Madison + Vine took a few minutes with the man in the middle of Xbox's efforts. Bill Nielsen joined the Redmond, Wash.-based unit in 1999 and is director-U.S. subsidiary marketing. Nielsen, a former Kellogg exec, shared his views on the future of Xbox and the role of entertainment marketing.
M+V: What is the overall marketing strategy or positioning for the Xbox brand?
BN: The [traditional] view of the gaming business has been some guy in a dark cellar playing games [by himself]. We're saying it's a big, fun party to play games with your friends. There are no limitations demographically or economically. That's what we try very hard to establish with the entertainment properties that we tie in with.
M+V: Much has been made about marketers in this cluttered and fragmented marketplace turning increasingly away from traditional media to alternative marketing platforms such as entertainment. What role does entertainment play?
BN: I would say for our brand, we haven't turned our back on television, but we do not do much network advertising. We focus on cable because you're able to reach your demographic in a much more efficient manner. Our core demo is basically 16-30 year olds and cable works better for us. We spend about 60% of our budgets in cable. At the same time, we do a lot of promotional programs with entertainment properties. We focus very hard on music and do a lot of radio tie-ins and promotion because that's where our audience is. They're in their cars and listening to the radio. In a broad sense, we probably spend about 20% of our budget against those kinds of entertainment things.
M+V: Much of your strategy has indeed been music-focused. Where do you see your relationship going with artists?
BN: I don't think we're going to start our own label, but we have already done programs with CDs. [Popular game] "Project Gotham Racing" did a series of three CDs. "Amped," our snowboarding game, and "Halo" have done CDs using music from the games. A lot of people are hearing music for the first time in a game. And they want to know who the artist is and where they can get the music. A lot of places where we can reach our consumer is through the artists that they like.
M+V: What about other entertainment platforms?
BN: We do a lot of traditional product placement in feature films—when we don't end up on the cutting room floor. We do a lot of cross-promotion with DVD—Xbox plays DVDs. There are good opportunities for us to put demos of our games on their DVD and to plug their movies on the DVD products that our games are on. We also do a pretty significant amount on the Internet. We've shifted a considerable amount of our print spend to the Internet. The truth is that our customers—if they're buying print—aren't always reading it other than selected pages of what they want to see. We're finding they're spending more time online and with Xbox Live, it's an online product, so we can reach people when they're online—broadband-enabled people in particular. We do things with traditional game sites but we've also been a big partner with Yahoo! and their expansion into the gaming biz. And we own MSN so we've done great programs with them.
M+V: Do you see Xbox actually ever getting into the content-creation business whereby they have ownership of entertainment intellectual property?
%%PULLQUOTE_LEFT%% BN: I don't think we'll become investors in those type of things; I think we'll continue to partner with people. It's a better marketing model for us to be able to find the right products to market with. We've had better success with that.
M+V: Does that mean that we won't see you getting involved to the extent where you're contributing significantly to script development and other creative decisions and instead will find ways to integrate into projects that are already baked?
BN: It'll be probably in between those two. For instance, in about a week, Spike TV will start running the MDN Network for Mountain Dew. And we're very integrated into that program; we provided some creative consulting, but we definitely weren't the key funder for that. We're in at an early level with programming and we're making a financial commitment as far as buying advertising so that we have some creative say. But we're not willing to make the investment to create a lot of our own programming and put it out there. We're looking at what other people are doing, and when we find these people having a lot of success then we might reconsider it. The TV business is not an easy business to start with.