Friday, October 11, 2013

Attribution and Xbox

John Wanamaker is widely regarded as the "father of modern marketing". Wanamaker made his fortune in Philadelphia at the turn of the 20th century.  His statue and a building bearing his name sit in the shadows of that city's glorious Town Hall.  Wanamaker popularised the fixed price system (that is, he set prices and did away with bargaining), invented the money-back guarantee and was the first merchant to take out large ads in newspapers.

In class we have spoken at length about attribution, and Wanamaker is credited with the best quote on the topic: "Half of the money I spend on advertising is wasted; the trouble is I don't know which half".

At a recent Association of National Advertisers conference in Phoenix, a Microsoft VP may have inadvertently hinted at a partial solution to the centuries old problem.

The Xbox One, the company saviour that will be rolled out 6 weeks, comes pre-installed with Microsoft's Kinect technology.  That technology 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".  That is, Microsoft could be able to tell advertisers how consumers in Xbox households respond to their ads, whether those ads appear in video games, on live television, during recorded shows or on streaming services like Netflix and Hulu.

Microsoft was quick to deny the reports.  The privacy concerns of users surely weigh heavily in the Seattle company's decisions.  But the technology is there and that data would be incredibly disruptive (its affect on pricing of advertising properties, for example, could be substantial).  And where there is disruption, there are profits (for someone, at least).

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