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Brand Watch Opinion

Second Guessing Second Life

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Second Life Brand

We have been deluged recently with stories about the amazing virtual world of Second Life and the brave opportunities it creates for brands. It is hard to believe, but it has been little more than a year since the first major brand, US retailer American Apparel, opened its doors for virtual business on the site. The store sold virtual American Apparel clothing designed to be worn by the avatars that users create to populate Second Life.

American Apparel was soon joined by other brands. In October 2006, Starwood, the owner of hotel brands such as Westin and Sheraton, premiered its Aloft hotel brand on Second Life. Starwood saw its virtual hotel as a way of generating early customer insights about its venture long before any of the hotels opened.

A month later, Pontiac, the US car-maker, launched Motorati Island. According to Mark-Hans Richer, marketing director at Pontiac, it was designed to 'empower the car community in Second Life and develop with them in a unique and meaningful manner'. From April, Second Life boasted the ultimate marketing patronage when Coke launched a 'virtual thirst pavilion', where visitors could compete to create a virtual vending machine selling not Coke, but, according to the firm's website, 'the essence of Coca-Cola: refreshment, joy, unity, experience'.

It all sounds pretty amazing, until you visit Second Life.

Having spent last weekend walking around its virtual universe, I have to report that the whole thing is pretty crap – a bit like Milton Keynes with a very bad hangover. The branded locations that sounded so impressive in the pages of BusinessWeek are very basic and virtually devoid of visitors. Despite Second Life's bold claims of 8m residents, the limited server space means that locations can handle only 70 avatars at a time. Once you leave the congested entry portal, however, this is hardly a problem as most of the site is eerily quiet and deserted. I grew so bored and lonely in Second Life that I resorted to removing my trousers and shouting at the occasional avatars that passed by in a desperate attempt to make contact.

The lack of visitors or any sound strategic rationale for being there has begun to affect many of the brands in Second Life. American Apparel has all but given up on its virtual store, citing the criticism it has received and 'insignificant' sales. Starwood is also set to exit the site; its Aloft location is about to be handed over to another user.

Only Coca-Cola is bullish about its Second Life location. Michael Donnelly, the company's head of interactive marketing, accepts that much of Second Life is empty, but adds: 'My job is to invest in things that have never been done before.'

Second Life is an amazing technical feat, but when it comes to marketing and brand building we must retain a thick edge of cynicism and rigour. The site might be virtual, but the money being spent there by brands is very real and the logic behind that investment should be too.

Joseph Jaffe, the marketing consultant who helped Coke enter Second Life is quick to dismiss marketing rigour. 'This is not about reach. This is about connecting. So when people ask, "Why Second Life?" I ask "Why not?".'

You are exactly wrong, mate. The game might have changed, but the questions are the same. Whether you build brands with virtual stores, online ads or traditional media you had better be able to explain why you invested your marketing budget in that manner. Try doing it any other way and you are virtually guaranteed to be out of job. In the real world, at least.

30 SECONDS ON … SECOND LIFE'S PROBLEMS

- Time has labeled Second Life one of the five worst websites because of its user-unfriendliness, alnd has called Fortune 500 companies' forays into the world 'a case of some chief executives trying too hard to be
hip'.

- While Second Life claims to have about 8m residents, Linden Lab, which owns the site, stated that in June, the number of Second Life avatars created by distinct individuals was about 4m. Of those, only about 1m had logged on in the previous 30 days.

- Brands on Second Life, meanwhile, have suffered from pranks and vandalism. In April, a helicopter crashed into a Nissan building, starting a fire that left a couple of dead bodies.

- American Apparel is all but shuttering its Second Life shop, which attracted more critics than shoppers – not long after it opened, the Second Life Liberation Army shot its customers with virtual guns.

Courtesy of Marketing Magazine

Sponsored By: Brand Aid

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12 Comments

csven on January 09th, 2008 said

Yep. Second Life won’t suit most businesses that expect mindless consumers to rush in frenzied anticipation to some out-of-the-way and heavily-branded virtual island to gush admiringly at the amazing and irresistible Product some Company wants to Sell them. Now excuse me while I hop from corporate website to corporate website. If I get tired of that, I might stop by YouTube, but that’s so boring compared to reading about the latest Stuff I can go into debt acquiring.

Second Life isn’t a marketing vehicle. It’s practice for what’s coming. Assuming otherwise is and has been the mistake of people with more money than sense.

Katt Kongo on January 09th, 2008 said

You should really spend more than a weekend walking around in SL. Yes, there are plenty of quiet spots, spots where people like to relax, but there are lots of ways to connect to people, and a lot of great people to connect with.

As for the failure of real life companies in SL, I would say that the majority of them just don’t get it. You can’t go into SL, create a space and expect your presence there to boost your sales. Companies need to try to become a part of the community, find something to offer SL residents. I would suggest you explore The Weather Channel’s islands. They “get” it.

As for American Apparel, the clothes they offered in SL were crap, so why would I buy from them in reality?

Companies can throw money into SL. But this is one case where spending money does not lead to making money.

Bret Treasure on January 09th, 2008 said

Let’s start with a correction; Second Life is not a website.

Your article is a cursory analysis of a complex phenomenon. American Apparel’s site was poorly conceived. Starwood wanted feedback, got it and left.

Criticising the medium for bad corporate implementations by corporates is just poor journalism. Did you invalidate the web because initially some companies constructed web sites which failed?

There are a large number of applications being implemented by sophisticated corporates like IBM and Intel. Collaborative architectural projects like wikitecture, 3D visualisations like IBM’s Virtual Network Operation, the Ann Myers virtual medical school, various virtual educational projects being done by Princeton, MIT and dozens of other institutions…

Some of these people did a bit more research than spending a weekend showing off their penises. A little more depth in your reporting, please.

Carla on January 09th, 2008 said

This article is so not correct on many things and the reason it is not signed by the author makes me believe its just another negative THOUGHT about something he/she has totally no knowledge off.

a LOT of people in SL have become very successful and it was not by pulling down their pants and shouting at ppl
If you are starting as a noob, expect to be treated as a noob, even in RL you have to prove your sincerity as well in SL. No one takes a critical 2 day old avatar serious and the person writing this stupid article should have known that *that would be recearge . *or how ever you spell that*

As SL changed from a game to more real due to the Linden Dollar getting RL value everything has to be considered alike, so a company has to do advertising, name announcements just as they would have to in RL, in SL this is done true events, classifieds, land find adds and the right keywords just like any google or rl search for a company in a phone book.

Off course SL is a virtual world with lots of troubles, and limits, but all of the above statements in this blog made by a 2 day old noob in the world of SL about the successes of companies cant be taken seriously.

As a beta player from the start of SL I know and seen what can and has been done in this virtual world, instead of hanging around in deserted areas with your pants on your enkles you might have better looked into this world a bit more seriously.

Regards, try again
Carla

Dave Elchoness on January 09th, 2008 said

Let’s back up and consider not throwing out the baby with the bathwater. I concede fully that Second Life is currently not the place for successful marketing, brand awareness, etc. I have never understood why one would expect that a glitzy presence in Second Life, a virtual environment with relatively few residents where stumbling upon a company’s presence has to be entirely voluntary on the part of the resident (i.e. the resident must look for, find, and then choose to visit a location,) would be worthwhile.

On the other hand, interactions in Second Life “feel” like real life meetings. A number of companies recognize this and have begun holding meetings, events, and training sessions in Second Life and have set up offices and other environments for geographically separated employees in Second Life. Even NASA recently announced its intention to consider virtual worlds like Second Life as a means to keep Mars astronauts connected with their families on Earth during the voyage on the basis that “the experience encodes into our memories as if we were in the same place.”

So this use of Second Life, as a way of connecting people who are otherwise geographically distributed is extremely powerful and compelling. My company VRWorkplace advises enterprises on how to engage across distance inside of Second Life.

Second Life is a lot more like the telephone than a billboard. Marketers need to understand that.

Mark Ritson on January 09th, 2008 said

It’s great that so many people have sprung to the defense of Second Life. But what I seem to be missing is any actual empirical justification from these responses that Second Life is a valid marketing tool for brands.

My post actually does use evidence in describing the big brands that went to the trouble of setting up their stall in SL and then realised it was both pointless and impossible to justify in the age of marketing ROI.

I would be more than happy to retract any and all of my criticisms of SL if someone could get off their high cyberhorse and actually point to any evidence from current participating SL companies that their investment is delivering on awareness, brand awareness, advocacy, or any other demonstrable metric. And that the investment not only returns on its Investment, but also returns better than the other Investments that a brand could pursue.

You have to do better than: SL is cool, the future, different etc etc.

Just because its a new “brand building tool” in the IMC toolkit does not mean it gets to avoid the standard ROI and opportunity costs comparisons. Show me the money.

In the meantime I remain stood in SL, on my own, with my pants around my ankles.

Doreen Garrigus on January 09th, 2008 said

I’m sorry. I’m a little confused. You took your pants off and yelled at people to try to make connections? How was that supposed to help? Would you consider doing anything like that in Real Life? What do you suppose would happen if you did? It seems to me that you are very lucky that the residents you passed only hit their “mute” buttons and went away, leaving you, deservedly, alone.

Candy Durant on January 10th, 2008 said

I think that this is just the beginning of the idea of using a 3D Space for branding. If we all think back to the early 90s, the world wide web was very similar in it’s infancy. It was difficult to navigate, it was frustrating, design was less-than-par, and I’d guess that it was rare to have 70 visitors on one web page at one time. Eventually, people learned to use the internet, searches improved, developers learned how to make sites more user friendly, and branding on the web became worthwhile.

My point is that SL is just a baby right now. It’s like AOL was in 1994.. just sign in, play around, chat with strangers.. and eventually the software crashes. The only difference is that it’s way more interesting than a chatroom ;-) Give it some time and I think it could be great for branding.. it’s just not there yet. Bravo to companies who have gotten a head start, even if it’s not paying off yet. It will.

Ari on January 11th, 2008 said

Please PLEASE get this article out to as many advertisers as you can.

THEY are all as ignorant as YOU. And as an SL ‘resident’ – I say go away and good riddance.

I don’t like being just another number in some stupid campaign goal. All you boneheads really need to get a clue and stop treating everyone a s $$$ targets.

Try actually trying, huh? Become a PART of the COMMUNITY. And start by spending more than 30 minutes running around with your stupid pants off.

Idiot.

FA on January 18th, 2008 said

I agree it is difficult for a “newbie” to appreciate the nuances of Second Life, but if your visceral reaction was that it was “crap” I assume many of the now-dormant SL avatars feel the same! I think the key point is that Second Life should be evaluated in the same way as any other marketing opportunity. Objectives, role for communication, relevance to the target audience and success metric need to be rigorously defined (and of course you have to have a great creative idea) …something I don’t think many of the brands in SL did at all. If at the end of the day your $60k build only gets a few hundred (or even thousand) vistitors you have clearly wasted your money!

John Jainschigg on January 20th, 2008 said

I’m afraid Mr. Ritson is out-of-touch with what’s already been written about the nominal failure of first-generation Second Life marketing initiatives. I say ‘nominal,’ because in the cosmology of brands like Coke or Pontiac, the entirety of their Second Life efforts cost a fraction of what they might spend on a national web, print, radio, TV, or other campaign, or on sponsorship of any high-profile event.

Nevertheless, these first-gen corporate builds failed to produce ROI, and in most cases, for the reasons SL residents picked out from Day One: big, arrogant, impressive builds, and nobody there to talk to. Pontiac was an exception: the build was great, but they did some very interesting experiments with community, fashion and lifestyle and ended up learning a great deal, very cheaply, about how (for example) to network with, motivate and inform women car-buyers. All this cheaply-gained knowledge will, one expects, show up in their broader-based web and other marketing in the coming year.

Meanwhile, events are doing _great_ in Second Life. For example, my company, CMP Metaverse (along with Dr. Dobb’s Journal, InformationWeek and other CMP media partners) does a quarterly event in Second Life for 3D-Internet developers. Called Life 2.0 (http://www.life20.net) the show draws an audience of over a thousand C-level titles and senior software architects from every sector of the Fortune 1000, most of the large universities, institutions, NGOs, the federal government and the military. The six-day Fall event was sponsored by Sun Microsystems and IBM. Our Spring event, March 15-21, 2008, will be about twice as large. Our global clients have seen similar growth-paths and trends in their own Second Life events: noting consistent increases in audience size and quality. It’s also worth noting that, at present scaling capabilities, creating events for audiences of between 250-300 simultaneous users (not 70) is relatively cheap and easy. And audiences of several thousand can be accomodated by implementing companion technologies like streamed video.

As a general rule, Second Life works best when corporations commit to “showing up.” There’s plenty of qualified audience in SL for most categories of b2b events. And (suitably enhanced with custom software, services and metrics), the infrastructure of Second Life presents a very efficient, globally-accessible, immersive multimedia conferencing platform, the use of which is essentially free of charge. Once attendees have mastered the user interface (takes about 30 minutes for a motivated, computer-literate professional), they discover a willingness to engage with other professionals in Second Life’s milieu that stretches to hours on end — in metric comparison after metric comparison, professional users attending serious events will willingly spend roughly 5X the time in Second Life that they do on social networks, and roughly 15X the time they’ll spend in webinars.

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  1. Anonymous - January 9, 2008

    Second Guessing Second Life

    We have been deluged recently with stories about the amazing virtual world of Second Life and the brave opportunities it creates for brands. Should you believe the hype?

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