• Ad Age, Tuesday, July 11, 2006 11 AM

Talk about brand diversification. More and more brands are selling virtual incarnations of their products online. In May, clothing maker American Apparel set up a virtual store in the online world Second Life, with the help of ad agency Ad Option. It has already sold over 200,000 items; Second Life shoppers who buy virtual clothes get a 15 percent discount off the real life items. Second Life is the biggest of the so-called massively multiplayer online games. The open-ended game already has nearly 200,000 residents who gather to socialize, explore, and buy and sell anything from property to clothing. It's also become a testing ground for marketers looking to reach those consumers who spend more time in front of their computers leading second lives than sitting in front of the TV. Ad Age writes that American Apparel didn't construct its virtual store to make money--although its virtual clothing does cost players real money--but rather to gain wider exposure among hardcore gamers. ESPN is another major marketer extending its presence to the online game. On a locale called Baseball Island, ESPN is hosting live coverage of this year's MLB home-run derby on several "Jumbotrons," while simulating the event on the virtual field. The event was created by Electric Sheep, a company that builds game environments, and will be sponsored by Budweiser. Says Tim Harris, senior vice president and co-founder of Play, a division of Publicis' Denuo group: "I'm getting an inquiry about Second Life basically every day."

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