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This ad for Toyota Tacoma set in the World of Warcraft has been airing for a few days and has hit the front page of Digg and just about any WoW forum. The spot is a riff off one of the most famous WoW player moments, Leeroy Jenkins (wiki). The ad is not unlike the famous Coke spot made to look like it was set in the world of Grand Theft Auto.
ads // Ilya Vedrashko // machinima // Toyota // World of Warcraft
I wrote about this at my blog, but it goes without saying that this is a great way to market to younger consumers. I'm sure you'll see more in-game ads as well as out of game ads.
Thanks for the comment, Ron. You're pretty much on the money there, it's what's happening. If you're looking for more material/cases on this, we've got a two years archive of it :)
(archive that I just began tagging so excuse the mess, the categories still function fairly well though if you're looking for a certain subject)