IAB study: Gaming accounts for less than 5% of ad spending

The popularity of gaming is growing, but ad spend is not keeping up according to a new study from the Interactive Advertising Bureau (IAB) and MediaScience. The qualitative study interviewed over 40 brands, agencies, ad tech companies, game developers, and publishers found that less than 5% of ad budgets in the U.S. are spent on gaming activations.

The IAB investigated why this might be the case. The firm concluded that five lingering misconceptions about the gaming industry stifled spending. Many buyers assumed game advertising was much less affordable, scalable or measurable than it can be. Other concerns included brand safety and limited use outside of building brand awareness. The IAB includes strategies and examples to counter these misconceptions.

“The success stories we heard from buyers about gaming were striking — and all the more so because they don’t align at all with the misperceptions of the industry at large,” said Zoe Soon, vice president of experience center at IAB. “Advertisers are missing a prime opportunity to reach and persuade consumers in these dynamic environments.”

In addition to tools to address these misconceptions, the report lays out the next steps to help grow gaming advertising budgets. IAB emphasizes demonstrating the unique value of gaming, building interoperability and supporting further research.

“High-quality audiences at serious scale, brand safety, easy buying, and defensible measurement are all finally in place. As the misperceptions dissipate, we expect spending on in-game advertising will begin to catch up to the opportunity,” said Jack Koch, senior vice president for research & insights at IAB.

The IAB’s full report on in-game advertising can be found here.