Second Life Marketing: Still Strong

Rumors of the death of virtual world marketing are greatly exaggerated, says Second Life expert and author Au. Here, several ideas to resuscitate revenue

Almost exactly two years ago, a BusinessWeek cover story about Second Life sparked a swarm of interest from real-world companies looking to advertise in the user-created virtual world. Most of the early efforts were glorified 3D billboards that drew little reaction, and so the gold rush quickly died down. But that doesn't mean the notion of marketing in virtual worlds died with it. The three largest "metaverse" ad agencies have merely shifted their focus to worlds with larger user bases and less free-form creativity than Second Life. And new marketing campaigns continue to show up in Second Life as well.

Despite downbeat reports in Wired magazine and elsewhere, more than a dozen metaverse agencies are still developing virtual ad campaigns for major real-world clients, often returning impressive results. Last year, for example, a tiny San Francisco agency called This Second Marketing rolled out an avatar-driven promotional effort for the IMAX screening of the latest Harry Potter movie. "A huge proportion of our opening weekend tickets came from advance Internet purchases, and a large number of those people came from interacting on Second Life," one IMAX executive told the Hollywood Reporter.

So what kind of virtual world advertising campaigns are working?

Fostering Community

To refer to the Second Life "community" generally means its most active users, currently about 550,000 people who go "in-world" an average of 40 hours a month. It comprises numerous smaller communities, formed primarily around personal interests and activities. For this reason, the best entry point for outside companies is often through brands and products that already attract Second Life users.

The first relatively successful corporate-funded presence in Second Life was built for Showtime's popular series The L Word. The site features recreated locations from the show where fans can congregate and socialize. Using the capacity to stream QuickTime video into Second Life, "L Word Island" hosts regular episode viewing sessions—a kind of virtual living room. The CW show Gossip Girl took that a step further, creating a role-playing game where fans of the series become characters inspired by the show, sending scandalous text messages to each other through their virtual cell phones. L Word Island attracts about 5,000 visits a week, while Gossip Girl's virtual Manhattan garnered a reported 38,000 visits in its first three months.

Embracing the Fantastic

The worst mistake that would-be virtual world marketers make is assuming their Second Life presence should mirror the real world—in other words, making their branded location look like a shopping mall. Some of the most successful grassroots locales play in the full spectrum of possibility: dystopian, Blade Runner-esque cities of the future, for example, or interactive art installations that seem like 3D dreamscapes. This is the essential eclecticism of the Second Life experience—what I call "bebop reality."

Smart marketers will imagine their brands not as they are in the real world, but as they fit within this free-form play space. Among Second Life's most popular locales is "Greenies," a giant living room that makes avatars seem as small as ants. It's here that a British agency launched a campaign for its client, L'Oréal Paris, not as a traditional billboard, but as custom-made virtual products discretely placed inside a lady's SUV-size purse. After the first three months, Second Life residents had snatched up 34,000 copies of L'Oréal-branded objects—an amazing virtual item click-through rate of about 3% of the active user base (assuming some individuals took more than one).

Leveraging Metaverse Brands

As a user-created world with its own currency, Second Life is already bristling with established brands—it's just that they exist only in Second Life. The wide array of virtual companies launched by content creators spans fashion, aerospace, architecture, tattoos, choreography, and arms technology, to name but a few. The most well-known have earned their place and their names, and new content released through these brands engenders a surge of authentic buzz.

The same cannot be said of real-world brands, and so the solution has always been obvious: Instead of superimposing them on the virtual world, everyday brands should seek out the most popular content creators, and then hire them to merge the real and virtual brands into a product release that only exists in Second Life. Recently, marketers for Playboy did just that, partnering with several top metaverse fashion designers to create official products (bustiers, T-shirts, and more) for sale on "Playboy Island." With that kind of engagement, it's no surprise the virtual branch of Hugh Hefner's empire is among the most popular company-sponsored sites in Second Life.

While most Second Life-based marketing efforts have returned mediocre results, it's important to note these early successes. Consider the broader Internet, which reached the mainstream public in the early 1990s but was initially dismissed as an irrelevant plaything of hobbyist geeks. By the mid-1990s, with the launch of commercial Web browsers, corporations were scrambling to stake out a presence online. By 2000, they had wasted hundreds of millions on Web sites that provided too little value for too few visitors. These sites were typically bland and noninteractive, or stylish but insubstantial. After the dot-com crash, however, those sites that had delivered sustained, substantial usefulness—the likes of (AMZN), Yahoo! (YHOO), and eBay (EBAY)—dominated.

As a platform for commerce, Second Life first repeated the Internet's indulgent failures. But at the moment, there's at least some hope it'll repeat its successes, too.

Wagner James Au is author of The Making of Second Life: Notes from the New World (Harper Collins) and has written about high-tech culture for more than a decade. Au became Second Life's first embedded journalist—a white-suited avatar named "Hamlet Au"—in 2003 as a contractor for Linden Lab. He's been playing that same role on his own blog, New World Notes, since 2006.

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