Project Natal’s Ad Potential

There has been a lot of hullabaloo in the videogame world around Microsoft’s announcement of Project Natal, which it plans to release this winter in time for the holidays. For those who have not heard about it yet, allow me to summarize for you.
Project Natal is Microsoft’s effort to compete with Nintendo. Nintendo has dominated Microsoft (and Sony) during the current generation of videogame consoles because of its ability to tap into the casual-gaming crowd. The Nintendo Wii’s motion-based controls and party-style games appeal to people whose thumbs have not been trained over decades of hard-core gaming. For the past several years, Microsoft has not had an offering that appealed to the casual crowd the way the Wii does. That could change with Project Natal.
Project Natal removes the controller and all its intimidating joysticks and buttons from the video-gaming experience. In other words, it makes the player the controller.
Via a small device that plugs in to an Xbox 360, players will be able to interact with their games by simply standing in front of their televisions and making natural body movements to control on-screen action. Two small cameras that immediately detect players’ movements drive the technology. These cameras can determine, for example, if the player is kicking a ball, driving a car, or riding a skateboard. Using facial recognition technology, Project Natal can also determine who is playing the game and who is in the room watching them play.

This is where things start to get interesting for advertisers. Queue up the memories of Minority Report. Because the cameras can see who is in the room and who else is watching the screen, the data that could theoretically be captured and provided to advertisers would give them a huge advantage in the battle for consumers’ dollars.
The first potential breakthrough would be in ad targeting. Imagine targeting ads to users based on Project Natal’s best guess for a gamer’s gender, age or race. Beyond that, the game could pick up on other physical characteristics, like if a gamer was bald, overweight, or had bad acne or yellowing teeth. I bet there are plenty of advertisers who have products they would like to show to those folks.
The targeting would not have to stop with the gamer’s physical characteristics. If Microsoft could replicate the technology in the recently announced Google Goggles and integrate it with Project Natal, every item visible to the cameras could be scanned, identified and turned in to a targeting mechanism. For example, if the gamer was drinking a Mountain Dew while playing Halo, Pepsi could inform them of a new “master chief melon” flavor. If the gamer was wearing a Lacoste shirt, Ralph Lauren could serve her an ad with the location of the nearest Polo outlet. The ability to literally see into a consumer’s living room opens up an amazing variety of targeting options.

The next huge advantage is in reporting and analysis. In the online world, targeting and tracking audiences is light years ahead of the offline world. However, it is oftentimes done with cookie-based methods that are ill suited for situations where multiple consumers are using a single computer (not to mention for people who delete their cookies)

Project Natal would not have this problem. It would know exactly how many people saw an ad and how many times they saw it. Beyond simple reach and frequency, Project Natal could also make reporting on display ads much more robust. Imagine knowing not just how many people saw an ad, but also how long they looked at it (eye tracking), whether the ad made them smile or frown (facial-recognition technology) and whether or not they audibly said something in response to an ad (built in microphone).
All of this is very exciting and, admittedly, a little creepy. Do consumers really want advertisers taking that detailed a look in to their living rooms? Probably not. But with the announcement of Project Natal, the idea of targeting ads this way is becoming less science fiction and more of a reality. I, for one, will be keeping a very close eye on where Microsoft decides to take this technology. Who knows? Some day it may be keeping a very close eye on me.

Chris Lange is senior director of product management at Traffiq. He can be reached at