A looming boom in in-game advertising got industry pooh-bahs drooling at E3, with marketers and game execs salivating over the prospect of colonizing one of pop-culture’s last virgin territories.

In-game ads seem to be a terrific investment. Mitchell Davis, CEO of Massive, a company that connects game companies with advertisers, told an audience Thursday that his studies show in-game ads boost brand recognition by 23 percent to 35 percent. By comparison, he explained, a good television campaign might net a 6 percent to 8 percent brand lift.

Plus, people spend nearly the same amount of time playing video games every day as using the internet, according to Yankee Group senior analyst Michael Goodman, who spoke Tuesday.

Yet in-game ads remain a relatively untapped opportunity. But not for long: Panels with leading experts on the subject drew standing-room-only crowds throughout the expo as industry types eyed their prospects.

In-game ads in 2003 were worth a mere $30 million, compared to roughly $8.5 billion spent on internet advertising, Goodman said. But this year, that number will rise to $71.9 million, and by 2009 it will skyrocket to $562.5 million, he said.

“There’s a tremendous opportunity here for ads in video games,” said Goodman.

By Daniel Terdiman

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