Google Gets Game

Burlingame, Calif. -

More than a year in the works, Google finally launched its in-game advertising platform Wednesday. Called AdSense for Games, the platform will offer advertisers access to millions of Web-based Flash games.

The in-game advertising market is small, scoring only $1 billion from advertising and subscriptions in 2007, according to research firm Parks Associates, but the entry of Google (nasdaq: GOOG - news - people ) is expected to make it explode.

"Google is helping to validate the space," says Jameson Hsu, chief executive of in-game ad network Mochi Media. "They're going out and evangelizing and building developer relationships."

Mochi Media, which serves in-game ads to 60 million people, is granting Google access to its inventory across 5,000 games as part of the Internet giant's European launch of AdSense for Games.

Google's new ad platform, which grew out of its 2007 acquisition of Adscape Media, has operated in beta since early 2008. Game developers like Konami, Playfish and Zynga participated in the beta, but now other developers and publishers will also be able to apply to the program. The most prevalent ads throughout the company's beta test were short video spots from Esurance, but the network will also provide contextual and text ads.

With AdSense for Games, advertisers can target campaigns based on keywords, genres or even specific games. Revenue, based on cost-per-impression or cost-per-click metrics, is split between Google and developers. Inventory is filled via auctions where advertisers bid on placement.

AdSense for Games is "an extension of the Google content network that allows advertisers to very easily gain access to in-game inventory," says Sebastien de Halleux, chief operating officer at social games developer Playfish. "In the past that's been very difficult to do and the inventory has been relatively restrictive."

De Halleux, whose company has been involved with AdSense for Games since its early stages, says Google's platform appealed to Playfish because social games scale quickly and Google has a large ad sales team.

He is also expecting a boom in in-game ad buying thanks to Google. Advertisers will now be drawn to the social games space as a way to explore in-game advertising. More savvy media buyers will simply integrate games into their online video buys, de Halleux says.

The Flash game development community should get a boost from Adsense for Games, but a few developers have already started making money. "One kid bought a car," says Hsu, referring to a developer who supports himself on in-game ad revenues. Adds Hsu: "Hopefully, someone will now buy a home one day."