Microsoft is under fire for its latest marketing tactics after word got out the company inked a stealth advertising deal with gaming and streaming website Machinima to promote the Xbox One on YouTube.
Machinima enlists gamers to post YouTube videos and deliver a variety of the latest gaming content to its more than 10 million subscribers.
In a stealth campaign with Microsoft, those same YouTube personalities apparently received additional pay from Machinima if they promoted the Xbox One on their channel.
Ars Technica, who broke news of the deal earlier this week, reports Machinima paid "video partners an additional $3 ... per thousand video views ... for posting videos featuring Xbox One content."
The deal, which was confirmed after a copy of the full legal agreement leaked, contained specific rules for content creators if they wanted to get the bonus. PCWorld lays them out.
"Incorporate thirty seconds of game footage into a video and specifically mention that it's played on an Xbox One; tag the video with XB1M13; and then submit the link through Poptent, a platform that specializes in crowd-sourced video-marketing campaigns like Microsoft's."
Gamers also could "not say anything negative or disparaging about Machinima, Xbox One, or any of its Games" and had to keep the deals they struck under wraps, according to the document. (Via Pastebin)
This type of advertising strategy, which masks sponsors, is commonly referred to as "astroturfing," and in this case it might even be illegal.
Under Federal Trade Commission guidelines, content creators are supposed to make it clear when a Web post, or portions of a post, are a paid endorsement. This rule might have been violated in Microsoft's deal with Machinima.
According to the leaked contract, the agreement has both an end date and a budgetary cap — Feb. 29, 2014, or 1.25 million views across all of Machinima's partnering videos. It's reported Machinima has already reached its cap.
