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Second Site

Setting up shop in a new neighborhood can be a challenge - especially when the laws of physics don't apply. The Golden Rules of Virtual World Marketing.

When multinational franchises start moving into any small town, there is one cardinal rule: Never piss off the locals. Just ask Wal-Mart. Apparently the same holds true of online virtual worlds like the much-publicized Second Life, where big brands like Reuters, Sony, Dell, and Toyota set up shop. It's not that residents of this 3-D world of user-generated communities, avatars, and economies, have trouble sharing the infinite space with real-world logos and marketers, but there have been a few bones of contention.

Of course residents like being able to design and drive their own Scion cars, tour a mock-up of a future real-world hotel, and buy Dell PCs. But what really got under their silicon hides were outside marketers claiming to be the "first" businesses of their kind to open in a world that has been building its own complex economy for three years. For example, in August an Ogilvy Public Relations Worldwide executive posted a "Gallery of Virtual 'Firsts' From Second Life" that included a Suzanne Vega concert, an American Apparel megastore, and a massive hotel from Starwood.

"Bullshit and hyperventilation," screamed The Second Life Herald, the virtual newspaper that covers this virtual world. "I would say it is a case of a bunch of desperate, clueless f**ktards trying to show how bleeding-edgy they are. ... But they are being exposed as clueless frauds."

Welcome to the neighborhood.

Granted, the isolated protests that broke out in SL last fall were voiced by avatars, so it was difficult to say what was role-playing and what was genuine. Reality gets a little dicey in here. But the point was well taken by newcomers like Joseph Jaffe, founder and president of new marketing firm crayon, which has offices in SL. "The real point that has come out of this is that residents are not happy about companies taking credit from residents, from established pioneers who have paved the way." Jaffe's own bleeding-edge company got touched by the controversy when one founder offhandedly claimed that crayon's in-world launch was also a "first." Ultimately, Jaffe thinks, it was a positive for crayon, an eight-person startup that made the front page of The Wall Street Journal in its first days. "It allowed us real-time feedback. The reaction helped us tweak the PR release and refine our message."

And so it goes in the quasi reality of Second Life and a host of other current and planned cyber-worlds, where early-in brands such as Adidas, IBM, and Pontiac must traverse new, ever-changing terrain that is almost real ... some of the time, kind of. SL is merely the highest profile and fastest growing virtual planet in a cosmos that also includes. There, the more international Habbo Hotel, Faketown, and upcoming galaxies such as Entropia. MTV recently launched Virtual Laguna Beach, which extends a TV series brand into a 3d interactive space for all fans to inhabit. For most marketers, however, SL has become the locus of attention, as its population grew from less than 200,000 earlier last year to 1.9 million by mid-December.

Forward-thinking brands want entry into these worlds and the cachet it brings, but they are already learning the first hard lesson of virtual reality: Be a good neighbor. "It is a much more user-created environment than any other medium," says Michael Bloxham, testing center director of BallStateUniversity's Center for Media Design, who is studying virtual worlds. "There is a great sense of ownership in what they perceive themselves as having created here."

In fact, these worlds and their virtual economies are so evolved that even well-meaning real-world strategies like giveaways can disrupt the marketplace by devaluing the goods and services the native residents create and sell. Real-world brands like American Apparel and Scion have learned that they need to sell their goods at fair market value to earn SL street cred and avatar respect. "You are going to fail if you treat it like somewhere you make a media buy," says Reuben Steiger, CEO and founder of Millions of Us, which created ScionCity, a place where SL residents can design and purchase branded cars that would be impossible to make in the real world.

In many ways, the ethos of advertising actually matches that of virtual worlds like SL perfectly. "So much advertising plays to aspirations that you don't want to display in public," says Bloxham, "but here you can." Do the market research on this culture and then give its denizens something of value, objects and opportunities to create for themselves, marketers have discovered. Play into the fantasy; don't interrupt it. "You must view it as a separate culture and treat it as you might treat China," says Steiger. A week after opening, Scion City had seen several thousand SL visitors and had sold about a thousand cars, purchased with the native Linden Dollars currency.

Brand Invisibility

When SL was a small burg, citizens were more likely to take offense at invading brands, but as the world enlarges, these efforts become less visible and upsetting. Marketing firms Rivers Run Red, Electric Sheep Company, and Millions of Us already have SL beachheads and help clients navigate the new neighborhood. Indeed, the biggest risk for outlander brands may not be resentment but invisibility. For now, the real-world pr buzz is loud about branded SL activity, but in SL itself, "the world is not really noticing them," says Wagner James Au, a former contract writer for Second Life. Au is writing a book about SL to be titled "Notes from the New World."

Au gives most brands relatively high marks for being respectful of the SL sensibilities. But when he studied in-world foot traffic, native-built stores and hot spots like Club Archeba (86,573 traffic rating) and Emerald Falls Casino (58,041) left branded spots ReutersIsland (2,578) and Sony/BMG (970) in the silicon dust. "Literally, a housewife who runs a nightclub in SL is 10 to 20 times more popular than ScionCity," says Au. Residents easily overlook these branded islands, and because they can teleport from spot to spot, there is little opportunity for interruptive advertising. Many of the branded locations are not actively manned throughout the day, and visitors get bored and leave, Au suggests. "Corporations are struggling to make themselves known in SL and they are failing," he says.

Outside City Limits

Well, not quite, says Jaffe. "If brands are in it for the long haul, then they will build an audience over time." And it is important to note that only about half of the registered SL members are active during a given month. The world handles merely tens of thousands at any given time. Virtual worlds like rival. There (500,000 members) have been struggling for visibility for a number of years. It remains unclear whether masses of people have the desire or patience to invest in second lives at all.

Regardless, early-in marketers who do things right already find that SL fame has disproportionate benefits. When Steiger helped Sun Microsystems hold a press conference in SL in October, it nabbed 214 press hits and nearly 3,000 blog mentions, he says, and the ScionCity project got similar press and blog coverage. "The [in-world] numbers are very small, but the ancillary activity in the blogosphere is an order of magnitude greater - a reach of tens of millions," says Steiger.

But even when the press tires of chasing SL stories (probably about now), brands need to experiment in virtual space for a host of other reasons. You can test products and marketing concepts there, and get even more ideas and feedback from the residents, at a fraction of real-world costs.

And the biggest learning for major companies will be how to let consumers play with a brand in a user-generated world both in and outside of SL. Whether millions become virtual-worlders or not, "It is going to influence our expectations of all screen-based media," says Bloxham. "It has a huge impact on the underlying expectations for the kind of relationship we have with media. Media isn't for consumption; it is to create and make money from."

Once consumers have the freedom to create and manipulate their own media experiences so radically, can they ever go back to prime time?

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