According to a story on our sister site Gamasutra, research firm Parks Associates has predicted in a new report that spending on game advertising will grow 33 percent over the next five years to more than $2 billion by 2012.

The 33 percent compound annual growth rate that game ads' $370 million is forecasted to experience by 2012 is noted by the firm as being much greater than that of other major advertising media, including television, radio, print, and the internet-- with the greatest area of growth being in-game advertising. Spending on in-game ads is expected to jump from $55 million in 2006 to more than $800 million in 2012.

Says the article:

This growth mirrors, more conservatively, other similar predictions of potential revenue generated by in-game ads, with eMarketer recently reporting that such ads could generate as much as $969 million by 2011.

According to the firm, dynamic in-game ads, which represented 27 percent of game advertisement expenses in 2006, are predicted to make up the majority of all game advertising in 2012, accounting for 84 percent of advertising spending. Much of this growth, according to the firm, is pinned on the industry's ability to address "several looming challenges" such as "lack of economy, lack of industry standards, and media fragmentation."

"Advertising in electronic games had an average monthly household expenditure of less than 50 cents in 2006, while broadcast TV was at $37, meaning advertisers are not using the gaming medium to its full potential," said Yuanzhe (Michael) Cai, director of broadband and gaming, Parks Associates.

"If executed correctly, game advertising can provide a win-win solution for advertisers, developers and publishers, console manufacturers, game portals, and gamers," he added.

[Via Gamasutra]