The effects of embedding advertising in digital games has been explored in only a few controlled studies. This research provides results of an efficacy analysis of in-game advertising within the controlled environment of a racing car game, an environment in which advertising blends in naturally. The experiment was designed to understand the effectiveness of in-game advertising for both players and onlookers. Examining players in both Europe and the United States, this study measured how in-game advertising works on those who participate in electronic entertainment and those who watch it. The results indicate that such advertising is more effective for onlookers than for players. Implications for designers and researchers is discussed.