Sony PSP3, Nintendo Wii and the Xbox 360 may get all the ink in the business press, but when it comes down to choosing where to place in-game advertising for the next four years, most marketers are going to turn to the browser, not the box.

Web-based casual games rather than gee-whiz dedicated consoles will be where the action is in in-game advertising for the short term. That’s the basic finding of an analysis done by marketing research firm eMarketer and published earlier this month.

Spending by marketers in the video game advertising space is anticipated to double by 2012 and hit the 41 billion mark. But those ads are far more likely to appear in casual Web-based games than on the big-ticket consoles from Microsoft, Sony PlayStation and Nintendo.

The eMarketer report, “Video Game Advertising” by senior analyst Paul Verna, found that of the more than $500 million spent on advertising in the game channel in 2007, about 59% went to in-game ads, marketing messages appearing within game play—as paid backdrop signage for racing games, for example, as product placement, or in interstitial ads between levels of play. The other 41% went to create advergames, games specifically built to promote a brand or product.

“Video games are increasingly on marketers’ radar for a lot of reasons,” Verna says. These include projections for increasing sales in both game software and hardware over the next few years, and the spread of the gaming habit among demographic groups outside the expected male-teen market.

“Part of what’s driving the expansion of in-game advertising is that videogaming as a whole has expanded into more of a mainstream activity,” he says. “Along with that comes this realization that there’s a lot of opportunity to insert ad support into the games.”

“The numbers aren’t such that they’re going to going to create a whole new industry around in-game advertising. But any marketers who want to maximize their message are certainly going to find games an interesting and growing channel.”

And between now and 2012, they’ll opt for the Internet to place those ads, the eMarketer report finds. Within the in-game ad segment, Web-based games will see the lion’s share of growth, increasing by a factor of 133% between last year (when spending hit $205 million) and 2012 ($478 million projected.) By comparison, spending on ads in console games ($90 million last year) will not quite double to $172 million in the same period.

Advergames—games created or customized to publicize a brand—will also grow in the next four years, reaching $350 million in 2012 from $207 million in 2007.

“It’s the technical implementation of the ads and the difficulty in getting back metrics that still limits the opportunities for advertising in console-based videogames,” Verna says. “If an advertiser puts an ad into [a console game like Final Fantasy 3], how do they know how that ad is actually performing?”

While ways do exist to reach a more or less rough estimate of the performance of ads on closed console systems, he says, “at the end of the day a marketer’s return on investment is that much greater advertising through an online channel, where everything is instantly measurable and the results come back in a way you can use to enhance your message.”

That picture may change, however. The current generation of game consoles are built to be connected to the Internet, and that may let marketers get real-time feedback on how players are interacting with the ad elements in console games. But while estimates on how many current Wii and Xbox owners are Web-enabling their consoles vary, “it’s not yet the kind of numbers that the console makers-or marketers, for that matter—would like to see,” Verna says.

Web-based ads have also come to dominate the in-game market because the quality of Web-based or PC-based games has improved so much in the last few years. “Consoles used to be the only way to get a compelling game experience,” says Verna. “browser-based games were a non-entity until a few years ago. Now, you buy a PC and its internal processor can do pretty much what any hardware-based console can do. We’re going to see more blurring of the lines between console games and PC- or Web-based games.”

As the installed base of gaming consoles does become more Internet-enabled, however, game makers and distributors will be able to build in space for “dynamic ads”, ad content that can be sent down a broadband connection on the fly. Ads won’t need to be baked into console games at the factory; advertisers can rent the chance to appear on a billboard in a football game or to insert a message between levels of a strategy game on the fly, possibly optimizing both the timing and the message to suit the gamer.

One analyst group quoted in the report, Parks Associates, expects that 84% of all in-game ads in console games will be dynamic; in 2006, only 27% were.

Several marketers have produced notable “advergames”—games designed to integrate their branded characters or trademarks into play. The Burger King games are one example, games that featured the Burger King racing cars or accomplishing stunts.

Those advergames will see some expansion in the next four years, growing in ad spend from $207 million last year to $350 million by 2012 in eMarketer’s projection. But Verna says he expects to see an increasing tendency of marketers to “piggyback” on an existing game with a proven audience.

He points to the example of office-supplies retailer Staples. In the 2007 back-to-school shopping season, the merchant made a deal with Shockwave’s popular “Jigsaw” puzzle-solving game. Shockwave produced a customized Jigsaw player that used the trademark Staples “Easy Button” as the “solve’ button. The player also offered Staples a branded page related the back-to-school theme and exclusive ad units around the Shockwave Web site.

“It’s a natural evolution of the way brands can play in this space,” Verna says. “And it makes sense. In an increasingly competitive and fragmented game marketplace, why take the risk of creating an entirely new game when instead you can pair up with a game brand that already has traction?”