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Machinima and Microsoft had deal for paid Xbox One endorsements

Machinima and Microsoft had deal for paid Xbox One endorsements

Tue 21 Jan 2014 9:37am GMT / 4:37am EST / 1:37am PST
PublishingMarketing

[UPDATE] Videos promoting Xbox One received extra cash for page views; companies issue joint statement on "typical marketing partnership"

Machinima and Microsoft had a promotional deal in which content producers for the online network were paid extra to endorse the Xbox One.

According to a report from Ars Technica, at least one promotion was in effect where Machinima creators were paid an extra $3 CPM (per one thousand views) for video content that featured the Xbox One or its related services. To qualify, a video had to contain a minimum of 30 seconds of Xbox One gameplay within its opening two minutes - suitable videos were tagged with "XB1M13."

In a leaked copy of the legal agreement backing the promotion, it is made clear that this video content be, "focused on driving awareness for Xbox One Release," adding the caveat that, "you may not say anything negative or disparaging about Machinima, Xbox One or any of its Games." There are also clauses to ensure that the creator indicates that they are personally interacting with the game being discussed.

As Ars Technica points out, this deal between Machinima and Microsoft may contradict guidelines laid out by the FTC governing the way such relationships and endorsements should be conducted. Specifically, the FTC would require any such arrangement to be clearly disclosed in the videos.

The promotion only extended to the first 1.25 million video views, bringing the total additional money paid to just $3,750. This total was apparently reached just two days after the campaign started on January 14 this year.

This is just one more example of the games industry's increasingly complicated relationship with the burgeoning YouTube scene. Indeed, Microsoft found itself in hot water around the Xbox One launch for its alliance with controversial YouTube 'personality', KSI.

Other game publishers have been more hostile. In May, Nintendo was among the first publishers to challenge YouTubers' right to make money from 'Let's Play' videos featuring its games, and by the end of the year YouTubers were claiming of restrictive new policies enforced by the video hosting site.

[UPDATE]: Microsoft and Machinima issued a statement to The Verge in response to the report:

"This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December. The Xbox team does not review any specific content or provide feedback on content. Any confidentiality provisions, terms or other guidelines are standard documents provided by Machinima. For clarity, confidentiality relates to the agreements themselves, not the existence of the promotion."

21 Comments

Morville O'Driscoll
Games Blogger & Journalist

1,374 1,024 0.7
Popular Comment
This is just one more example of the games industry's increasingly complicated relationship with the burgeoning YouTube scene
More than that, though, it surely blurs the already-hazy line between advert, advertorial, promotion and criticism that exists in this industry, especially with the rider that
"you may not say anything negative or disparaging about Machinima, Xbox One or any of its Games."
Regardless of that, though, it shows how immature this industry still is compared to many others. I wonder how many companies there are in other industries that would think it "okay" to breach FTC regulations in such a manner?

Edited 3 times. Last edit by Morville O'Driscoll on 21st January 2014 10:19am

Posted:3 months ago

#1

Robin Clarke
Producer

275 600 2.2
Popular Comment
It's really disappointing how much of the games media's reporting on this has been couched in the gentlest of euphemisms.

There's no grey area in paying media outlets to abandon their editorial independence.

Posted:3 months ago

#2

Jakub Mikyska
CEO

178 880 4.9
"All is fair in love and war". And Microsoft loves XB1 and wages war on Sony :-)

On a serious note, I think that the mentions that the industry is still immature are correct. But more important is the immaturity of the audience. In any other industry, if a respected media outlet faced this kind of scandal, they would suffer a serious hit to their reputation and possibly even its demise. But nothing like that can happen here. All is fine.

Posted:3 months ago

#3

Nicholas Pantazis
Senior Editor

968 1,162 1.2
Popular Comment
I have no problems with promotional/paid advertorials as long as they are clearly labeled as such. Hiding it is extremely dirty though.

Posted:3 months ago

#4

Andrew Ihegbu
Studying Bsc Commercial Music

416 112 0.3
I don't think this 'immaturity' is reflective of the industry. I'm pretty sure that it is done under the radar for many, many companies outside the industry and we are stupid not to suspect any article which rather ceaselessly showers something with love. FTC guidelines are just that. Guidelines.


This is one of the biggest reasons I'm suspicious of anything with an Apple logo. I look at an iPhone and I see a pretty device with a large number of restrictive flaws that makes it unusable for me. Fixed battery, no removable storage, terrible pricing, restrictive networking, inability to do simple things like download media files for offline viewing, zero root access capabilities, poor wifi range, poorer bluetooth range, no USB solution, midrange camera etc etc.

I read a review and I'll be lucky to find a paragraph about any one of these and many of them would be completely ignored. I don't know about the rest of the world, but I've seen plenty of yellow journalism and take mos of what I read with a pinch of salt nowadays.

Posted:3 months ago

#5
A Sign of the Microsoft challenge, if at first you don't succeed, buy buy buy!

Posted:3 months ago

#6

Gregory Hommel
writer

92 53 0.6
I say, screw the FTC! Microsoft needs all the help it can get right about now. It will be even more sweet when even this, does not work. Microsoft should be hard at work on that new voice command. "Xbox One-stop sucking so badly."

Posted:3 months ago

#7

Jeff Kleist
Writer, Marketing, Licensing

209 86 0.4
People, this is nothing new. Microsoft was paying off pikes if enthusiast sites during the HD DVD wars. And so does nearly every single other company in the electronics industry. Those tech experts you see on CNN? Paid. Check the credentials of Rob Enderle for example, who repeatedly went to bat for HD DVD. He sat on both Microsoft and Toshiba advisory boards, and they were clients of his company. This man continues to be a go-to for the mainstream media

Since Sony gas been using Microsofts playbook from HD DVD the last year, I will bet money they have their own shills running around every hill and dale of the Internet, and have for a long time. The patterns are there, the stoking of the paranoia, the accusations as in this case, where you accuse your opponent of what you yourself are guilty of. Anyone remember Nintendo talking tonCongressabout the evil violence of the Seta Menacer while Sega stood quietly behind them holding a super scope!?

So seriously, this goes in in nearly every company large enough to have national PR problems. Impersonally traced one if Microsofts people during HD DVD. He was running at least half a dozen internet accounts out of his house, and who knows how many VON he was linking through. These people have dozens of identities, they gave their antagonizer account, the sock puppets that agree with it, and even accounts that do nothing but argue with the antagonizer, so that it's "reasonable" opinion, aka what they really want you to think, gets adopted by the community at large. Not trashing The company is a precondition of any sponsorship deal. This stuff is benign by comparison. Just manufactured outrage.

Posted:3 months ago

#8

Paul Jace
Merchandiser

770 1,005 1.3
Microsoft found itself in hot water around the Xbox One launch for its alliance with controversial YouTube 'personality', KSI.
That was more of a simple misunderstanding, as Microsoft and the majority of the rest of the world had no idea who he was or what he represented.
"This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December.
And thats perfectly fine, provided they aren't purposely breaking the FTC's rules.
According to a report from Ars Technica, at least one promotion was in effect where Machinima creators were paid an extra $3 CPM (per one thousand views) for video content that featured the Xbox One or its related services.
It could have been much worse. They could have offered to pay them in Bing Rewards.

Posted:3 months ago

#9

Nuttachai Tipprasert
Programmer

77 58 0.8
Popular Comment
This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December. The Xbox team does not review any specific content or provide feedback on content.
Way to dodge the bullets but seem like they missed the point entirely. It's not the problem about MS paying Machinima to advertise its products. It's the problem about you PAID someone to endorse your products but keep the deal secret in order to make the endorsements look like they are from individuals' unbiased opinions and this is WRONG!

Posted:3 months ago

#10

Paul Johnson
Managing Director / Lead code monkey

787 931 1.2
Am I in a parallel dimension here?

If this is "news" to you, then I envy you your world view. Seriously.

Posted:3 months ago

#11

Jeff Kleist
Writer, Marketing, Licensing

209 86 0.4
The Ars article has since been updated

The entire budget for the incentives was under $4000, and only six people have had videos found carrying the identifying tag.

If you're looking for smoking guns, that's pretty weak. I seriously doubt people like Rob Enderle, one of their chief real shills pick up the phone for $4k

Posted:3 months ago

#12

Christian Keichel
Journalist

420 568 1.4
The Ars article has since been updated

The entire budget for the incentives was under $4000, and only six people have had videos found carrying the identifying tag.
Can you post a link? The 2 updates of the article on arstechnica don't mention anything about a total budget of under $4000 and the article still speaks about a few hundred videos that seem to be tagged for the promotion. In fact in the latest update MS distances themself from Machinima by saying they weren't aware of " individual contracts Machinima had with their content providers as part of this promotion and we didnít provide feedback on any of the videos. "
Furthermore, MS stopped the whole program now and says:
We have asked Machinima to not post any additional Xbox One content as part of this media buy and we have asked them to add disclaimers to the videos that were part of this program indicating they were part of paid advertising
Doesn't sound like a weak smoking gun, but more like a desperate try to control the damage.

Edited 4 times. Last edit by Christian Keichel on 22nd January 2014 12:39pm

Posted:3 months ago

#13

Jim Webb
Executive Editor/Community Director

2,210 2,051 0.9
Christian, you can get the total budget by multiplying the total number of maximum page views for the campaign by the CPM. About $3,750.00 total.

However, this is minor compared to some EA ad campaigns I've seen. But that doesn't alter the fact that the practice of deceptive advertising which breaks the trust of consumers and media/social media, etc...isn't deplorable.

Posted:3 months ago

#14

Christian Keichel
Journalist

420 568 1.4
Christian, you can get the total budget by multiplying the total number of maximum page views for the campaign by the CPM. About $3,750.00 total.
Thanks for the info, only checked the 2 updates for the number.

Posted:3 months ago

#15

Jeff Kleist
Writer, Marketing, Licensing

209 86 0.4
@Christian

Thanks to Jim for pointing out the source

It's not that it's not deplorable, but everyone in this business does this, as Jim pointed out, everyone in every business in the country that has a national platform to protect. From golf clubs to pop tarts. Every person you see regularly on cable news is paid to promote agendas. A hell of a lot more than $4k I might add. A great example was James Carvilles wife's doublespeak on Real Time this week. Watch how she goes on about saving wildlife and then slams into global warming denial use talking points on a dime. She doesn't believe them, but she does believe in those fat checks from the GOP and allies

Posted:3 months ago

#16
The games media needs to down play this as a number of their own channels would look compromised if placed under similar scrutiny - have been following a story that the French debt court may demand Infogrames/Atari reveal their own marketing pay-outs (cash for coverage) as part of their bankrupt settlement - that could prove incredibly damaging for some respected names!

Posted:3 months ago

#17

David Serrano
Freelancer

281 247 0.9
@Morville O'Driscoll

While the editorial policies of most game sites, blogs and magazines are laughable, this actually isn't a game industry problem per se. This is the core problem created by paid advertising and sponsorships in all forms of media.

Having worked in consumer magazine publishing most of my life, I can tell you in my experience the internal concern was always about trying to maintain the integrity of the editorial product while also trying to meet the demands of the advertisers. Because the truth is when large companies spend thousands, sometimes millions of dollars on ad placements, they believe it entitles them to a certain level of control over all of the content that will accompany their ads. So the restrictions Microsoft placed in the Machinima rider are in no way unique to game related content, or to the games industry. Large companies in all industries will place the same types of restrictions on every ad they place. It doesn't matter if it's a magazine, website or Hollywood film.

Unfortunately the impact of advertiser restrictions on the accuracy and objectivity of all forms of mass market content is probably the single biggest problem that most people are painfully unaware of.

Posted:3 months ago

#18

Paul Johnson
Managing Director / Lead code monkey

787 931 1.2
Easy fix for that. "Fuck off".

And when they threaten to go elsewhere and they have integrity too, maybe it'll all level out only now there is integrity.

Posted:3 months ago

#19
@David, I greatly respect your experience in the publish scene - but I would also state that your character and morals would mean that you would not have entertained involvement with the seedier side of the business.

Speaking from experience as a constant freelance writer and a publisher of my own news service - there is a very cynical and decisive side of the magazine publishing business (especially when large publishers give editorial teams free reign). I can point to at least four occasions where I have stumbled across 'investment' changing hands to encourage a favorable review or the buying of better rating.

Many of those involved have left the consumer game industry by now - and many of those embroiled editorial executives have left publishing... only to become marketing / PR professionals! It it this mentality that fuels the nasty side of business such as buying for favorable reviews and coverage now from social media.

I wish that the consumer games trade had sorted its house out and brought it into order, but now with a distracted and apathetic customer base; Nintendo may not be the only publisher/manufacturer to be hit hard by falling sales! All fueled by an anger towards the executives arrogance in treating their player base.

Posted:2 months ago

#20

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