ANA Annual Meeting 2013

Xbox One's Data Treasure Trove Could Reshape Marketing

Marketers Envision Unprecedented Access to TV Engagement; Microsoft Says It Has No Plans to Target Ads Based On Kinect Data

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Forty-nine days from an Xbox One rollout that could make or break one of Microsoft's most successful brands, the key marketing executive behind the launch outlined how it also could reshape marketing in a speech to the Association of National Advertisers Masters of Marketing Conference in Phoenix Oct. 5.

Yusuf Mehdi
Yusuf Mehdi

Yusuf Mehdi, corporate VP-marketing and strategy for Microsoft, outlined how he expects the new system, which succeeds the eight-year-old Xbox 360 in a neck-and-neck race with Sony's Playstation 4 launch, could affect marketing. Those possibilities include ramping up consumer expectations for production values in advertising thanks to advances in Xbox imaging technology, furthering the "gamification" movement in advertising, and consolidating more attention now diffused among multiple devices for gaming, TV and web browsing onto the big screen. For example, Xbox One will make it easier to port real-time fantasy-football data to the TV screen as people watch NFL games.

Holy grail

"We are trying to bridge some of the world between online and offline," he said. "That's a little bit of a holy grail in terms of how you understand the consumer in that 360 degrees of their life. We have a pretty unique position at Microsoft because of what we do with digital, as well as more and more with television because of Xbox. It's early days, but we're starting to put that together in more of a unifying way, and hopefully at some point we can start to offer that to advertisers broadly."

In an email to Ad Age after his speech, Mr. Mehdi said he was referring to reaching consumers with unified advertising experiences across multiple devices. Marketers in the audience, however, interpreted the comments to mean data could be made available for market research.

Xbox One can essentially work like TV that watches you, potentially bringing marketers a huge new trove of data about what's going on in living rooms, including, as one marketer put it after the speech, unprecedented information about how people engage with TV advertising.

"It could have a big impact on pricing," he said, given Xbox One's capacity for seeing whether people are paying attention or how their bodies respond to the ads, said the marketer, who wasn't authorized by his company to speak for attribution.

In his email, Mr. Mehdi clarified that "Microsoft does not have plans to target ads or content based on any data Kinect collects, and we will not in the future unless someone chooses to allow us to do so. Even then, we would give them a clear explanation of what is collected and how it will be used."

Biometric responses
Still, if Microsoft did offer such data, it could reshape marketing. Given that Xbox 360 has sold more than 78 million units, if even a fraction of likely Xbox One users could be persuaded to share data, the technology could create the world's largest panel for measuring biometric responses to advertising.

The new generation of Kinect technology in Xbox One can distinguish up to six voices in a room, respond to voice commands, read skeletal movement, muscle force, whether people are looking at or away from the TV and even their heart rates, Mr. Mehdi said. The latter happens as the camera detects slight changes in skin tone related to dilation of a blood vessel in the eyeball that responds to heart rate, Mr. Mehdi said.

In a feature that was controversial among some users, Microsoft originally said that the Xbox One would have to be connected to the internet and Mircosoft's servers at least once every 24 hours to function. After consumer outcry, Microsoft backed down. It also dropped its original plan to require that Kinect technology always be on for the console to work.

UPDATE: This story has been appended to include comments Mr. Mehdi emailed to Ad Age after publication.

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CORRECTION: An earlier version of the story incorrectly said Microsoft would require an Xbox One be connected to the internet and Microsoft's servers at least once every 24 hours. Microsoft reversed that policy.

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