Microsoft allegedly paid YouTube personalities for positive reviews on their newest gaming console, Xbox One. In order to compete with its Sony rival PlayStation 4, Microsoft allegedly paid YouTube personalities who backed Xbox One $3 per one thousand views (CPM).
Leaked emails, deleted tweets and a now deleted advertisement have cast suspicions on Microsoft. A promotion was advertised by Machinima UK for a plus $3 CPM bonus for promoting the Xbox One. “It’s THAT EASY” was printed at the bottom of the ad.
In order for a positive review to warrant a CPM bonus, apparently YouTube personalities had a few simple guidelines. First, they must incorporate 30 seconds of real Xbox One gaming footage, while announcing to the audience they are indeed playing an Xbox One. Second, one must tag the video with XB1M13; and thirdly, submit a video link through Poptent, a specialized crowd-sourced video marketing platform designed for campaigns like Microsoft’s. Lastly, YouTube personalities and content creators must keep the promotion a clandestine one.
Additionally, in order for Xbox One to pay YouTube personalities for positive reviews, they agreed to not say anything negative or detrimental about Machinima, Xbox One, or any entity related. All controllers, games and Xbox devices must be spoken with utmost reverence to receive the $3 boost in CPM.
There are many reasons why Xbox One would gamble with paying for the approval of YouTube personalities. The most obvious is that these YouTube channels have thousands of subscribers as trusted community figures and more so, this style of advertisement is significantly cheaper than traditional advertising methods.
These YouTube personalities are increasingly gaining followers and subscribers, and are influential with game console consumers. If companies like Microsoft are paying YouTube personalities to give positive endorsements of their products, that may not necessarily be warranted, as the integrity of these personalities and the consoles they represent become dubious. The question of legality is also one of integrity. The details of the agreements were not to have been released, as they would be in violation of FTC guidelines.
Under the FTC rules and guidelines, endorsers under the law are viable if they do not “clearly and conspicuously” disclose that they are being compensated by advertisers for their endorsement services. Xbox One, by requesting YouTube personalities to remain silent about their endorsements of Microsoft, violates the FTC rules and guidelines and is considered illegal.
It is evident that consoles like Xbox One and Play Station 4 will go to great lengths to improvise ways to beat their competitors. Ultimately, the experience the consumer has with each system will be the deciding factor in which console they choose. Xbox One understands paying YouTube personalities to provide positive reviews of their console experience–with a clandestine contract–is violating FTC rules and guidelines. Xbox One has attempted to entice consumers with increasingly custom options for their consoles and controllers, while Play Station 4’s free network prescription proves lucrative among gamers, who often spend $50 for each game. Xbox One offers its network at roughly $15 a month, which explains why they would, potentially, approach less noble avenues for attracting consumers.
Since the allegations, Microsoft has responded in its defense, announcing they were not aware of any individual contracts Machinima had with their content providers. Additionally, Microsoft has asked Machinima to add video disclaimers indicating they were a part of a paid advertisement and to not post any more Xbox One advertisements.
By Zane Foley