Driven by a new generation of consoles and sophisticated handsets, and by increased penetration of broadband and wireless technologies, the global video game industry is expected to grow from its reported 31 billion in 2006 to 48.9 billion by 2011 according to Price Waterhouse Coopers in their released report “Global Entertainment and Media Outlook 2007-2011″

Demographic information provided by the NPD Group indicates 65% of North American Households play computer or video games. 49% of gamers are 18-49 years old, 25% under 18, and 26% are 50+ in years. The average age of a gamer is 35 years. 60% of gamers are male, and 40% are female. Almost 60% of gamers play with other gamers in-person. 36% of North Americans play games on their mobile devices – which is up from 20% in 2002.

As more people spend time playing video games advertisers are discovering innovative ways to reach their target audience through Advergaming – an in-game,high quality, engaging user experience. This next big thing in digital marketing is fast becoming an effective way to sell a product, create brand awareness or increase existing value in a brand. And, the community of game developers understand this is the way to fund their creative passions.

Advergaming has replaced the more traditional in-game advertising of billboards, posters, and other 2D/3D representational ads because it is more engaging to interact with your target by creating an experience with the brand within the game. Mountain Dew did this in a skateboard game creating a thirsty avatar who was empowered to greater heights in activity by drinking or “dewing” a Mountain Dew. A brilliant example where branding takes place by creating better user experience through “exclusivity”.

But brand marketers are not the only ones to take advantage of emerging in-game advertising opportunities, insurance and finance companies, and even the U.S. military, who traditionally were very conservative, have jumped into giving video game advertising a whirl. From recruiting to training these companies are having success. In fact, the American Army indicated that in-game advertising was the best recruitment tool they had ever used and the Pentagon indicated they planned on spending 100 million on Advergaming.

Brace yourselves…. According to Comscore smartphone users play a wider variety of games and three times as often so with 60% growth reported in smartphone sales Advergaming is going mobile. What a challenge the digital revolution is for us marketers. To compete effectively we must deploy our deep creativity and imagination, strategic and analytic thinking, decision-making, excellence in planning and execution, and still maintain flexibility to adapt on a dime to rapid change.