In-game advertising
How  Company X can adopt an effective in-game
advertising strategy for their  product Y based on
consumers goals
Management summary
 Company X , subsidiary of Unilever and producer of s, is looking for new channels to
advertise their  product Y . We were asked to conduct research on this new channel and
investigate the advertising opportunities of the channel to attract new customers for
 Company X . Further,  Company X would like to know what advertising strategy best
suites their brand.
Both the number of gamers and the spending on in-game advertising are growing. Early
adopters already had their first acquaintance with in-game advertising. Due to new
technologies dynamic in-game ads pose a new opportunity for advertisers to pay for ads
within the game, over a period of time, which can coincide with their actual real-life
campaigns. Measurement services that track gameplay and in-game advertising to give
an analysis of videogame consumption, have already been developed.
Video games are quickly becoming the most effective medium for reaching consumers
via product integration; it may generate the best consumer recall, awareness and calls to
action, such as purchasing or recommending the product. Results also showed that
players do not mind in-game product placements.
The central research question is: How can  Company X adopt an effective in-game
advertising strategy for their  product Y based on consumers goals? A first specific
objective is to gain insight in the consumers goals when consuming  product Y . Second,
the aim is to search for the underlying values that drive this consumption of  Z through
means-end chain theory. Third, the objective is to present recommendations for the
marketing communication through the application of the MECCAS model.
Given the research objective, a qualitative or exploratory research is conducted. The
methodology relies on the means-end chain approach with data being collected through
laddering interviews. Based on the analysis of the strongest means-end chains and the
list of consumers statements related to attributes, consequences and values, a
MECCAS representation for  product Y will be elaborated.
Introduction
 Company X , subsidiary of Unilever and producer of s, is looking for new channels to
advertise their  product Y . There is a special interest in games, mainly to get in direct
contact with young consumers (15-30 years). This target group is seen by  Company X
as the most promising audience for future sales. The purpose is to increase the sales of
 product Y through in-game advertising.
We were asked to conduct research on this new channel and investigate the advertising
opportunities of the channel to attract new customers for  Company X . Further,
 Company X would like to know what advertising strategy best suites their brand.
First, this study gives an overview of the game industry, in-game advertising and their
recent developments and trends. Second, a model for consumer choice behaviour is
presented. Finally, an advertising strategy model based on consumer behaviour is used
to present recommendations for the  product Y branded marketing communication
activities.
Based on the research,  Company X should gain more insight to the opportunities of in-
game advertising based on consumer choice behaviour when buying  product Y . The
research should help  Company X to decide whether in-game advertising can be part of
the advertising strategy for  product Y .
1. In-game advertising
There are at least 112 million gamers 13 years and older in the United States alone,
says a Yankee Group report, and the number will grow to 148 million by the end of 2008
(Shields, 2005). Video games have a track record of delivering significant audience,
which includes some of advertising's most coveted consumers - men aged 18 to 34.
According to ratings giant Nielsen, young men play an average of 12.5 hours of
videogames each week (Ramirez, 2006). However gamers are a far more diverse lot
than that oft-cited stereotype with women coming on strong, accounting for 25 percent of
console participation in the U.S. The female representation is even greater in some
international markets. In China the gainer gender breakdown is about 50-50 among
teens and young adults (Goldrich, 2006). Gamers can be thought leaders when it comes
to technology and new trends. And they have money to spend (Murphy, 2006).
Types of in-game advertising
Essentially there are three types of ads that run in games. The first, most basic
execution, is ambient advertising. It consists mainly of hoardings, billboards and
traditional signage placed throughout a game - for example, on the sides of buildings in
a motorsport game. Another format taking hold is advergaming, in which agencies or
game developers create short, simple games that revolve around the brand, and create
an 'entertaining' environment for the consumer. But the third, most interesting format, is
dynamic advertising. Associated with games that have online network connectivity,
brands can pay for ads within the game, over a period of time, which can coincide with
their actual real-life campaigns (Murphy, 2006).
Early adopters of in-game advertising
Growing number of companies are putting their product placements in video games
(Bannan, 2002). Companies like Coca-Cola, Paramount and DaimlerChrysler advertise
in the videogame Splinter Cell: Chaos Theory where the secret agents encounter Sprite
machines, film promotions and billboards with Jeep trucks (Shields, 2005; Ramirez,
2006). DreamWorks plans to employ in-game advertising to promote its coming
animated film,  Flushed Away (O Malley, 2006). And T-Mobile UK even committed a six-
figure budget to an in-game ad campaign (New Media Age, 2006).
In-game advertising spending
Spending on in-game advertising and product placement amounted to $56 million last
year. Thanks to new ad-serving technology, next-generation gaming consoles and new
metrics to measure both, spending will reach $730 million by 2010, according to
research firm Yankee Group (O Malley, 2006; Ramirez, 2006). One reason for the
projected jump in spending: new tools that could make advertisements in games more
effective by tailoring them to players' ages or locations, or even the time of day that a
game is played (Hershman, 2005).
New technologies
In-game ads have been around for nearly 20 years, but two problems kept the market
from growing very large. Before 2005, ads were "static," meaning they were built into the
code when the game left the factory and couldn't be changed or updated. Game makers
were missing out on at least 50 percent of ad dollars that came from time-sensitive
promotions for products like new movie releases. The second problem was metrics. How
would advertisers know if a gamer ever proceeded to level 10 and actually saw the ad
they had paid for? (Ramirez, 2006).
Both problems are now being solved. Next-generation consoles like the Xbox 360 and
the PS3 are built from the ground up for broadband support, making dynamic ads just as
viable as they already were on Net-connected PCs (Ramirez, 2006). Massive, an
advertising agency specialized in in-game advertising, has developed software for
serving dynamic ads (Adformatie, 2006). The consoles internet link lets Massive's
software modify ads as players progress through game (Richtel, 2005).
Nielsen announced a new videogame-measurement service that will track gameplay and
in-game advertising to give an analysis of videogame consumption (Ramirez, 2006).
This new all-electronic ratings service, Nielsen GamePlay Metrics, will establish new
metrics for the buying and selling of advertising in video games (Gaudiosi, 2006).
DoubleFusion takes the technology even further, presenting advertisements as video,
audio, and 3-dimensional objects woven seamlessly into games' virtual worlds. A player
driving around a racetrack might pass a billboard advertising Tom Cruise's latest movie,
hear Metallica's new single, or get extra points for driving over a Pirelli tire (Hershman,
2005).
Gaming and consumer behaviour
Nielsen Entertainment reports that video games are quickly becoming the most effective
medium for reaching consumers via product integration. The study found that product
integration in video games may generate the best consumer recall, awareness and calls
to action, such as purchasing or recommending the product (McClellan, 2005). Results
also showed that players do not mind in-game product placements (Hein, 2005). They
are choosing to play these games, so its imperative the advertising does not detract from
this experience (Murphy, 2006).
According to its supporters, game advertising can provide hours of interaction between
the brand and the consumer. Advertisers can use this medium to drive 10 or 15 minute
experiences. For example, imagine a game where you can order a pizza in-game, and it
arrives at your door 20 minutes later (Murphy, 2006).
2. Conceptual framework
To investigate the opportunities for  Company X to add  product Y advertisements in
games, we first have to know what the underlying mechanism of consumer choice
behaviour is. Consumers pursue certain goals when they are consuming  product Y s.
These goals are investigated through means-end chain theory. Finally, the MECCAS
model ( Means-ends Conceptualization of the Components of Advertising Strategy ) is
used for advertising message development.
Means-end chains as goal hierarchies
Goals are pleasant consequences (end states or otherwise) to be desired or unpleasant
consequences to be avoided (Winell, 1987). Goals are organized in hierarchies to
facilitate their accomplishment (Gutman, 1997). Lower-level goals (subgoals) are
subordinate to higher-level goals (Bandura, 1988; Beach, 1990) and serve as means to
achieve higher-level goals (Bettman, 1979; Newell and Simon, 1972). This means that
satisfying lower-level goals helps in achieving higher-level goals. Higher-level goals
represent the deep layer of consumer motivation (Pieters, Baumgartner and Allen, 1995;
Reynolds and Gutman, 1988). Goals are the essential regulators of consumer choice
behaviour and influence both the direction of and the intensity of behaviour (Carver and
Scheier, 1981).
Thus, goals provide the primary motivating and directing factor for consumer behaviour.
Consumer choice can be regarded as a person s movement through a goal hierarchy
(Bettman, 1979). The elements in a means-end chain  attributes, consequences and
values  can be considered to be elements in a goal hierarchy. The goal hierarchy final
goal can be at the personal values level. When the final goal is at this values level,
relevant attributes and desired consequences are the goal hierarchy s subgoals. Thus, a
means-end chain can be conceptualized as a goal hierarchy with product goals at lower
levels linked to important goals at higher levels (Gutman, 1997).
This conceptualization of consumer goal hierarchies bears close resemblance to the
notion of means-end chain structures of consumers product knowledge (Gutman, 1982;
Olson and Reynolds, 1983). The objective of means-end theory is to understand what
makes products personally relevant to consumers by modeling the perceived
relationships between a product (defined as a collection of attributes) and a consumer
(regarded as a holder of values) (Pieters, Baumgartner and Allen, 1995). It proposes that
consumer product knowledge is hierarchically organized, spanning different levels of
abstraction (Howard, 1977; Gutman, 1982).
Means-end theory treats attributes, consequences and values as basic content of
consumer product knowledge stored in memory. Attributes are features or aspects of the
product or brand. The personal consequences associated with an attribute provide the
personal meaning of that attribute to the consumer. Consequences represent the
reasons why an attribute is important to someone and why it is positively or negatively
valenced (Reynolds, Gengler and Howard, 1995). Consequences acquire meaning
because they are seen as instrumental in achieving values central to the self. In this
sense, product attributes are the  means by which a consumer is able to achieve the
desired  end state of existence associated with value satisfaction. Values are assumed
to provide the motivation for choosing a product with certain attributes, and the aim is to
relate product attributes to the self via consequences of product use (Walker and Olson,
1991). Self-relevant and desirable product meanings are presumed to be the basis for
consumer preferences and choice (Gutman, 1982; Claeys, Swinnen and Van den
Abeele 1995).
MECCAS advertising model
Building on the means-end chain theory, Reynolds and Gutman (1984) have proposed
the  means-end conceptualization of the components of advertising strategy or
MECCAS model. This model offers a framework to integrate the consumers perceptual
orientation (including the personal motivations embedded in the means-end chains) with
the current strategic positioning of a product (Vanoppen, Verbeke and Van
Huylenbroeck, 2002). The MECCAS model comprises elements of the advertising
strategy corresponding with each level of the means-end chain. In order to be effective,
the ad s content elements should link message elements (describing product attributes)
to consumer benefits and the more abstract consequences. The ad s content that
evokes these psychological consequences is crucial in activating the consumers
motivational network, hence the term  leverage point . If it works, the audience is brought
to  closure and eventually to the decision to buy (Vanoppen, Verbeke and Van
Huylenbroeck, 2002).
The MECCAS model recommends that an advertising message must (Bech-Larsen,
2001): a) be based on the message-relevant knowledge (cognitive structure) of the
recipients, b) create or enforce a full means-end chain in the minds of the recipients, ie.
a cognitive chain that contains product attributes and consequences as well as personal
values, and c) anchor this means-end chain to the object (ie. product, brand) of the
message by exercising creative talent in the design of the linkage strategy and the
executional framework.
The following table presents and defines the various levels of the MECCAS model. The
driving force is the consumer value or end-level that the advertising strategy focuses on.
Every other level is geared toward achieving the end-level (Shimp, 1993).
Level Definition
Driving force The value orientation of the strategy; the end-level to be focused on in the
advertising
Leverage point The manner by which the advertising will  tap into , reach, or activate the
value or end-level of focus; the specific key way in which the value is linked
to the specific features in the advertising
Executional framework The overall scenario or action plot, plus the details of the advertising
execution. The executional framework provides the  vehicle by which the
value orientation is to be communicated; especially the Gestalt of the
advertisement; the overall tone and style
Consumer benefit The major positive consequences for the consumer that are to be explicitly
communicated, verbally or visually, in the advertising
Message elements The specific attributes or features about the product that are communicated
verbally or visually
Table 1: Percy and Woodside (1983) in Shimp (1993)
In conclusion, the important point to remember about the MECCAS approach is that it
provides a systematic procedure for linking the advertiser s perspective (the possession
of brand attributes and consequences) with the consumer s perspective (the pursuit of
products to achieve desired end states, or values). Effective advertising does not focus
on product attributes/consequences per se; rather, it is directed at showing how the
advertised brand will benefit the consumer and enable him of her to achieve what he or
she most desires in life (Shimp, 1993).
3. Research objectives
The overall objective of this case study is to conduct research on the opportunities for
 Company X for placing  product Y advertisements in games based on the goals
consumers pursue. The central research question is:
How can  Company X adopt an effective in-game advertising strategy for their  product
Y based on consumers goals?
A first specific objective is to gain insight in the consumers goals when consuming
 product Y s. Second, the aim is to search for the underlying values that drive this
consumption of s through means-end chain theory. Third, the objective is to present
recommendations for the marketing communication through the application of the
MECCAS model.
4. Research methodology
The case at hand includes the assessment of features in combination with specific
product attributes as antecedents to consequences and values that consumers strive for.
Given the research objective, a qualitative or exploratory research is conducted. The
methodology relies on the means-end chain approach with data being collected through
laddering interviews. Laddering refers to an in-depth, one-on-one interviewing technique
used to develop an understanding of how consumers translate the attributes of products
into meaningful associations with respect to self, following Means-End Theory (Reynolds
and Gutman, 1988). Laddering is a frequently used approach for eliciting means-end
chains and is used to derive aggregate value chains - i.e., prototypical sequences of
attributes, consequences, and values for a sample of consumers (Pieters, Baumgartner
and Allen,1995). In a laddering interview, subjects are first asked to identify salient
attributes that distinguish choice alternatives in a product class. Next, they are prompted
to verbalize sequences of attributes, consequences and values, creating a chain of
elements with each element being directly linked to the element adjacent to it (Gutman,
1997).
The laddering interviews will be conducted one-on-one in an in-depth format, gathering
information through 40 personal laddering interviews. All respondents should be
experienced gamers. Attention will be paid to obtaining a sample with a wide diversity of
socio-demographic characteristics.
Using the Laddermap software (Gengler, 1997; Reynolds, Gengler and Howard, 1995),
each ladder recorded during the interviews will be encoded, whereby each statement will
be labeled as attribute, consequence or value. The software counts the number of links
between the encoded concepts and visualizes them in an implication matrix (showing
how frequently each concept implies another one). This implication matrix forms the
basis for drawing hierarchical value maps (Reynolds and Gutman, 1988; Vanoppen,
Verbeke and Van Huylenbroeck, 2002). Hierarchical value maps or consumer decision
maps (Reynolds, Westberg and Olson 1994) show the salient linkages between
attributes, consequences and values. The map indicates which values make products
personally relevant, and this information is useful in developing advertising strategies
(Reynolds and Craddock, 1988; Reynolds and Gutman, 1984; Reynolds, Westberg and
Olson 1994).
Based on the analysis of the strongest means-end chains and the list of consumers
statements related to attributes, consequences and Values, a MECCAS representation
for  product Y s will be elaborated.
5. Planning and budget
We are able to conduct this research in a period of 13 days. The specific planning will be
preparation (3 days), interviews (2 days), analysis (5 days) and conclusions /
recommendations (3 days).
The budget for the study will be: 13 days * 8 hrs. * Ź 100,- = Ź 10400,-
6. Conclusion
This preliminary study shows that there still is a lot of research to be done on effective
advertising in games. We are convinced that the results of the proposed research will be
able to give  Company X more insight to the opportunities of in-game advertising based
on consumers goals and corresponding values. The research will help  Company X to
decide whether to adopt games as a new channel for advertising. Therefore,
recommendations on how to create an effective advertising message, given the
technological possibilities at present, are made to support marketing communications.
We would like to thank you for the opportunity to write this research proposal. We look
forward to continue the cooperation with  Company X .
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