and the desire of brands to reach the hard-to-reach gamer audience, the cost of in-game advertising is likely to continue to rise. In some cases (such as with static ads or advergame games), a fixed-rate model is used instead of CPM.

Challenges and Best Practices

Everything seems fun and effective until your campaign stops delivering results. In-game advertising comes with its own unique challenges — ad fatigue is a real issue.

Players quickly lose interest or start to get annoyed if they keep seeing the same ads. To avoid this, you should closely monitor the frequency of impressions and regularly update creatives.

Another important point is to avoid being intrusive. If ads interfere with gameplay, distract, or ruin the gaming experience, it could lead to a negative reaction. While such situations are rare, they should be anticipated.

As with any advertising campaign, targeting is crucial. Use unobtrusive ad formats that naturally integrate into the gameplay. If possible, offer rewards to users — such as in-game currency, items, or exclusive content. This increases engagement and has a positive impact on brand perception. The example of unlocking Mercedes-Benz cars in Mario Kart is a great illustration of how this works.

This article available in Ukrainian.