For the past season or so, advertisers and networks have been struggling to figure out where all of 18-34 year old males went – their television viewership is down 12 percent from last year and there are a lot of companies out there eager to sell them beer, cars, and technology. They finally figured it out – this group is spending 20 percent more time playing video games. And so where the valued 18-34 male goes, advertisers are sure to follow.

CNN had an interesting story recently about the push towards product placements in computer and video games. If you have to drive something in the game, why not drive this year’s Jeep, and if you have to drive past something, why not drive past billboards for Best Buy or fast food franchises? If your Sims have to drink something, why not make them dig deep in their pocket for quarters to buy Coke or Pepsi? And if you develop a strong sense of identification with your avitar, why shouldn’t the avatar be a new kind of brand identity? These are the questions Madison Avenue is abuzz about this week.

The early results indicate that game-based advertising has proven acceptable by many consumers and seems to be effective in increasing their emotional bonds with the brands. This year, companies spent $200 million on in-game advertising and product placement and by 2008, it is predicted this number will cross the $1 billion mark. “When I was a kid, I used to run downstairs to watch Saturday morning cartoons, but my sons wake up and run downstairs to play video games,“ said Jeff Bell, a Chrysler Group vice president.

And game companies and advertisers are struggling to come up with the right matrixes to measure the value of in-game advertisements. If the ad gets placed on a level where very few players reach, what is its value?