Google Buys Adscape, In-Game Ads Startup

Google acquired Adscape, a small startup that delivers dynamic ads for video games, for $23 million. Adscape has an interesting technology that "enables the advertiser to send brand messaging, and many other transactions that are relevant to the game, benefiting both the advertiser and game publisher by offering exclusive offers/content directly to the game-player without interrupting game-play". You can imagine a product placement, that's smarter than what you see in a TV show, because it's targeted demographically and geographically. It's also a good way to reach teens and to improve the image of a brand by making it playful.

Business Week explains: "In-game ads work like this. A player goes online to race against human competitors in a Formula One title. As he turns a corner, he sees an ad imbedded in the game, perhaps as a virtual billboard, for a new car. His German opponent turns the same bend, and sees the same billboard, except it’s advertising a new government anti-drugs campaign. The ads are served according to geography; and are placed demographically with the confidence that most racers will be males in the 18-35 age-group."

Last month, a Google representative said: "We are always considering new ways to extend Google's advertising program to benefit our users, advertisers and publishers. In-game advertising offers one such possible extension among many others." Google tries to expand offline and to become the one-stop shop for advertisers, regardless of the medium.

In 2006, Microsoft acquired a much bigger player, Massive. Unlike Massive, that had big clients like Coca-Cola, Honda, Adscape prouds itself only with a list of patents, so this is just a starting point for Google.

Homework:
1. Would you play (did you play) a game that contains ads?
2. To target ads, the software must communicate with the server and tell information about the level, your situation. Is this a privacy breach?

Update (March 16): Google officially announces the acquisition. "In-game advertising is an area where we believe Google could add a lot of value to users, advertisers and publishers. Adscape Media's technology and talented team are a great addition to Google's current advertising solutions for advertisers and publishers."