Video Game Marketing: Breaking The Stalemate

Video game marketing:
breaking the stalemate
Strategies for video-game brands to

overcome the limits on reaching their
audience efficiently and at scale
Copyright © 2017 Xaxis Inc.

Video game marketing: breaking the stalemate 2
A different approach to video game marketing
In 2015 the global video game industry grew by 8.5%, to a value of $99.6 billion. To put that in context,
in the same year the movie industry earned just $38 billion[2]. Games aren’t just for geeks any more,
they’re bigger than Hollywood. For advertisers, this is a massive opportunity. To be relevant, we need
to work collaboratively with game publishers to help the industry adapt to a changing market. The
number of games being released is growing explosively. For instance, in 2016, the number of games
released for Windows increased by 43%. For Xbox, the increase was 7%, for PlayStation 6%, and for
Mac 13%. For iOS, more than 600 games were released every day[3]. In such a crowded market, how
can games publishers cut through and reach their audience?
At Xaxis, we partner with our sister agencies in GroupM to help them and their gaming-publisher
clients take a new approach to games marketing. By unlocking the value in the data they already
have, publishers can scale their audiences to address a greater number of potential customers,
across a broader range of sites, throughout the entire sales journey. They can do it in a way that
generates valuable insights into their audience, which can then be used to inform and optimise the
full spectrum of marketing activities.
In this whitepaper, we outline how game publishers can do this and the benefits they can expect
to see. Gaming is a very exciting industry and we’re extremely pleased to share our insights in this
whitepaper. We hope you find it useful.
John Wittesaele
President, Xaxis EMEA

The challenge: a crowded, cross-channel market
The explosive growth in demand for games and the corresponding growth in the size of the
industry, is great news for the games publishers. But it’s making life complicated for their marketing
departments. With so many games being released, through so many different channels, it’s often
a struggle to identify the right audience for a specific game. Once you’ve selected your ideal
customer group, it’s an even steeper challenge to rise above the background noise to get your
release the attention it needs.
This is particularly true in a multi-device, multi-channel environment. Not only do gaming publishers
need to get their release a greater share of attention than its competitors; they need to make sure
they are reaching exactly the right audience, with the right message, at the right point in the
customer journey. Many publishers still struggle with cross-device audience identification and with
reading the buying signals well enough to know which device to target and when.
“ More games than ever are being released each week on

PC, digital console and mobile. But awareness and spend
are relatively stable, finite amounts at this point. So, the
challenge of cutting through the noise and generating
awareness is increasingly important for teams without
an established audience.
Phil Elliott, Director of Community & Indie Development at Square Enix.

“The market is definitely more crowded than ever before,” says Joe Martin, a writer and content
consultant who has worked for many of the industry’s studios and specialist game press, including
Nintendo, Preliminary Games, Future Publishing and Custom PC Magazine. “This is down to two
main reasons: first the greater accessibility of tools and resources for making games, second the
fact that digital distribution has enabled independent developers to compete on a more level
playing field than ever with the major studios.”
Phil Elliot, Director of Community & Indie Development at Square Enix, agrees. “More games than
ever are being released each week on PC, digital console and mobile. But awareness and spend
are relatively stable, finite amounts at this point. So, the challenge of cutting through the noise
and generating awareness is increasingly important for teams without an established audience.”
Europe,
Middle-East
& Africa
North America
26%
22%
The global games TOTAL
market 2017
$91.5 billion
4%
Latin America Asia-Pacific

47%

Current State Of Market
The big established publishers (AAAs) and the indies (smaller and more independent publishers)
each face their own unique challenges. The industry giants increasingly find themselves faced
vwith development costs of around $50 million per game. A really big release, such as Grand
Theft Auto V or Tom Clancy’s The Division can cost up to $200 million. Making back that kind of
budget instantly puts pressure on the marketing team.
Released in April 2016, Tom Clancy's The Division

was one of the big-budget releases which initially
struggled to find mass acceptance.

Unfortunately, it’s been a rocky year or two for big-budget games. Big titles such as Watch Dogs
2 and Titanfall 2 didn’t sell as well as their developers had hoped. With so much happening in the
market, it’s been hard for the big titles (no matter how good their actual gameplay) to escape the
impression that gamers have “been there and done that”.
Indie games, on the other hand, often have a limited marketing budget. The studios developing
them have been innovative in using traditional lead-generation and permission-marketing
techniques. Nevertheless, it’s often difficult for them to differentiate themselves from the many
other games released at the same time.
With the rapid decline in the importance of high-street retail as a channel and the rise of digital
downloads, it’s more important than ever for both indies and AAAs to be able to effectively find
and address the right audience for each games release.
Global video game ad spend
6
Spend In Billions ($)
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year
Source: https://www.statista.com/statistics/238140/global-video-games-advertising-revenue

Games marketing in a multi-device age
Gamers are more diverse than ever. According to the 2016 Entertainment Software Association
survey of US gamers, 41% of gamers are women whose average age is 44[5]. However, this statistic
masks some important distinctions. Men make up the greater proportion of PC and console gamers,
but women, according to a recent study, make up 63% of mobile gamers. In some mobile-game
categories, that rises to 70%[6].
Men
make
up the greater
proportion of
PC and console
gamers
Women
make up 63%
of mobile
gamers

As before, this presents games publishers with opportunities, specifically the chance to broaden
out into new markets and demographics. However, there are also challenges, the most obvious
of which is how to address new demographics; how to understand these new users’ habits,
preferences and online behaviours. This is made even more complex, by the need to address these
users across a range of devices, platforms, and media.
As part of its work in defining an audience, Xaxis creates an anonymous single identifier for each
consumer in an advertiser’s defined audience. The user’s behaviour and interactions with the brand
and a given campaign, can be viewed, conversions attributed and future behaviour predicted.
Using this method, Xaxis can help effectively engage with tightly defined, and constantly refined,
audience segments, across all platforms, channels, and media.

Video-game marketing is ready for innovation
Gaming marketers have not been slow to adapt
to challenges. An important tactic, has been
the increasing use of influencers. Influencers
are usually the owners of popular Twitch
and YouTube channels, are often teenagers

themselves who command huge audiences
among the relevant demographics. The rise
of influencer marketing is hardly surprising:
according to Google, 90% of gamers watch a
YouTube gaming channel at least once a week
and 64% will download a game after seeing it
on YouTube[7].
90% of gamers watch

a YouTube gaming
channel at least once
a week and 64% will
download a game after
seeing it on YouTube[7].

“Games marketing has evolved” says Phil Elliot. “Where banner ads were once prevalent, as games
media influence has made way for social networks and content creators on YouTube and Twitch,
marketing investments have also become more diverse.”
But there are downsides. Relying heavily on influencers can limit your ability to gather data about
your audience. The influencer themselves owns the relationship with his or her viewers and most
content platforms restrict the type and quantity of data which advertisers can gather. Many
games publishers also take an old-school approach to media buying and continue to purchase
inventory by site, prioritising publishers with gaming content, rather than by audience profiles.
This guarantees relevance but is
Games marketing has expensive. Relying solely on media
buying through insertion orders limits

evolved. Where banner the scale and reach of the campaign
ads were once prevalent, and the opportunities for re-engaging
as games media influence with consumers. Based on Xaxis’
experience working with GroupM

has made way for social agencies and their clients from the
networks and content games industry, we believe there’s a
creators… marketing better way.
investments have also

become more diverse.
Phil Elliot, Games writer & content consultant for
Nintendo, Preliminary Games, Future Publishing
& Custom PC Magazine.

How major games publishers can work their data harder
In 2016, Xaxis worked with a leading games publisher on one of the year’s biggest releases. The
publisher was about to launch a major new instalment in an existing franchise but was concerned
that it would meet the same lukewarm audience reaction as many other 2016 games. In a combined
effort, Xaxis ensured that didn’t happen. To be a success, the launch video campaign had to achieve
a video completion rate (VCR) of 75% with a 30-second pre-roll ad.
We quickly recognised the game franchise had a very large and active online community. Profiling
and using the gamer-community’s online habits could act as a guide to identifying the most
relevant audiences for the next release. With 9 weeks to launch, the first plan of action was to
carefully measure the online habits of over 2 million users of the brand’s customers across six
markets to construct the most relevant audience for the launch video.
The findings were very interesting. For instance, we discovered that the average British and
Italian gamer was younger than their Spanish counterpart. Youngest of all however — somewhat
counterintuitively given the country’s ageing population — was the German audience, 65% of
which was under 35. As well as games, UK users were interested in, among other things, sports
and pets, whereas the Italians preferred cars and technology, and the Spanish hobbies and travel.

Spanish
users are UK users are
more more likely to
interested be interested in
in travel and sports and pets
hobbies
Italian users
are more
interested
in cars and
technology German users
were found to
be the youngest

Next, Xaxis used a range of sub-segments from the gaming community to seed its proprietary
algorithm. As well as being based on the typical criteria — age, geography, and online behaviour,
for instance — these sub-segments were built around specific and unique characteristics of the
gaming-enthusiast audience.
For example, in the UK 41% of the general target demographic — men under the age of 25 — were
technology enthusiasts. But for our gaming audience, this rose to 54%. Technology enthusiasts were
an important target audience, an insight that allowed us to build a more effective and cost-efficient
media plan than would otherwise have been the case.
In this way, Xaxis identified three key sub-segments across all markets — techies, sports fans, and
hobbyists. This enabled the campaign team to build a suite of much larger and highly relevant
look-alike audiences to promote the release of the new game across all markets, broadening the
brand’s reach, the scale of its audience, and its ability to address potential customers across the
entire sales journey.
Another important insight gained during the initial measurement phase, was an understanding
of device usage among the target audience. Xaxis profiled device usage not only by market, but
also against the benchmark for each market. This showed, for example, that the target audience in
Germany was more likely than the average German to consume content on a mobile device, rather
than a desktop.

Using this information, we were able to contribute to a more effective plan which included cross-
channel content creation and targeting for each market. We were able to create, engage with and
see the relevant audience’s journey across devices and channels, increasing the effectiveness of
the campaign.
With a detailed insight profile for each segment, the campaign had a much wider reach, making it
possible to purchase inventory on a far broader range of sites. This not only opened up a wealth
of opportunities to re-engage, it also meant that the campaign was more cost efficient than would
have been possible if activity had been concentrated on just premium gaming sites. Moreover, we
are continuously optimising the audience — within the original parameters set by the profiling — to
target those who viewed the video most often.
Campaign results
100
80
VCR PERCENTAGE (%)
60
40
20
0
Average VCR Campaign KPI Xaxis result KPI
Average VCR Campaign KPI Xaxis result KPI

The campaign reached 25.9 million users, chosen because we identified them as being the most
likely to be interested in the new instalment. Engaging with this most relevant audience resulted
in very high video completion rates. Not only did the campaign outperform the average VCR for
gaming (approximately 65%), but it also outperformed the ambitious 75% VCR target in all major
European markets — obtaining a final average VCR of 84%.
With the gaming industry in flux, the game publishers are working hard to innovate their way to
a new marketing model. A data-led approach that works across channels and devices has the
potential to greatly increase the industry’s marketing reach, its ability to target its audience and
the effectiveness of online, cross-device campaigns. Insights gained in this type of media-buying
operation can be used to inform all other aspects of the campaign, whether content marketing,
influencer marketing or PR.

How indie game publishers can win the marketing game
But what about indie developers? They often don’t have as close a relationship with their gamers,
making it more difficult to identify their target audience, and also obtain the desired seed data to
build scaled look-alike audiences for programmatic media targeting. Their campaigns are also often
run on smaller budgets. “Without luck or a significant, influential benefactor (such as a well-known
social media star, for example), unknown teams with their own, original IP, are very likely to struggle
without a marketing partner of some kind”, explains Phil Elliot.
Here a different approach is required, a strategy that we have successfully used with some of its
non-gaming clients. In 2016, the Rwandan survivors’ charity SURF asked Xaxis for help promoting
its online jewellery shop. SURF had a relatively small number of website visitors to seed audience
targeting with, and also only a small media budget. To overcome these limitations, the campaign
team created a range of creative unit samples which it tested with online focus groups. Using the
insights from these focus groups, it was possible to predict where SURF’s most relevant audiences
might come from.

To scale the campaign, the team plugged these focus-group insights directly into the Xaxis data
management platform (DMP) and created a range of SURF specific look-alike audiences. Two
creative themes were also tested with the focus group, so that when the campaign went live
Xaxis could serve each audience segment with the content they found most engaging. Based on
the most relevant data signals, the creative was continually refined throughout the course of the
campaign. By the end of the campaign, there were 1,664 variations of the creative — where there
had originally been only two.
Example images from Xaxis run SURF campaign

The approach was cost-effective and exceeded SURF’s goals. Brand awareness among the target
audience increased by 66%. Consumers who saw our ads were 29% more likely to donate and 33%
more likely to make a purchase.
A similar approach — defining and scaling an audience by developing and testing hypotheses and
then refining creative based on relevant data signals — could be made to work as well for indie
games publishers who have a limited budget and seed data.
Campaign results using Xaxis dynamic creative

powered by predictive audience
Brand awareness
increase by 66%
29% more
likely to donate
33% more
likely to make
a purchase

The opportunity also exists to build scaled audiences by innovatively combining data from different
sources. Working with multiple FMCG clients, we have successfully used multiple sources of data
from survey companies such as Kantar TGI and then further refined the data to reach the most
relevant audience possible. There is every reason to think this approach can also be successfully
replicated for indie gaming publishers.
The gaming community online is served by a rich ecosystem of publisher, media, and independent
sites and forums. The streaming service Twitch, used by gamers to live-share gameplay, has 9.7
million daily active users[8]. Gaming related content also accounts for 80% of the top-trending
topics on YouTube[9]. And taken together, the top-10 gaming websites, excluding Twitch and
YouTube, have 98 million unique monthly users[10].
20%
other 80% of the
topics top-trending topics
on YouTube are
gaming related

The size and diversity of the gaming online ecosystem is matched by the level of interaction
between gamers and their favourite brands and publishers. This gives indie game publishers that
want to gain insights into their target audience using surveys and behavioural learning, a wealth of
potential partners to choose from.
“My main recommendation for small to mid-size developers and publishers,” says Joe Martin,
“would be to identify the specific community they are trying to reach and define it in as much detail
as possible. Use this information to plan your PR and community strategies, even just at a broad
level. Who are you
My main recommendation going to be talking
to? Where are they?

[for developers and publishers] How can you involve
…would be to identify the them? These are
specific community they are essential questions.”
trying to reach and define it

in as much detail as possible.
Use this to plan your PR and
community strategies…
Joe Martin, writer & content consultant for clients such as
Nintendo, Preliminary Games, Future Publishing & Custom
PC Magazine.

An exciting time for the games industry
Price Waterhouse Cooper estimates that the games industry will grow by 5% annually through to
2020. There is no reason to suppose growth will slow thereafter. The gaming community is larger,
more diverse, and more affluent than ever before. While this diversity, along with the shift from
brick-and-mortar to online retail, has presented some challenges to the industry, it’s also a source
of massive opportunity.
The shift to data-led marketing, using AI to optimise and refine campaigns in real time, is part of
the answer to dealing with these changes. To find out more about how we could help make this
approach work for you and for your games releases, email us at xaxemeamarketing@xaxis.com

About us
Xaxis is the world’s largest programmatic audience company that connects advertisers to
audiences across all addressable channels. Through the expert use of proprietary data and
advertising technology along with unparalleled media relationships, Xaxis delivers results for over
3,000 clients in 47 markets across North America, Europe, Asia Pacific, Latin America and the
Middle East. Advertisers working with Xaxis achieve exceptionally high return on advertising spend
through the company’s proprietary media products, as well as through its specialist companies,
Light Reaction, plista and Triad Retail Media.
For more information, visit www.xaxis.com

Appendix
[1]. 2016 Global Games Market Report: [7]. The Rise of Avid Mobile Gamers
An Overview of Trends & Insights, on YouTube, Google, March 2016.
Newzoo Games, June 2016.
[8]. Twitch By Numbers. https://www
[2]. Global 2015 Box Office: Revenue Hits twitch.tv/p/about.

Record $38 Billion-Plus, Pamela
McClintock, The Hollywood Reporter. [9]. Video Game Trends Rule on
YouTube. Zefr Insights,
[3]. Pocket Gamer App Store Metrics. 16 December 2016.
[4]. Essential Facts About the [10]. Top 15 Most Popular Video Game
Computer and Video Game Industry Websites | March 2017. eBiz MBA.
2016 Sales, Demographic And Usage
Data, Entertainment Software
Association (ESA), April 2016.
[5]. The Changing Face of Mobile
Gamers, 2016 Tapjoy, Inc.
[6]. Beyond 50/50: Breaking Down The
Percentage of Female Gamers by
Genre, Quantic Foundry, January
19th, 2017.

www.xaxis.com

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Video game marketing:

breaking the stalemate

Strategies for video-game brands to

Copyright © 2017 Xaxis Inc.

A different approach to video game marketing

can games publishers cut through and reach their audience?

full spectrum of marketing activities.

whitepaper. We hope you find it useful.

Copyright © 2017 Xaxis Inc.

The challenge: a crowded, cross-channel market

“ More games than ever are being released each week on

Copyright © 2017 Xaxis Inc.

Latin America Asia-Pacific

Copyright © 2017 Xaxis Inc.

Current State Of Market

budget instantly puts pressure on the marketing team.

Released in April 2016, Tom Clancy's The Division

Copyright © 2017 Xaxis Inc.

impression that gamers have “been there and done that”.

them have been innovative in using traditional lead-generation and permission-marketing

other games released at the same time.

and address the right audience for each games release.

Global video game ad spend

Copyright © 2017 Xaxis Inc.

Games marketing in a multi-device age

categories, that rises to 70%[6].

Copyright © 2017 Xaxis Inc.

users across a range of devices, platforms, and media.

audience segments, across all platforms, channels, and media.

Copyright © 2017 Xaxis Inc.

Video-game marketing is ready for innovation

Gaming marketers have not been slow to adapt

to challenges. An important tactic, has been

the increasing use of influencers. Influencers

are usually the owners of popular Twitch

and YouTube channels, are often teenagers

among the relevant demographics. The rise

of influencer marketing is hardly surprising:

according to Google, 90% of gamers watch a

YouTube gaming channel at least once a week

and 64% will download a game after seeing it

90% of gamers watch

Copyright © 2017 Xaxis Inc.

marketing investments have also become more diverse.”

This guarantees relevance but is

Games marketing has expensive. Relying solely on media

buying through insertion orders limits

ads were once prevalent, and the opportunities for re-engaging

as games media influence with consumers. Based on Xaxis’

experience working with GroupM

networks and content games industry, we believe there’s a

creators… marketing better way.

investments have also

Copyright © 2017 Xaxis Inc.

How major games publishers can work their data harder

a video completion rate (VCR) of 75% with a 30-second pre-roll ad.

Copyright © 2017 Xaxis Inc.

Copyright © 2017 Xaxis Inc.

media plan than would otherwise have been the case.