In the agency world, holding companies profess gaming investments, with mixed results

Marketers are more interested in gaming than ever before, but brands’ spending in the sector hasn’t grown as quickly as some observers anticipated in 2020 and 2021. For the holding companies that spun up dedicated gaming groups during these pandemic-fueled banner years, 2023 has been a year of continued activity — but also of tempered expectations.

The COVID-19 pandemic sparked a massive influx of attention into games and gaming content, encouraging many brands to reinvest in marketing geared toward the gaming audience. Between 2020 and 2022, four of the “big six” marketing holding companies introduced their own dedicated gaming offerings, including Dentsu Gaming, Publicis Play, Havas Play and Omnicom’s LevelUp OAC. Digiday contacted four agencies, including Dentsu, The Marketing Arm, Wavemaker US and Spark Foundry, for a report on the holding companies’ gaming groups in 2023.

Across the board, representatives of holdco agencies working in gaming told Digiday that — anecdotally — business has been good in 2023. Despite forecasts of a potential recession on the horizon, many brands are still increasing their spending in the sector.

“Roughly speaking, we grew our billings by over 200 percent in 2022 vs 2021 and have already surpassed our 2022 number this year,” said Simon Jones, a managing partner at the agency Spark Foundry and Publicis Play lead, who did not provide exact figures. “What’s really grown has been the number of clients who have embraced gaming. Also, the majority repeat-book once they test it.” Jones declined to name specific brands or specify whether they were new or returning clients.

Despite these positive murmurings, most of the agencies reached by Digiday for this report declined to share specifics that would suggest this is an actual industry-wide trend, including information about specific accounts gained or staffing decisions that would imply dedication to growing their gaming departments.

Dentsu was notably transparent about the expansion of its internal gaming team, and Publicis shared the aforementioned billing growth figure — but other agencies stressed that brands are still interested in the space without detailing specific victories or notable hires.

Experts at some holdco agencies believe that brands’ marketing spend in gaming has not grown apace with the opportunities present in the channel. 

“Gaming marketing spend is not increasing as much or as fast as it did through COVID and even through last year,” said Sami Barnett, head of gaming at The Marketing Arm, an Omnicom agency participating in LevelUp OAC. “I think this is due to life reopening post-COVID and the current economic strains. However, gaming will continue to take up a piece of a brand’s marketing pie.” Over the past year, non-endemic brands from Invisalign to Timberland have leaned into gaming, particularly via immersive platforms such as Roblox and Fortnite.

It doesn’t help that the larger agencies have to compete with smaller, sometimes more nimble endemic agencies operating in the gaming industry — but working in tandem with other companies under the holdco umbrella has helped larger agencies compete with their endemic competitors. 

“Being part of WPP unlocks access to our partner companies, and that access unlocks potential for programs and executions for our clients on a scale that just would not be achievable otherwise,” said Pete Basgen, director of gaming and esports at Wavemaker U.S. “It wouldn’t make a lot of sense for Wavemaker to be an investor and partner in Epic Games, but it makes all the sense in the world for WPP to do that.”

Slower-than-anticipated growth isn’t exactly a sign of doom and gloom, and the holding companies are gradually continuing to staff up their in-house gaming departments — particularly dentsu, which brought on Brent Koning to lead its gaming arm in December 2022. In addition to Koning, dentsu has hired 15 dedicated gaming specialists and integrated gaming into the responsibilities of over 500 staffers over the past two years, thereby doubling dentsu’s central gaming team. 

The company has also hired executives with dedicated gaming expertise, such as dentsu gaming head of products Dan Holland and global vp of strategy Magali Huot, retaining dedicated gaming specialists in six of its large accounts, according to dentsu. The company is leveraging its gaming expertise to reach Gen Z, and it recently became an inaugural member of Roblox’s Partner Program.

“Clients are more interested in long-term benefits, which is perhaps why some of the gaming technologies have taken a while to get their proper place within the marketing mix,” Huot said. 

To the experts at dentsu, however, the rise in brands’ interest in gaming marketing over the past two years is just a taste of the potential business to come. Even one of the most active agency holding companies in the sector believes that brands’ spending in gaming is not proportionate to the amount of attention and engagement piped into games on a daily basis.

Holland argued there’s a disconnect between ad spend and time and attention spent on gaming. The majority of American adults play games, yet gaming accounts for less than five percent of ad spend, according to an Interactive Advertising Bureau study earlier this year.

As they look toward the second half of 2023, gaming experts at the “big six” holding companies are focusing on educating their clients about the different marketing options and ad formats available in gaming, as well as providing more detailed measurement figures and other data, to make brands even more comfortable operating in gaming environments.

“Most brand-side marketers understand that video games are important, but that not everybody has flipped that switch in their head where it’s like, ‘when we’re doing our budget planning for next year, a chunk of that needs to go to games,’” Basgen said. “So, we’ll get there. We’ll definitely get there. We’re getting there right now.”

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