updated 04:25 pm EDT, Thu June 14, 2012
Toyota, Unilever, Samsung among first to participate in NUads
Microsoft later this year will roll out a new ad platform for video streaming services on its Xbox 360 console, presenting users with interactive experiences instead of the static ads seen on television. According to the Los Angeles Times, the new platform—dubbed NUads—will initially feature partnerships with Toyota, Unilever, and Samsung Mobile. The ad move is viewed as part of a larger Microsoft strategy to steal viewers from television networks and establish the 360 as the center of the living room experience.
NUads, short for Natural User Interface ads, will allow advertisers to pose questions directly to viewers, allowing them to vote on, for instance, devices they would like to see "reinvented" in the manner that Toyota has "reinvented" some of its car offerings. Users will enter data either through the Xbox controller or by gestures picked up by the Kinect camera add-on. Advertisers would then have access to viewer responses, as well as demographic information on voting blocs.
Last year, in a blog post on the Microsoft Advertising blog, the company showed off additional capabilities for the NUad platform. In future versions, users may be able to share ads on Twitter, get further rich content from advertisers, and add events from ads to their calendars. Users may also be able to locate service providers showcased in an ad, displaying their locations in an on-screen map to see which is closest to the user.
Microsoft plans to offer NUads to marketers at a premium rate higher than typical commercial advertising costs. The company cites NUads' ability to provide deeper engagement and more detailed demographic information as the reasons behind the premium pricing.
Taken in combination with a previously revealed patent covering mood-based ad targeting using the Kinect add-on, the NUad feature brings Microsoft's strategy into sharper focus. Microsoft has long been looking to leverage its 40-million-strong Xbox Live subscriber base as an advertising platform. Video and music streaming are quite popular among Xbox Live subscribers, and Microsoft says they account for more than half the time its users spend online. The software giant says ad revenue from the Xbox has increased 140 percent from 2010, although no official revenue numbers have been released.