Adscape joins in-game ad fray

Chris Gilbert and Bernie Stolar are back.

The two veterans of the game industry who recently worked together at Sega of America went public today with news of a new venture. Adscape Media, a company that Gilbert will helm as CEO and Stolar will support as chairman of the board, hopes to establish itself in the fast-developing in-game advertising space.

While a number of companies have already staked their claim, specifically New York City-based Massive Entertainment and now San Francisco-based Double Fusion, Adscape sports two of the most recognizable names in the business--Bernie Stolar was part of the original PlayStation launch team, segueing to lead Sega's efforts and then Mattel Interactive's; Gilbert was part of Stolar's team at Sega, where he held the titles executive vice president of sales, marketing, and operations and senior vice president of sales.

Along with Peter Moore, now at Microsoft, Gilbert and Stolar led the Dreamcast launch efforts in 1999.

The Adscape model hopes to differentiate itself from Massive and Double Fusion by what it calls the Real World/Virtual World Gateway, or RVG, a proprietary technology that exploits the "connection between in-game ads and the real world."

According to the company, "RVG enables two-way text, audio, and video communication for making financial transactions, receiving rewards or game secrets, entering sweepstakes, downloading game-themed ringtones, and many other interactions that are relevant and important to the game itself. RVG delivers more effective reach and frequency to better serve advertisers and creates additional revenue streams for publishers."

While the company declined to name partners, the Gilbert and Stolar duo have one of the thickest Rolodexes in the industry. Gilbert already claims to be close to announcing significant partnerships.

Does RVG really work? GameSpot spoke with Chris Gilbert and Bernie Stolar and asked them to explain further the Adscape business model.

GameSpot: A great time to jump into this business model...

Chris Gilbert: It's a tremendous time to be in this industry, even though it's in its infancy. It's poised for rapid growth, as you know.

GS: How are you differentiating Adscape from the existing companies in the space?

CG: We're building the management team out with video game industry veterans, which we feel is very important because understanding the development cycles, understanding the gaming audience, being able to place conceptually appropriate advertising so that it enhances the gameplay and also provides value to the advertiser, and the gamer gets something else out of it, as opposed to just being bombarded by ads [is vital].

And while there's similar attributes to other companies, such as serving dynamic ads and the ability to be able to measure metrics, the RVG aspect [Real World/Virtual World gateway] of our SDK is very innovative. [It's] one that will not only provide gamers with new things to do and interesting ways to do them, but also provide more value for both the publisher and the advertising community.

GS: Bernie, as a board member of the company, what are you going to be adding to the company's profile?

Bernie Stolar: I was involved with the original group in Canada who put together the technology and helped recruit Chris as the CEO. I will be helping in the area of working with publishers, hardware [companies], and more importantly, with the game developers themselves.

GS: How does the Adscape technology differ from what Massive and Double Fusion are trying to do, and in some cases, doing now?

CG: I think there are a couple of areas that are very different. First of all, this issue of quality versus quantity is very important. In particular, we want to encourage the industry to take as much care in how ads are designed and how they're implemented, as much care as they have for developers who've been developing the games themselves.

It's very important that the advertisement enhances the experience rather than detracts from it. So, quality is extremely important to us.

And the second area that's going to differentiate us is this whole concept of RVG and the bidirectional communication technology and what kind of features that it provides--both for the gamer as well as for the advertiser.

GS: It seems like that's an additional revenue channel as well. How's the RVG technology going to surface in the game and how's the marketer going to take advantage of it?

CG: As the advertising is concerned, it enables us to be able to make the ads interactive. For example, let's say you're walking down the street [in the game environment] and there's a Verizon store on the street, and you want to walk into the store where there can be the latest Verizon phones. You can click on [a phone]. We can build the ability to be able to click on those phones and go outside the game to a Web site and get information about the phones or get promotional coupons about the phones. There are a number of ways to be able to go outside the game, into the real world, and be able to either gather information or gather coupons, and then go back into the game.

CG: The second example is, as you know, more and more music is being introduced in video games, and if a gamer enjoys that music and wants to download that music to his MP3 player, he can do that with the touch of a button. He can also have that track downloaded as a ringtone to his cell phone. We offer that bidirectional communication to allow that functionality to be built into the game.

GS: What's the reaction been so far among the publisher and the marketer communities?

CG: The reaction from the publishing community has been overwhelmingly strong. It creates new things for gamers to do. It makes advertising innovative. There is an opportunity for secondary transactions to be had, and obviously there's revenue off of that, to be shared.

From the advertising community, the reaction has also been very positive, because it's all about how you can give a gamer an opportunity to interact with a product or a brand. And this way, not only can they interact with it, but you can potentially create transactions off of that interaction. So it's compelling for the advertiser.

GS: So how do you address the argument that gamers don't want to leave the gaming world? Maybe I want to keep skateboarding or running or hiding or shooting...Maybe I don't want to go into a Verizon store or a Nextel store.

CG: Then you don't. It's totally up to the gamer. If he wants to be able to play around with different things in his environment, then great, he can do that. If he doesn't want to, he doesn't.

GS: Tell me how Adscape fits into the media-buying value chain? You've got your brand, you've got your media-buying group at an ad agency, you have a publisher, you have a developer. Where does Adscape stand in that value chain?

CG: We want to be the link that brings the publisher together with the advertiser. That's the way this business scales--that's the way it's more valuable for both the publisher and the advertiser.

GS: Who becomes your partner first? The publisher or the brand?

CG: First and foremost you have to start with content. And so it's about reaching out to the publishing community, understanding their sensitivities to their gaming population, what they want--the kind of experiences they want to bring to their gamers and then providing advertising mechanisms that enhance and are consistent with that gaming experience.

That's part of our heritage. I've spent a lot of time in the gaming industry; Bernie's obviously been there a long time. Our VP of publishing has been in the business for 20 years. That's our heritage--so our natural inclination is understanding developers and publishers and then bringing that value to advertisers.

GS: Do you have any partners currently?

CG: We have a few partners, but we're not prepared to talk about them yet. We have had discussions with all of the major publishers. We have a few deals under signature and we expect to have more in the very near future, which you will hear about, but we're not prepared to go down that road quite yet.

GS: Do you feel that you're under any disadvantage coming to this particular business model significantly later than Massive and Double Fusion have?

CG: No, actually I think it's an advantage being a second mover--you get to learn from other people's mistakes. And our focus on video gaming was to come to it from a little different perspective than some of our other competitors. We feel that that's definitely beneficial for Adscape Media.

GS: What's your opinion of what you've seen so far in terms of streaming ads into games?

CG: I think it's typical of an industry in its infancy. People are testing it out. Some of it's working nicely. Some of it's not working so well. And the ability for the industry as a whole to understand what works and to be able to go down that path is important.

GS: Does this mark the return of Bernard Stolar to the game industry?

BS: I don't think I ever left. Don't forget, I served on the board of a number of different companies in the industry, both from a publisher standpoint and a distribution standpoint. I've taken my time moving forward...where I saw the challenges and really strong upward opportunities--and I see one here.

GS: Thanks Chris and Bernie.