The launch of Microsoft's Xbox 360 kick-starts the next phase of in-game advertising with online capabilities that enable marketers to continually update ads in real time - - on a daily, even hourly, basis. In a very short period of time, in-game ads have evolved into a viable, highly effective platform for the ad industry. Not to be confused with advergaming - - a form of promotion-driven video game production, in-game advertising has the distinct advantage of enhancing the reality of gameplay.

Mediaedge:cia examines how in-game advertising can best be used to create meaningful relationships between brands and consumers in "Playing with Brands," a new study commissioned from Telenation and designed to help advertisers better understand the optimum role for their brands within computer and video games.

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The study looked at:

· How gaming offers the opportunity to connect with a traditionally hard-to-reach young, affluent male audience

· How to design an ad so that it's perceived as a natural part of the game, enhancing its alternate reality as well as the escapism that gamers seek

· Understanding how to choose just the right moment in a game to do that

· How to integrate the brand's presence so that it boosts the alternate reality experience without interrupting or altering gameplay

Other talking points include:

· Gaming's great benefit for brand communication due to its intense consumer involvement

· Video games, with their growing popularity in all sectors, have increasingly proven to be an effective medium for advertising messages

· With the recent advent of technologies that allow audiences to skip television ads, games have become an even more powerful vehicle for the advertising industry

· Advergames - games designed around a particular product or brand - are rarely well-received by gamers

Said the study: "The optimum role for a brand is to enhance a game's alternate reality which ultimately promotes the "escapism" that gamers seek.

One of the strengths of this medium is that when in-game placements are done well, these placements don't actually feel like advertising as gamers perceive them as a natural or expected part of the game.

Gaming offers the opportunity to connect with a traditionally hard-to-reach audience - young affluent males. Among U.S. gamers, game-playing is the fourth-most frequented "contact point" after television, surfing the internet and listening to music. The dramatic growth in on-line gaming enables constant refreshment of in-game placements, allowing brands to synchronize virtual communication with real-world campaigns. Brand-owners, however, should be wary of merely transferring real-world methods into game-worlds.

For genuine active engagement, brand-owners must consider exactly where and how their individual brands have permission to use an individual game for communication. Gamers "give permission" only for relevant involvements.

All games, in theory, are possible venues for brand placement. Brand communication, however, should be tailored to its exact position in or around a game."

The gaming market and the communication opportunities it offers are growing dramatically. The global video game market is predicted to more than double in the next five years, as the chart shows:

Global Video Game Market By Region Annual Revenue Outlook U.S. $(millions)
Region	2004	2009
Asia/Pacific	10,086	23,087
U.S.	8,198	15,067
EMEA	5,980	14,312
Canada	611	1,307
Latin America	531	832
Global Market	25,406	54,605
Chart One  (Source: PWC, Global Entertainment and Media Outlook: 2005-2009)

Monday: Advertisers spending in the U.S. reflects a strong market