Alongside Fintech, cyber, cloud, and other digital infrastructures, gaming experienced a boom this past year, in many thanks to the house confining Coronavirus pandemic. But other than selling games and subscriptions, gaming companies are looking to generate income from ads as well.
Israeli startup Anzu.io aims to facilitate this channel with the completion of a $9 million Series B round. The investment was led by BITKRAFT Ventures and HBSE Ventures, with advertising agency WPP, SONY, the Chicago Cubs, and Marc Merrill - co-founder of Riot Games.
“Without a doubt, the gaming industry’s growth helped Anzu succeed”
Anzu.io’s system seamlessly plants ads in the world of gaming. Just like billboards on the highway, Anzu’s system runs ads in virtual places where you’d expect to see advertising, like around a race track, on bus stops, street signs, and others. The company takes advantage of the game’s virtual real estate similar to how advertisers utilize actual real estate.
Beyond the company’s game advertising system, Anzu also provides advertisers a dashboard to create and manage marketing campaigns and analytics in real-time, similar to advertising systems at Google and Facebook, and create accessibility awareness based on user data. Anzu also deploys a system to manage advertiser payment based on actual advert awareness, and to ensure that the ads don’t interfere with or diminish the game’s brand.
Advertisers gain new and valuable real estate with the insane rise of eSports over the past few years, and even more significantly during COVID. This also opens a new revenue channel for game developers to enjoy even years after a game’s release.
In a conversation with Geektime, CEO Itamar Benedy commented on the rise of the gaming sector during COVID and its impact on the company’s growth, adding that gaming was going strong even before the pandemic: “but this past year’s rise caused major global advertisers to see games as an important advertising channel and divert more resources to the sector. Without a doubt, the gaming industry’s growth helped Anzu succeed. Due to our strong technological infrastructure, and the fact that many games have already utilized our platform, we are ready for the big players of the advertising game. In addition, we see an increase in games and advertisers offering to partner with us.”
Benedy said that the in-games campaigns are interactive, yet control of how much is left in the hands of gaming companies. “We provide standard ads, banners, or videos, which are approved by the IAB (Interactive Advertisement Bureau).Our technology allows the gamer to interact with the ad if he chooses. For example, set in a football stadium, we can put an ad with a survey on the vending machines, and the player can choose to either participate or continue with the game. The main advantage here is that no matter how we pitch the ad, it doesn’t interfere with gameplay, and the gamer is in no way distracted from the game itself.”
“Most gamers testify that real ads make gameplay more believable”
You’re not worried that in-game advertising could be intrusive or annoying for gamers who just want to play?
Benedy: “This is the exact reason we founded Anzu. We seamlessly implement ads in the game environment, without interfering with ongoing gameplay. Our ads help create a more realistic gameplay, because our ads are located in places people would expect to see marketing campaigns, like on billboards, stadiums, or buildings. In other words, our ads aren’t annoying for the gamers, but rather an inseparable part of the gaming environment. We respect the gamers, and aim not to interfere with gameplay, unlike marketing campaigns of the past.”
And, what happens when, like in internet browsers, ad blockers start popping up in the gaming world? According to Benedy, that not something that worries Anzu. “Ad blockers don’t affect in-game advertising, because its imprinted in the game’s design.”
Benedy says that most gamers testify that real ads make gameplay more believable: That’s because in the past, games would display fake ads in relevant virtual real estate. For example, billboards surrounding a stadium displayed ads for ‘Shmepsi’ instead of ‘Pepsi’, and by utilizing our system gaming companies can actually turn a profit from those blank spaces, while making their games seem more realistic.”
Benedy told us that he’s not sure if COVID helped or harmed the company’s fundraising efforts, “but we’re confident that the gaming industry’s immense growth will lead more major VCs to look at startups operating in the sector.” Furthermore, Benedy added that one thing highlighted from the current funding round was that the company rarely had to explain the need for its solution: “As the gaming industry climbs in popularity, it’s easier to convince VCs to join the gaming revolution.”
Anzu.io was founded 2016 by CEO Itamar Benedy; CTO Michael Badichi; and CPO Ben Fenster. The company’s R&D center is located in Tel Aviv and since its 2019 funding round, Anzu has opened other offices in Europe. To date the company has raised $17 million. Anzu tell that the funds will be used to increase marketing and sales strategies, and note that investors - with some coming from the advertising sector - will join as strategic partners, with Anzu remaining a private entity.