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Game Publisher THQ announced that it has joined the online game advertising network of Massive Inc., which places real-time ads within the gamescapes of many popular online games.

In-game advertising is a concept that is starting to become a reality, and it represents a large opportunity for advertisers to address an attractive demographic (18-34 y.o. males).

Ads for products can show up on billboards or other places within games and be changed and updated dynamically by Massive or other online game ad networks. Interestingly, the ads aren’t seen as intrusive by most gamers and actually add to the authenticity of the games (it mirrors the real world where there are ads). And unlike television or feature film ad placement, the repetitive nature of gaming activity ensures repeat exposure.

Ad rates are similar to those seen on cable television, according to Massive CEO Mitchell Davis.

Nielsen expects the in-game advertising for static ads (those in non-online games that aren’t updated dynamically) to reach $75 million this year and about $1 billion by 2010.

The main difference with online game ads is that they allow dynamic ad placement and better targeting, which has implications for local (given a geotargeting component). It could be a while before local ad placement reaches the online gaming world, but the pace of gaming advancement and adoption, and the endless virtual domain of ad inventory available there, suggest that it€™s an intuitive place for it to happen. We will continue to follow this closely.

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