October 6, 2013

Microsoft VP Hints at XBox Data for Market Research

by Jack Neff, Adage

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, 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.

But perhaps the biggest potential impact is one Mr. Mehdi only hinted at — the possibility of making data from Xbox available for market research.

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.”

Xbox One can essentially work like TV that watches you, 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.

Biometric responses
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.

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