Is In-software Advertising the New Frontier for Business-to-business Advertising?

In response to the growing demand for highly relevant advertising opportunities, software companies can look to the gaming industry’s multi-million dollar revenues generated by in-game advertising.

Despite the current economic uncertainties, the in-game advertising industry is expected to reach $800 million in the US by 2012, according to a recent Forbes.com article. As the young male 18-34 demographic continues to shift its leisure time from television to gaming, consumer brands are taking advantage of this captive audience through relevant, well-placed advertising.

From fast food to tourism, clothing, and television itself, in-game advertising allows advertisers to craft creative campaigns within the context of the game. Starwood Hotels and Resorts Worldwide opened the Aloft Hotel in the popular virtual world, Second Life, in order to create hype and obtain feedback from potential clients prior to its launch, while Everquest 2 players can order delivery from Pizza Hut.

While mass consumer brands have gained a vast range of options to place their product within video games and virtual worlds, large-scale business-to-business solutions with similarly captive audiences are still in their early stages. Products and services aimed at business people are not necessarily well-placed in gaming environments.

So is in-software advertising the new frontier for business products and services? Microsoft recently dabbled in the in-software advertising concept with its basic office suite, Microsoft Works, offering a Sponsored Edition as a pilot in select markets, but has not announced any large-scale plans to offer a significant in-software advertising network.

In-software advertising in business applications could be B2B’s answer to in-game advertising. With the advent of the social web, business people expect higher value for lower costs – or no cost – and are more open to trading off the integration of advertising for a free or low-cost service. Contrary to the malicious adware of less reputable internet operations, business-oriented software companies have the opportunity to integrate unobtrusive advertising within a relevant context, much like in-game advertising which has gained mass acceptance.

With this opportunity to increase brand familiarity, ad recall, and purchase consideration, companies looking to advertise their product to a business audience can expect to see more software firms exploring the possibility of in-software advertising in the coming years.