Microsoft Xbox One prompts outrage after YouTube stealth-marketing stunt

Games video creators on YouTube have reacted angrily to a stealth marketing campaign for Microsoft's Xbox One which paid bloggers for posting favourable videos.

The revelation that Microsoft paid extra for positive videos featuring at least 30 seconds of Xbox One game footage and for the tag "XB1M13" on the popular YouTube gaming channel Machinima has prompted confessions and complaints from gaming YouTube video creators.

Games expressed outrage - but the discovery has exposed a larger issue of undisclosed marketing efforts and routine payments to video bloggers. According to one, boogie2988, Microsoft is not the first company to try this kind of promotion, as it is "so commonplace" that it is "happening every day on YouTube".

The reported stealth marketing promotion saw video producers get paid extra for including 30 seconds of Xbox One game footage and mentioning the Xbox One with the tag "XB1M13" in a positive or neutral light in videos on the popular YouTube gaming channel.

Described as the "easiest/best promo" Machinima had ever done by the Machinima's UK community manager, terms of the deal specifically blocked disclosure of the payments, according to a leaked copy of the legal agreement. That could breach the US Federal Trade Commission's (FTC) guidelines (PDF) for use of endorsements in advertising that require links between endorsers and sellers of the product be disclosed. It might also break Advertising Standards Authority rules on bloggers and paid promotions.

Free and uneasy

The FTC terms dictate that "a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement" be disclosed because the endorsement could be "disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious."

The FTC guidelines give the specific example of gamers getting free game systems and then talking about those systems on a blog where disclosure of that free gift is necessary.

The ASA, which regulates advertising in the UK, says: "Put simply, a blogger who is given money to promote a product or service has to ensure readers are aware they're being advertised to."

According to an alleged leaked Machinima email promoting the deal to video creators, only the first 1.25m video views would qualify for the extra money, which at the rate of $3 per thousand views equates to $3,750.

The campaign started on 14 January but was marked as expired on 16 January on a clearinghouse for video marketing campaigns, indicating that the required 1.25m video views had been reached.

Complaints and confessions

Around 7,000 videos tagged "XB1M13" remain online and continue to rack up views, although not all the videos are associated with the promotion, including complaints from other YouTube users about the stealth marketing effort.

"Anyone with any integrity on YouTube is going to look at that and go 'what the fuck are you doing?'" said a YouTuber by the name of attackslug. "When I go onto YouTube looking for Let's Play videos, I want honest opinions."

The popularity of gaming YouTube video producers like PewDiePie and "Let's Play" videos (who is not involved in the Xbox One promotion) has made them attractive to marketers as they seek to avoid ad blocking technologies used by users as well as their resistance to traditional advertising.

This kind of marketing strategy is likely to increase given the influence of gaming vloggers, which will make disclosure of payments and promotions a key issue.

Both Microsoft and Machinima were contacted for comment but had not replied by the time of publication.

• In December, a new YouTube copyright scanner automatically blocked gaming YouTube videos which saw game publishers vow to help reinstate themThis article was written by Samuel Gibbs, for theguardian.com on Tuesday 21st January 2014 15.04 Europe/London