• by Wendy Davis , Staff Writer @wendyndavis, December 4, 2006

"The audience is dead. Long live the participant." So said Sarah Fay, president of digital media network Isobar, U.S. Speaking this morning at the UBS Global Media and Communications Conference in New York, Fay described how companies are using the latest trends in interactive media--including the much-hyped but vaguely defined "Web 2.0"--for marketing.

"Why is Web 2.0 important?" she asked. Because people participate in Web 2.0 sites, which means they interact with each other online; those who visit such sites listen to other online consumers about matters as mundane as which sneaker to purchase. "The brands that will win are those whose consumers tell the best stories," Fay said.

Isobar itself has arranged for Adidas to set up shop in Second Life, a simulated reality game. There, it sells virtual sneakers to Second Life residents, or "avatars."

While Adidas has so far sold a trifling amount of virtual shoes on the site, that's not the main appeal, Fay said. Rather, it's that Second Life players chat up the shoes--both in the game and elsewhere online. For instance, some have placed photos of their avatars wearing the sneakers on Flickr.

"It's taken an experience and allowed the consumer to carry it forward," she said. The added benefit to marketers is that the message carries credibility, because it's coming from a regular consumer and not the corporation.