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  1. 1. KINECT’SMARKETING FUTUREHow the ‘Human Mouse’ Redefinesthe Digital Experience ENGAUGE.COM AN ENGAUGE.COM
  2. 2. KINECT’S MARKETING FUTURE How the ‘Human Mouse’ Redefines the Digital Experience If you’re among the many marketers trying to grasp the game-changing impact of Kinect, you’re not alone. Even Microsoft didn’t realize what it had on its hands. When launching in November, Microsoft predicted sales of 3 million units by the end of 2010. Instead, the company sold 8 million in two months – then 2 million more – and recently entered the Guinness Book of World Records as the fastest-selling consumer electronics product in history. For brands, the excitement is just beginning – and so are the challenges. Imagine a technology that transforms the human body into a giant mouse. That’s essentially what Microsoft’s new motion-sensing accessory for the Xbox 360 does. Facial recognition even allows for telling players apart. And by reacting to voice commands, Kinect alters the way we experience the digital world. And, if you buy the vision, it’s the biggest advance in mainstream digital interface since the mid-1980s’ commercialization of the mouse. Big brands, including Burger King and Samsung, jumped in first with Kinect gaming promotions. But the marketing potential of Kinect extends far beyond videogames. Why? Kinect technology transforms how people interact with all things digital – computers, websites and connected TVs. The impact extends beyond merely technological; there are economic implications, too. Unless you’ve tried surfing the web lately with just your computer keyboard and function key commands, it’s easy to forget how essential the lowly and oft-overlooked mouse is. The commercialization of Kinect – and its underlying PrimeSense technology – promises to open new doors and could explode our conceptions of what’s possibleBY TOMER TISHGARTEN online. In the not-too-distant future, it’s conceivable that we could navigate websites by gesture and voice command. We could talk and walk with our friends on Facebook or& PATRICK BRANDT send a smile over Twitter. Today’s online world remains governed by the conventions of preset hyperlinks and point-and-click devices, but, over time, those constraints will be shattered. The popularity of touchscreens on smartphones and tablets suggest we were already headed in this direction. Kinect only accelerates this preordained path. The question is not if, but when. Marketers may play an important role in determining how quickly Kinect technology crosses the chasm from gaming fanboys to mainstream adoption. The Engagement Potential for Brands In the near term, marketers could leverage Kinect technology to create eye-opening tradeshow displays and in-store promotions. Freed from the gaming console, the technology draws people into an immersive, interactive experience. Innovative web-based applications will also be worth considering as the technology reaches a critical mass of 15 percent of households or users, a point at which adoption Imagine a technology that accelerates. In the future, we envision that consumers scanned into the system could transforms the human body theoretically interact with three-dimensional models of products. into a giant mouse. That’s essentially what Microsoft’s Why couldn’t Ford, which recently launched an exclusive Xbox campaign for its new motion-sensing accessory C-MAX, put consumers behind the wheel and let them take the newest model for a spin? For catalog clothing brands, the e-commerce implications are immense. Why for the Xbox 360 does. By couldn’t Eddie Bauer let consumers try on clothes virtually? In the travel industry, the recognizing facial expressions applications are even more numerous – a walking tour of the cabanas at Club Med, and voice commands, Kinect anyone? And with the capacity to scan an entire room, why couldn’t The Home Depot alters the way we experience let customers design the layout of new kitchen cabinets or Ikea showcase sofas within the digital world. digital models of consumers’ living rooms? KINECT’S MARKETING FUTURE | 2
  3. 3. Avatar Kinect – Augmented Social Media With Avatar Kinect, Microsoft will soon enable users to engage in virtual reality videoconferences by placing their Xbox 360 avatars into any one of 15 digital environments, such as the set of a talk show. It remains to be seen whether mainstream consumers actually want to interact as avatars or how well the real-time tracking and replication of facial expressions and voice communication actually works. (The people in the promo videos tend to talk with their hands, overemphasizing every point, but in some cases, gestures can certainly facilitate better communication, not just bad acting.) The move into social media clearly conveys the point that Microsoft’s plans for the new technology go beyond gaming. The price-tag is shockingly cheap – about $150 – and definitely gets filed under disruptive technology. Improved Ad-Targeting and Expanded Demographics Microsoft is clearly interested in building interest among marketers and has indicated that potential benefits of Kinect include improved ad-targeting. Dennis Durkin, an executive in Microsoft’s Interactive Entertainment Business, reportedly told a conference in November 2010 that Kinect could be used to gather data on people watching a sporting event – for example, capturing not just the number of viewers in the room, but actually differentiating between the jerseys they wore to determine which team they support. Two years ago, Microsoft teamed with Nielsen to create TV-style ratings for advertisers in online multiplayer games in its Xbox Live network, and Kinect could add several more dimensions of data. However, Durkin’s comments suggest that Kinect could turn TVs into, basically, all-seeing corporate eyeballs. That goes way past the “creepy line” and is guaranteed to raise consumer privacy concerns. Videogames have been a useful marketing platform for reaching 18- to 34-year-old males, who can be a hard target to reach because they don’t read or watch as muchOTHER POINTS OF television as other demographics. Yet Kinect’s controller-free environment should appeal to casual gamers, not just the hardcore console jocks. Indeed, the pitch to advertisersINTEREST from Microsoft is that women, younger children and tweens are “joining in the fun” with Kinect.Avatar Kinect at CES Peak Expectations Meet Practical Challenges “There are rare moments in technology when everything changes. When the entireEntering the Era of Experience framework defining how we interact with machines (and, consequently, each other) shifts perceptibly, Forrester analyst James McQuivey recently noted. “These kinds of ” changes forever alter our economics, our social life and our individual experiences. ”Engauge Hacks Kinect The Kinect is a critical first step in ushering in a new Era of Experience, contends McQuivey, which will redefine how consumers interact with brands. Marketers have tremendous opportunities to differentiate themselves from their competitors in this new environment. While they certainly get to define the experience, they also face the challenge of developing those experiences — without instructions or precedents. For a sense of the difficulty of that challenge, it’s worth considering the experience of the Nintendo team that designed the Internet Channel for Wii, which debuted in 2006, and allowed users to surf the web using the Wii Remote — a wireless device that functions as a “pointer” and detects movement in three dimensions. (Wii is basically a precursor to Kinect and designed by a competitor.) “The thing was, at those first stages of development, I couldn’t let go of the image that I had of conventional browsers on a PC, acknowledges a developer named Yoshida. Yet after the launch, consumers began ” creating their own Wii-optimized websites. “I think this is the first time a Nintendo product has spurred this much creativity from our customers, commented another ” Nintendo designer. “I think this is a bi-directional relationship where we created the box and our customers created its contents. Thinking how it could expand in the future makes me very excited. ” KINECT’S MARKETING FUTURE | 3
  4. 4. Before agencies and developers can create the architecture of this new world — and customized applications for brands — they must first study what makes the new technology tick, which is why developers have been busy “hacking” Kinect. The development tools for Kinect are still fairly immature at this stage, but provide enough capabilities to build some very interesting applications regardless. As more work is done to support these tools by Microsoft and the larger development community, the possibilities for Kinect grow exponentially. The Takeaway • Kinect – the fastest-selling consumer electronics device in history – has redefined the digital experience for millions of consumers and created an immersive model for future brand interactions across games, web sites and connected TV. • With 10 million units sold in just four months, Kinect is quickly approaching the inflection point of 15 percent of households, the threshold at which adoption typically accelerates. • Microsoft is seeking buy-in from marketers, citing improved ad-targeting and game-based promotions. • Freed from the gaming console, Kinect technology can draw people into an immersive, interactive experience. Near-term possibilities include eye-opening tradeshow displays and in-store promotions. • In the not-too-distant future, we envision that consumers could theoretically interact with three-dimensional models of products — creating engagement opportunities from test-driving new cars, touring travel destinations to trying on clothing. ABOUT THE AUTHORS Tomer Tishgarten, VP of Technology Tomer oversees the Engauge technology team, a collective of innovation engineers focused on best-of-breed digital solutions, including custom mobile and social applications and integrations of e-commerce, CRM and Content Management Systems. His system architecture experience includes work with such clients as IBM, Target, The Home Depot, LexisNexis and Bank of America. After completing his master’s in cellular biology, he left academia to pursue his interests in web application development. Patrick Brandt, Innovation Architect Patrick has led the development of several high-profile applications for Engauge clients, designing the system architecture and ensuring that these solutions are aligned with the client’s business needs. He holds an MS in computer science with a focus on human computer interaction (HCI) and specializes in user-centeredFOR NEW BUSINESS INQUIRIES: design and development. He has recently developed applications in augmented reality and natural user interfaces using the Microsoft Kinect gaming peripheral.Joe KoufmanVP Business Development ,and Marketing ABOUT ENGAUGE404.601.4367 One of the nation’s largest independent agencies, Engauge leverages and technology to connect brands and people. The agency’s client roster includes Nationwide Insurance, Perkins Restaurant & Bakery, Ainsworth Pet Nutrition, Coca-Cola, Best Buy For Business, Chick-fil-A, Brown-Forman, Food Lion, The State of Georgia, Donatos, NGK Spark Plugs and more. Engauge, which has offices in Atlanta, Austin, Columbus, Orlando and Pittsburgh, is a portfolio company of Halyard Capital. Images: Atsushi Tadokoro KINECT’S MARKETING FUTURE | 4