Microsoft Paying for Positive Xbox One Coverage on YouTube

An anonymous reader writes "Microsoft, partnered with Machinima, has put forth a promotion for YouTube personalities: make a video about the Xbox One and get money for it. Problematically, they also require the reviewer not to disclose that they're getting paid (or mention anything negative), which breaks FTC disclosure rules (PDF). Microsoft has a well-known history of astroturfing, but is this the first proof of them doing it illegally?"

Re:And?

[jones_supa]

Maybe we can dedicate a whole website to the 1,000s of companies that do this type of thing.

Don't know about a website, but at Wikipedia people have collected a list of astroturfing cases [wikipedia.org].

Re:And?

[Sockatume]

It's not a fine line at all in many jurisdictions, where any paid promotion must be explicitly disclosed. The agreement quoted here includes a gagging clause that's in direct conflict with that.

Re:Piled up on shelves

[CastrTroy]

Just because a product isn't selling well, doesn't mean it's not actually a superior product. I've heard people say that the GameCube actually had comparable if not better graphics compared to XBox, but most people just dismissed it outright, assuming that it couldn't possibly be any good, given it's appearance. Technically, all the numbers on the GameCube were lower, but it was capable of producing graphics that were just as good, because of a completely different architecture. Another example The iPad sells better than any other tablet out there, but it has some serious pitfalls, such as not being able to expand the storage, and not being able to hook up standard USB devices. Compare that to this year's Surface 2, which the only flaws seem to be the small app selection, and some people not liking the UI (which is pretty subjective), yet the Surface 2 isn't something most people consider. They want the iPad because everyone else has an iPad. As far as I see, the iPad is only the best in 1 respect, and that's that it has the most apps. That's a pretty important marketing point, but not the only thing to look at.

Some details

[eatvegetables]

From contract.

'''

You agree to keep confidential at all times all matters relating to this Agreement, including, without limitation, the Promotional Requirements, and the CPM Compensation, listed above. You understand that You may not post a copy of this Agreement or any terms thereof online or share them with any third party (other than a legal or financial representative). You agree that You have read the Nondisclosure Agreement (attached hereto and marked as Exhibit “A”) and You understand and agree to all of terms of the Nondisclosure Agreement, which is incorporated as part of this Agreement.

'''

The sketchy bit for me is that Machinima bills itself as "Machinima is the dominant video entertainment network for young males around the world. " Doesn't seem to clearly state that it is, perhaps, a promotional entity as well.

This is Machinima deal, not Microsoft

[nomaddamon]

Full contract at http://pastebin.com/vec6vjv5/ [pastebin.com]

Machinima lives of these kind of promotions (all Machinima affiliates get multiple offers per month)

The total cost for this promotion for Machinima is 3750$ (promotion ends when this CPM target is met)

It is likely Microsoft entered into a deal with Machinima to increase it's visibility and Machinima did the promotion on it's own (like it has done with a lot of brands before)

The rules don't apply.

[jdi_knght]

That whole FTC ruling was directed primary at bloggers (people who use affiliate programs were hooked in there too). Remember, the initial ruling came back in 2009 when searching for some sort of product review usually brought up a bunch of blogs. If you look at http://www.business.ftc.gov/do... [ftc.gov] , over half of the document references bloggers.

That particular problem doesn't really exist anymore for a number of products/services, because Google's Penguin/Panda updates have shoved most independent "blog" type reviews down a few pages in favour of Amazon (for products), ResellerRatings/RipOffReport (for retailers), and similar sites. Those are way easier to astroturf, so companies just hire "marketing agencies" to take care of those now instead of wasting time chasing after individual unpredictable bloggers who might have their sense of morality kick in at any time.

Aside: Microsoft's a little behind the times, as usual. The "new" way to do things would be to hire a company to make a few YouTube "reviews" and then use their multiple accounts to like them all, while searching for negative ones and disliking them. It's cheaper and easier.

Anyway, technically they could get a warning/fine from the FTC (or those who make the videos could) for what's being done here, but it's pretty unlikely. The video rules to qualify for the CPM bump are a little convoluted, and if the FTC actually pushed for fines, in court MS could make the case that paying out a higher CPM for Xbox videos has a similar outcome to bidding more for specific search terms on AdWords with "-sucks -awful -terrible" as negative keywords and then publicly stating that they bit more for ad clicks from non-negative reviews.

By the way, who *doesn't* assume that there could be some bias in videos from Machinima/partners and similar outlets? Surely I'm not the only one who sees them in the same light as gaming publications where if they say something too negative they suddenly stop getting free/early access to future products or have advertising revenue cut back. It's one thing when you see "Gus's XBOX 1 review" where he's taken video with a handheld camcorder from 2005 and you kind of assume he spent his own money and just wanted to talk about it and you maybe even take what he says at face value. The clean-cut commercialized stuff, you always take with a grain of salt.

Ignoring all that, even if Microsoft were to somehow eat a fine, I doubt they'd care. They sold the original Xbox at a loss for years, and FTC fines at most are a slap on the wrist for the big players. If you're a large corporation, you can usually find a way to make breaking the law profitable even when you're caught.

Re:Well

[gameboyhippo]

That's interesting. Most people I know grew out of playing Call of Duty and Grand Theft Auto and start playing grownup games like Pokémon instead.