Limits And Opportunities Of In-Game Advertising Under Italian Law

Article by Francesco Portolano and Matia Campo

The videogame market has undoubtedly become a new investment frontier for advertising professionals, who have begun taking advantage of the enormous opportunities In-games advertising (whether in the form of product placement or otherwise) has to offer.

Product placement occurs when a commercial product or a brand is placed in a television or film production or in any other audiovisual work to become an integral part of it. While product placement is extremely common in the film industry (and could become more common in the TV industry, following the coming revision of the TV Without Frontiers Directive) it has only recently begun to develop in the world of videogames.

In the field of videogames, "in-game advertising" may take many forms. From the typical product placement concept (posters in the background showing a brand, or a product is part of the game), to other forms of presence of the brand (e.g., the whole game may be branded, or a brand/product may appear between levels, etc.).

According to recent statements by the world's major software companies (e.g., Microsoft), huge investments are being made in the field of in-game advertising. Due to the latest technological developments, especially with respect to the high level of Internet interactivity, videogames can be constantly updated by downloading new brand names or products on a periodic basis.

Even more interestingly, the interactivity of an online game would allow the manufacturer to profile the taste and interests of the player and automatically select, for "placement" in the game, the most suitable product for the user.

Compared to product placement in movies, in-game advertising may have further advantages.

As the so called "episodic" videogame series become more popular, players\users spend more time playing than watching a movie or a TV show, and in most cases, the marketing of expansion packs, which are sold separately, trigger a high user retention.

There is more.

According to a recent study, the use of a brand name taken from real life adds a great level of realism to the game and increases users' appreciation for the game, and in all likelihood, for the advertised brand as well.

Sometimes (for example in online games), the advertiser could pay the product placement on a "pay-per-impression" basis (i.e., a set amount each time its brand is shown in a game to a player).

What does Italian law say about Product placement in...