DFC Dossier, a subscription monthly game industry research report, sent contributor N. Evan Van Zelfden to this year s [a]list summit.  Zelfden sat down with the agency s Eric Ayzenberg and Steve Fowler to discuss trends in game advertising.  As talk turned from strategy to execution, Capcom s Mike Webster, director of brand management, and Chris Kramer, director of community and public relations, joined the conversation to talk about the campaign for Resident Evil 5.” 

The following article appeared in DFC Dossier Issue #7 and is reprinted by permission from DFC Intelligence.

The Ayzenberg Group on Advertising Videogames

Billed as an insiders forum on video game advertising, marketing firm the Ayzenberg Group hosted its second annual [a]list summit in Napa, Calif. on August 12th-14th.  Representatives from 28 publishers were on hand to chart the rise of viral video, the death of screenshots, and how social media is the key differentiator.

Representing Pasadena, Calif.-based Ayzenberg was vice president of strategy and client service Steve Fowler and founder Eric Ayzenberg.  They are quick to point out there is a difference between paid media traditional advertising and owned media like an advertiser’s own website and earned media, which includes Facebook, YouTube, Digg.com, and Trip Advisor.

To better understand how such marketing is changing, DFC contributor N. Evan Van Zelfden sat down Fowler, Ayzenberg and a few other prominent attendees, for a discussion of how Ayzenberg advises its clients.  When asked what has changed the business of advertising video games the most, he responds, The emergence of social networks.

“We’re being tasked all the time to figure out ways to build communities.  That includes applications, mini-games, meta-games and entertaining content that can be shared on social portals, such as trailers and viral videos.  The agency then has to build creative ways to buy and plan media around these social networks,” Fowler says.

“The question Fowler hears most often is: How should social media be approached? That s because most executives he talks to are trying to figure it out on the fly,” he explains.

Eric Ayzenberg, who founded the firm in 1993, told DFC he’s now seeing the use of social media in addition to traditional campaigns.  A publisher might push TV and banner ads two weeks before a game launches, and the two weeks after.

“What publishers are doing these days,” explains Ayzenberg, “are funding programs with the understanding they are not going to be marketing a game for just a month ahead of release, but instead for a full year before launch.”

“On the day the game ships, there’s actually a huge audience out there, waiting for the game,” Ayzenberg says.  “They’ve been anticipating it, following it for a year.”

“Social media outlets are less expensive to get a message across yet require much more creative thought,” Fowler adds.  “And using both can be a powerful combination.  You just don’t have enough money to run TV ads for seven months.”

When asked about effects of recession on advertising budgets, Fowler responds bullishly, “We haven’t seen drastic budget cuts on the games that are shipping this year.”

“What has happened, however is publishers delaying game releases, hoping to launch them in an economy that’s much more spend-worthy.”  Fowler notes stiffer competition among advertising agencies as larger groups can no longer rely on automotive or financial sector advertisers, as opposed to the game industry which is relatively intact. Ayzenberg, by contrast, focuses on the game industry, and works regularly with a dozen publishers.

Fowler also notes the disparity between game marketing, and other products.  “A film’s ad budget is drafted by the finance team, based on projected revenues committing between 20 percent and 30 percent of those expected revenues to advanced advertising.  For games, somewhere between five percent and eight percent of projected revenue constitutes the total marketing budget.”

“As an industry, we grossly under-spend when compared to our closest entertainment industry,” Fowler notes.  “He thinks this could change, but adds that the way games are sold is changing, too.”

According to Fowler, in order for the packaged goods that follow a blockbuster model in big box retailers to survive, they’re going to have to spend more on marketing.  “Big publishers like Electronic Arts and Activision-Blizzard already spend more,” he says. “They get it.”

“But everyone is still trying to figure out what the right spend for emerging types of games should be, whether it s an iPhone game, or a virtual world, MMO, or a casual game portal.”

“Something else that’s in flux is the mainstream media itself, and how people use it.  That’s changing the agency business, too.  In the old world, an agency could create a magazine advertisement, or a television spot.  If the client liked it, that was it.  Print didn t have click-throughs to worry about.”

More and more, agencies are being held responsible for the success of the creative programs they build something game marketers describe as both liberating and scary, at the same time.

“You get instant feedback,” Fowler says.  “Now, a publisher can do a banner campaign, and look at the pre-order numbers.  Did it work   Did it not work   I think from a publisher’s standpoint, it’s pretty powerful.”

“When asked about the possibility of publishers reducing their ad spend,” Fowler responds: “I think it would be tragic. I think you would automatically see the result.  There are just too many titles out there to rely on word of mouth,” he explains.

Ayzenberg works on around a 100 games in a given year as a whole, the industry sees the release of more than 1,000 games each year.

“A game like Beyond Good and Evil might have rave reviews, but without a solid marketing campaign, it simply won’t sell,” Fowler laments.  “It’s very easy for that to happen to great product.”

Fowler has found the greatest marketing successes always come from the closest partnerships.  He has found it is vitally important to have the agency’s and the publisher’s marketing department do the demographics and positioning jointly.  Getting to the depth of product through having early builds of the game itself here at the agency, is also good.  Fowler uses Capcom’s Resident Evil 5 campaign (RE5) as an example.

Having our creatives sit down with the builds, play through the game, really understand what makes it different, unique.   Ayzenberg also had good access to the development team, making use of daily conference calls to Japan, Fowler relates.  “The more entrenched we are with the marketing division, and the developer division of the product we re launching, the more successful we ve been.”

Capcom director of brand management Mike Webster, and director of community and public relations Chris Kramer, attended the summit and were quick to agree that the long-term campaign leading up to the launch of Resident Evil 5 was very successful.

As a series, Resident Evil has sold over 40 million units worldwide. Capcom had the benefit of an existing fan base.  “For us, it was how do we leverage that existing fan base for Resident Evil 5,” Webster recalls.

With an original objective of selling 4.5 million units worldwide, the RE5 marketing team wanted to know how to create and maintain the proper message, and worked with Ayzenberg to develop the campaign.  To market the game, Kramer explains the decision was made to do something more interesting and creative than with past incarnations of the franchise.  That led to the creation of a series of viral videos, known as the flash-forward campaign.  The videos showed the lives of the protagonists, haunted after the events in Resident Evil 5’s story line, and was presented on a custom website named after the game s fictional location: Kijuju.

The top sharers of Kijuju content were then tracked across a variety of platforms such as Facebook, Google, and MySpace.  These top sharers were eventually listed in the game’s manual as Kijuju survivors.

As the distinctive Kijuju graffiti used on the web site became more popular, the sales and licensing departments got excited about using it beyond brand identity in viral videos and websites.

The techniques employed seem to have paid off: metrics report that followed its E3 2008 showing, indicated the game was the most anticipated title of the first quarter.  RE5 launched in March of 2009.  From January to October of 2008, GameTrax shows Resident Evil 5 received 47.8 million page views for the Xbox 360 version, and 43.2 million for the Playstation 3 version.

The next most anticipated title, the PS3 exclusive Killzone 2, only received 26.1 million page views during that same January-to-October period.  Most importantly RE5 had sold 5 million units worldwide by June of 2009.  Capcom estimates they increased the Resident Evil fan-base by 1.5 million people as a result of the long-term campaign.

N. Evan Van Zelfden has covered the international business of games for The Economist, Reuters, and Condé Nast Portfolio.

DFC Intelligence is a strategic market research and consulting firm that has covered the videogame industry since 1995.  To receive DFC Intelligence reports please visit the DFC Dossier sign-up page.