YouTube channel under fire for 'deceptive' Xbox video blog ads

08/09/2015

YouTubers on a popular YouTube channel recieved hidden payments to promote the Xbox One gaming console on their video blogs, it has been revealed.

Video bloggers were paid up to $30,000 (£20,000) to endorse the Xbox One as part of a "deceptive" ad campaign through the Machinima online entertainment network, according to the US Federal Trade Commission (FTC).

The US industry watchdog ruled that Machinima should have let viewers know the YouTubers were being paid to push the console.

In one example, a pair of YouTubers were paid $45,000 between them to publish two video reviews each, both of which beamed positive messages about Xbox One without stating that they were paid endorsements.

Machinima has now agreed to disclose when it’s paying YouTube creators to endorse products, settling the investigation.

Machinima and YouTube “influencers” were part of an Xbox One marketing campaign in 2013 managed by Microsoft’s advertising agency, Starcom MediaVest Group, according to the FTC.
Machinima guaranteed Starcom that the influencer videos would be viewed at least 19 million times, according to the agency — however, the MCN failed to adequately disclose that the YouTubers were being paid to tout Xbox, per the FTC complaint.

The United States government has determined that some Xbox One video materials from around the time of the system's launch in November 2013 qualified as "deceptive marketing."

The Federal Trade Commission (FTC) announced on Wednesday that popular YouTube network Machinima--which claims to have more than 400 million unique subscribers--has agreed to settle charges related to publishing positive videos about the Xbox One without disclosing it had been paid tens of thousands of dollars to do so. Microsoft, meanwhile, is mostly absolved of wrongdoing.

"Machinima is actively and deeply committed to ensuring transparency with all of its social influencer campaigns," said the company in a statement.

It added that the Xbox One campaign was run by senior managers and directors who had now left the company.

The FTC agreement comes soon after new guidelines for UK video bloggers who enter marketing relationships with brands were published. These encourage vloggers to clearly label when they are being paid to endorse products and services.

Read the FTC announcement here

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