A story which has picked up some traction this week is that of Machinima paying Youtubers to post positive reviews of the Xbox One console at the time of its launch back in November 2013. The fact that they were paid is fine, but the fact they didn’t publicly announce that, isn’t.
“When people see a product touted online, they have a right to know whether they’re looking at an authentic opinion or a paid marketing pitch,” Federal Trade Commission Bureau of Consumer Protection director Jessica Rich said in a news release. “That’s true whether the endorsement appears in a video or any other media.”
It is reported that Microsoft gave a sum of money to Machinima, who then paid two Youtubers $45,000 between them, to write beaming reviews of the $500 console during its launch window. Both Youtubers failed to highlight the fact that it was an ‘endorsement’ and from a legal standpoint, this is wrong.
Another campaign was highlighted by the Federal Trade Commission. “In a separate phase of the marketing program, Machinima promised to pay a larger group of influencers $1 for every 1,000 video views, up to a total of $25,000,” it said. “Machinima did not require any of the influencers to disclose they were being paid for their endorsement.”
While many opinions and comments have been made on the topic, it seems that Microsoft themselves are not in the wrong for doing this. It’s nothing unusual from a marketing perspective, and Microsoft obviously have a solid legal team watching over their every action. A recent response to the FTC claim from Microsoft said “We are pleased that the FTC recognized Microsoft has vigorous compliance processes and procedures for sponsored campaigns.”
“While Microsoft and Starcom both were responsible for the influencers’ failure to disclose their material connection to the companies, [FTC Commission] staff considered the fact that these appeared to be isolated incidents that occurred in spite of, and not in the absence of, policies and procedures designed to prevent such lapses,” the FTC said. “The companies also quickly required Machinima to remedy the situation after they learned that Machinima was paying influencers without making the necessary disclosures.”
As for my two cents, if Microsoft were so confident in the console they were selling us consumers, why pay anyone to write positive reviews of their product? Shouldn’t the product speak for itself, and result in a happy consumer? I personally love my Xbox One, especially with Kinect. While the console launched missing a few features that were found on its older brother, the Xbox 360, Microsoft were quick to update the console monthly and add in those missing features and more. I firmly stand by my original belief that both the PlayStation 4 and Xbox One launched earlier than they should have, with both trying to be the first out of the gate for the holiday season of 2013.
Being paid to review products and games is something that has been taking place for a long time, especially in the games industry. When was the last time you saw a below average game getting a high scoring review?
The ultimate lesson to be learned from all this is; if you’re getting paid to say nice things about something, you damn well better tell your fans, followers and customers.