Xbox Live Hits the Ad Spot

BDRC Continental's Max Willey looks at in-game advertising on Microsoft's online platform

While in-game advertising has prompted much discussion in the past few years, there's not been a huge amount written about opportunities on the console platforms themselves. Sony's PlayStation Home is arguably the most obvious of the three current-gen machines in providing a home for marketing content - but Xbox Live is also showing some healthy numbers as well.

That's according to BRDC Continental's research director, Max Willey, who here takes a look at the Microsoft platform, and offers an analysis of the state of play.

Xbox Live (XBL) is huge and it's growing. Microsoft recently released figures showing that the 25 million XBL users worldwide are each spending more than 30 hours per month on the service that means cumulatively Xbox Live members are now logging on to the service for more than one billion hours a month.

The XBL dashboard, recently souped up to promote and integrate Xbox's spanking new Kinect peripheral, puts an ever increasing array of entertainment at the fingertips of its users: on demand movies and TV programmes, streamed radio, webchat, videochat and access to Facebook and Twitter. And rumours abound of more content in the pipeline...

In the last year alone there has been a 157 per cent increase in the time spent watching movies and television on Xbox. 42 per cent of XBL Gold members in the US are watching an average of an hour of television and movies on the service every day.

With these kinds of figures the Xbox Live dashboard has become an important opportunity for advertisers.

Xbox Live ads are interactive and unobtrusive

The intuitive nature of Xbox Live navigation (those nice big icons on the dashboard) is increasingly being used to place targeted, interactive advertising. The advertising, whilst noticeable, is relatively unobtrusive to those who choose not to interact, but its key strength is the extent to which it rewards users who do click through, giving them a mix of immersive content and virtual freebies such as downloadable gamer pictures, themes, streamed video and even branded games.

These rewards are, of course, important to both advertiser and user: A theme installed on a console means a gamer will be immersed in that branded environment whenever they access the dashboard - potentially a long period of time. Freebies mean that those who interact with the advertising are extremely positive about advertised brands.

They feel rewarded for interacting, resulting in warm perceptions of the advertised brand. It also makes them positive about the context of the advertising, and likely to interact with more ads for more rewards in future a win-win situation for advertisers.

Research conducted by BDRC Continental in December 2009 evaluated an XBL advertising campaign for a high resolution PC monitor, and results showed how well this worked.

The ad campaign targeted gamers in the UK, Denmark, France and the US. Core to the promotion was a prize of 1 million Xbox Live points that gamers could use to acquire game add-ons, movies on demand and more. BDRC Continental interviewed 600 Xbox LIVE gamers in the UK and US; 300 prior to the campaign and 300 towards the end, matched demographically so that the only difference between the pre- and post-stages was exposure to the advertising.

Results showed that the campaign had an enormous influence on key brand attributes:

  • 79 per cent uplift from pre to post exposure on likelihood to recommend the brand
  • 50 per cent uplift from pre to post exposure on likelihood to purchase the advertised monitor
  • 150 per cent uplift from pre to post exposure on spontaneous recall of the brand advertised
Slide 1

The campaign also successfully delivered a solid 3.1 per cent click-through rate and nearly 300,000 sweepstake entries.

There is much talk in the advertising and media industry about people particularly young people consuming different media simultaneously. A research study by Thinkbox, the marketing body for commercial TV, claims 48 per cent of 'digital consumers' (people who own and regularly use digital TV and broadband internet) watch TV while accessing the internet at the same time on most days.

It is a fair assumption that Xbox Live users - who fit the digital consumer profile (being significantly more likely to have Virgin or Sky) - are less likely to be consuming other media whilst navigating the XBL menu.

The service is predominantly a gateway to online gaming, and any gamer will tell you it's virtually impossible to do anything else whilst gaming, particularly online, where pausing a 'deathmatch' puts you at an enormous disadvantage! This gives Xbox Live advertising an edge over other media.

Gamers are an attractive audience for advertisers

Another strength in Xbox Live's advertising offering is that it puts brands in front of the notoriously hard to reach young male. Gamers are, in fact, a particularly attractive audience.

BDRC Continental has conducted three focus groups and a profiling survey of 500 male Xbox 360 online gamers aged 15-34 in the UK, covering demographics, gaming, attitudes and lifestyle. To help put Xbox 360 gamers into context, results were compared with all 15-34 UK males (taken from TGI, a marketing and media survey in Britain).

In terms of their profile, results showed that far from the old stereotype of gamers being 'nerdy', their defining characteristic is their competitive nature, with 72 per cent agreeing that they loved competing against others online.

Highly competitive individuals are less likely to find themselves out of work and the survey found that Xbox 360 gamers are more likely to be in work than 15-34 men as a whole. This means their average income is also considerably higher - online gamers' average personal income is 22,000 as opposed to 14,000 for the average 15-34 year old.

Xbox LIVE gamers also like to spend these earnings on top end ostentatious products. They are significantly more likely to go for premium goods and agree that money is the best measure of success.

Slide 2

The majority of XBL users own a car and over two thirds would be prepared to pay extra for a quality branded electronic product.

In particular they are very likely to spend considerable sums on toiletries and grooming, with 89 per cent using aftershave whilst 74 per cent moisturise. Any stereotypes about badly dressed computer geeks are very wide of the mark. If anything the label of 'metrosexual' seems more appropriate.

In short, as well as being hard-to-reach younger males, many are also what we call 'brand conscious consumers' that is they are competitive, enjoy winning and like to be seen to have the latest brands and gadgets.

Given the attractiveness of the audience, the positive impact of advertising on users of Xbox LIVE, and the unique potential of the platform for giving users an immersive, rewarding brand experience, advertising on Xbox LIVE looks set to grow.

Max Willey is research director at BRDC Continental.

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Latest comments (3)

Craig Ting Community Manager 7 years ago
Nice piece!

I've always admired the LIVE platform for the way in which it structures branding and marketing - right down to the branding and ad space that's an intrinsic part of 1 vs 100.

Captive audience ahoy in the breaks between questions, where the camera points straight at the advertising screen..
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Sean Arnold Editorial and Content Manager 7 years ago
I am all for advertisement, but how can they justify raising the price of the membership while they are raking in the ad revenue. I don't care about Facebook or twitter on XBL , and I am sure many people feel the same way, we have cell phones and computers for that. Maybe if they had them integrated better instead of not being able to play a game just so you could access those services it would be worth it. Netflix is the only non-Xbox service I use on the console and thats a paid service, if they want to raise the prices they need to either start giving us free stuff or get rid of the ads. You can't have your cake and eat it too.
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Max Willey Research Director, BDRC Continental7 years ago
I think a lot of the advertising is welcomed by users. the key is that it's relevant.

We recently evaluated an XBL ad for a mobile phone brand in Italy - the majority of XBL users who noticed the advertising interacted in some way (downloaded free gamer pics, themes, viewed video content etc) and the brand was seen as signifacntly more 'rewarding to its customers' as a result of these freebies.

Also it's interesting to note the rise of free branded Arcade games like Doritos Crash Course which apparently is great (XBM said you're mad if you don't download it or something similar!).

A lot of media rely on a mix of paid for content and advertising (newspapers, Sky/cable TV, cinema etc.). So long as the advertising isn't intrusive I reckon it's no bad thing.
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