Microsoft conducts ‘stealth marketing’ on YouTube – report

21 Jan 2014

The Xbox One console

In what could potentially be testing the waters of legality, Microsoft has allegedly been found to be giving YouTube gaming personalities money not to make negative videos about the Xbox One.

The news from the Arstechnica blog reported Microsoft is involved in a ‘stealth marketing’ campaign with gaming website Machinima and its YouTube partners that has caused a stir with YouTube viewers and producers alike.

A leaked image sent to Machinima partners shows that if they promoted the console during their videos with the tag ‘XB1M13’, they would receive an extra US$3 per thousand views on top of their YouTube and Machinima revenues, which could prove incredibly lucrative for some of the major personalities.

Restricting content

The topic of paid-for sponsoring of YouTube channels is not a new phenomenon, as companies like Microsoft and Sony would regularly sponsor users’ content to promote a new console or game. However, the legality of this marketing campaign is in question, as part of Microsoft’s agreement with content producers is that they include no reference to it being a promoted message from either Microsoft or Machinima.

In the United States, the Federal Trade Commission (FTC) issues guidelines for advertising, which asks for full disclosure of any such paid-for content.

This is similar to questions regarding product placement in TV shows, which has seen countries like the UK adapt a policy of notifying the user when content is sponsored.

One of the biggest YouTube personalities to openly discuss the marketing strategy is boogie2988, who told viewers that contract restrictions are so commonplace in YouTube that large producers are restricted in the content they can put out.

Machinima or Microsoft have so far refused to comment on the news.

Colm Gorey was a senior journalist with Silicon Republic