Today, the Yankee Group reported that the $77.7 million in-game advertising market is growing and will continue to grow at a steady rate. They expect that by 2011, it will grow to $971.3 million worldwide. Their report, Advertising and Games: 2007 In-Game Advertising Forecast, also shows that spending on Internet advertising grew $4.3 billion compared to traditional media, which only grew $3.6 billion.

"As ubiquitous connectivity continues to reshape the media and entertainment landscape, media fragmentation and clutter are a result, making traditional advertising channels less effective," said Michael Goodman, director of digital entertainment in Yankee Group's Consumer Research group. "Advertisers are increasingly finding in-game advertising to be a greater investment value because of the variety of opportunities that exist in and around games. Video games represent an 'above the line' opportunity, which means that video games should be used to build brands and not as a call to action that distracts from the game play."

Other interesting findings from the Yankee Group report were listed as follows: Dynamically placed 2D ads will cannibalize static in-game ads, but fixed product placements will continue to grow through 2011; the number of games with in-game ads will double annually through 2008; and in the near term, PC games will drive the market for dynamically served ads.