WPP invest(ed) in Chinese in-game ad firm >> Digital Media

A retrospective piece of information.

WPP, one of the world's largest advertising group acquired a minority stake in InGame Ad Technology Interactive, a subsidiary of global IGA giant, IGA.

According to Credit Suisse's analyst report in 2007, the Online Gaming Market in China will hit 17.5Bn RMB by 2010. In fact, Online Gaming is the 6th most popular internet activity across Chinese users (CNNIC, Jun 2008) with 59.3% of users engaging in gaming, and a further 42.8% of these users spending more than 10hrs per week on online RPG games. Backed by this healthy population of hardcore gamers, advertisers are confident they can get strong brand awareness and retention through In Game Advertising. Its no wonder IGA has become a deal worth watching in China.

In Game Advertising may be a solution to game service providers like SNDA, Giant and The9 who've been trying innovative ways of charging the highly price sensitive gaming population in China. By providing free play on usual gameplay, and charging for additional levels and in game items, providers are trying to strike a balance between attracting a strong following and actually monetising them. By allowing IGA providers to stream ads into predetermined spots both ambient (dynamic) and static, game service providers have a new stream of revenue that can be sustained for as long as the game is alive. And for popular titles like Starcraft, WOW and Diablo, that may mean decades...

-------------------------------------------------------------
Digital Media - The voice of Asia's digital communications industry: WPP invests in Chinese in-game ad firm
25-Aug-08, 12:27

SHANGHAI - WPP has taken a minority stake in a Chinese in-game advertising firm to boost its exposure to one of the region’s fastest-growing online sectors.

The holding group’s WPP Digital arm has acquired 12.82 per cent of the issued share capital of IGA, parent company of Shanghai-based InGame Ad Technology Interactive.

InGame Ad (a separate company to global in-game advertising giant IGA) focuses on ads within PC-based online gaming. China differs from Western markets in that the PC is the most popular gaming platform, as opposed to consoles such as PlayStation 3.

Scott Spirit, strategy director at WPP, described the deal as an “early-stage investment” similar to a tie-up with HDT Holdings, a Chinese rich media ad-serving company. The investments are part of a strategy to take stakes in emerging Chinese companies within the digital sphere.

“All companies in this space are a tiny at the moment,” said Spirit. “Nobody has yet made it work in China.”

Other investors in IGA include California-based venture capital firm Revolution Ventures.