(In)Game Advertising: The European Perspective On Related Legal Problems.

By Avv. Felix Hofer 1

1. When I came around 'game

advertising' for the first time my attitude as a lawyer, not

necessarily familiar with what I – snobbishly –

considered as basically being "kid's or nerds'

stuff", was obviously extremely skeptic. Running more and more

frequently into articles published on the topic, I very soon had to

realize that this was already a definitely "hot" topic to

a number of industry sectors, involving an incredible amount of

investment as well as offering truly exciting business

perspectives.

According to an interesting US study2, published in

June 2007 on in-game ad spending targeted to digital homes in the

period 2006–2012, companies had already invested 370 mln.

of USD and were expected to increase such figure up to 2.051 mln.

USD in year 2012.

Fairly impressed by the forecast exposed in the US study I got

curious about how feelings would be in Europe about potential

business development with respect to the specific area. Again

surprise, surprise: according to a study performed on behalf of the

EU Commission3 total revenues from on-line content sales

will reach 8,3 bln. on Euro by 2010 (at an increase rate of a

growth of over 400% in five years!) and on-line games will

contribute with a significant share to that quite remarkable pie.

In Fall 2007 another study 4 showed that the Internet

had already become the most popular communication tool among

youngsters aged between 16 and 24; in the specific target group 82%

affirmed to go on-line at least 5 days per week for entertainment

and information purposes, while 46% declared that they preferred

the Internet over (and used it more than) TV.

With the final blow I was provided when I had to realize that

9,8 bln. Euro had been spent for game consoles only during the 2007

Christmas period, that even traditional community venues (as sports

arenas, shopping centers) were arranging specific gaming areas and

organizing new entertainment events (e. g. "disc burn"

sessions) attractive for gamers, that digital platforms did score

important come-backs for popular past-time games and that in France

the gaming sector had surpassed the entertainment industry for the

first time in annual revenues.

2. So, this wasn't exactly a 'niche

area'! It was fairly obvious that this was actually big, big

business and therefore extremely attractive to the advertising

industry for a number of reasons, the most evident ones being

that:

- gaming had definitely developed form a 'lost boys'

domain into a widely accepted 'social activity', not

limited to a young public, but intensely practiced by entire

families and people of all ages,

- gamers did not appear to be disturbed by in-game ads (a

reaction very different from that widespread among the TV

audience), they actually did perceive those ads as relevant for

(and realistic within) the gaming context,

- they were even more eager to accept such advertising when it

reflected positively (through some additional benefit as a lower

sales price) on their game purchase5,

- during recent years dynamic in-game ads had been on a constant

rise compared to static ads (2006, 40% of global spending - 2007,

approx. 55%).

Furthermore industry enthusiasm appeared widely justified by the

fact that:

- game play metrics offered an extremely interesting perspective

both, on marketing effectiveness as well as on user habits (just

think of details as: angle/distance of ad views, game pauses,

position changes; not to speak of a truly exciting profiling

potential, where users' in-game behavior can be evaluated and

categorized, e. g. the "dishonest/unfair",

"brave/daring",

"non-competitive/confrontational" guy),

- identical in-side views were available with respect to

demographic targeting (based on the kind of game it's possible

to deliver different dynamic ads to specific audience groups),

while real time placement may easily be performed and consumer

engagement may be achieved (e. g. by combining an on-line ad with

an advergame),

- the opportunities for product placement and cross marketing

appeared to be simply immense.

3. Not much doubt about the attractiveness to

business, but what are the legal implications of this popular new

marketing tool? Well, from a European (more specifically from an

EU) perspective those implications are multiple and somehow

worrying. Let's therefore have a closer look at the provisions

likely to come into play, when in-game advertising is

performed.

3.1. A company intending to promote and

advertise a game will need to properly consider:

the general principles...