Sean Alexander

This morning I came across a great Op-Ed by Mark Suster of GRP Partners entitled, “The Future of Advertising will be Integrated” (via TechCrunch).  The piece compelled me to break with tradition here on the site and respond. He notes, “[The] future of helping make the ad industry more measurable (and more online) I believe will be one of helping make ads both authentic & integrated. Trying to relegate ads to the least intrusive real estate of our computers is missing the point. Advertisers pay for efficacy.”  This is an interesting discussion that spans multiple screens.  I’ll offer up a case example of where the industry is getting the balance right on the TV – Xbox LIVE.

As background, my team is responsible for the Platform and Products that deliver brand engagement on Xbox LIVE and online properties including MSN Games and Games for Windows LIVE Messenger.  We connect brands with an audience of over 30M Xbox LIVE members via engagement on the Xbox LIVE Dashboard, as well as curated in-game experiences.

Over the past five years, we’ve seen tremendous growth in our brand business, with big names engaging the community including Porsche, HP, Kia, Sprint, Red Bull, Hershey’s, P&G, T-Mobile, Unilever, and a broad swath of entertainment publishers.  If you’re unfamiliar with the experience, when you turn on an Xbox 360, you’re brought into the Xbox LIVE Dashboard, in effect a homepage on your TV split into Channels vertically and programmed “Tiles” horizontally, presenting easy discovery and navigation:

Each Tile is selectable, presenting content such as game downloads or experiences like NetFlix, Avatar Kinect, and Facebook.  Some of these tiles however present brand-associated content and when selected, enter a microsite purpose-built for the Xbox LIVE community and brand.  This, “In-Dash” promotion represents an intersection between traditional TV “Brand” advertising, and more engaged Digital advertising on the Web.

In a groundbreaking study done in partnership with IPG’s Mediabrands and neuroscience research company Emsense comparing traditional video to Xbox LIVE’s interactive approach, we’ve found that consumers react positively both in terms of cognitive engagement, unaided recall and emotional response.  For example, when compared to a generous 60 second video spot, the average duration of opt-in brand engagement among participants was over 298 seconds on Xbox LIVE:

And using Emsense’s unique bio-sensory measurement techniques, emotional response upon engagement with the brand jumps from 42nd percentile to 94th percentile:

This is part of the reason we see standard click-thru rates (CTR) 100x higher than comparable display campaigns on the Web.  This isn’t by accident.  The reason it works is because of the principled approach we take to engaging with consumers in the stream on the Dash guided by three core principles:

1.  Invite, don’t Interrupt
At the top level in the dashboard on Xbox LIVE, engagement starts with an invitation, not an interruption in the content stream.  In the example below, programmed content and offers- subscription, transaction, and brand-funded all appear together.  More recent updates include the addition of the phrase, “Advertisement” under the branded tile as a means of clearly communicating to the consumer what they are seeing.   

2.  Reward the Consumer for their Engagement
A community member’s time is precious, as well as family and friends who are in the room.  So we want to create a clear sense of value exchange for the consumer – normally in the form of streamed or downloadable content – HD video, themes, gamerpics, “snackable” entertainment experiences such as polling or even gear for your Avatar as can be seen in the below example pairing Lowe’s with the NCAA Final Four, inviting consumers to download Avatar Gear, Free Content, and participate in polling: 

Sweepstakes and prizing opportunities are also popular, as are LIVE “Game with Fame” events.  When brands bring celebrities into the mix, it’s a win for everyone as we recently saw when we worked with EA and Porsche, inviting users to race custom cars in Need for Speed against each other for a chance to win prizes and race head-to-head against legendary driver Hurley Haywood on Xbox LIVE.

3. Deliver Real Impact by Knowing your Audience
Brand metrics vary from medium to medium, with Xbox sitting in-between traditional TV Brand engagement and Digital display.  This is why we spend so much time on Ad Effectiveness Research with our partners.  For example, in the Porsche campaign for the launch of the Panamera, 75% of Xbox LIVE members who saw the promotion took a post-ad action.  19% said they visited a dealership, driving hundreds of thousands of consumers into the showroom through a mix of Xbox-driven social and multiscreen engagement:

It’s not just automakers – The History Channel’s recent promotion of the special “WWII in HD” found 60% who saw the campaign tuned in- that’s over 1.6M viewers driven from Xbox LIVE. 

From a product design perspective, we take a principled approach that recognizes we are stewards of the Xbox community first and foremost.  For example, the work we’ve done with brand integration with Kinect for Xbox 360 focuses on the authenticity and magic of the experience through gameplay and select brand promotion in the Kinect Hub.  But that’s a topic for another post.

These are just a few examples of the performance we’re seeing multi-nationally with agencies adding Xbox LIVE as a part of their media plans.  The Xbox LIVE in-stream approach isn’t right for every medium. But as the industry debates the future of advertising and consumer engagement on the TV, I look to what the team is doing on Xbox LIVE and think, “The future is already here”.

(Ed. Note: This post is a departure from my normal musings in Digital Media and reflects my past five years of work with Media & Entertainment platforms and products. Feedback and suggested topic areas are welcomed).

Update 1: Fixed headline and my reaction to Mark’s OpEd in first paragraph.
Update 2: Fixed missing quote.  Welcome to Techmeme readers