Marketing in Second Life doesn’t work… here is why!

91 Comments

Last week, the Hamburg-based research firm Komjuniti published the first extensive survey of Resident attitudes toward real world marketing in Second Life. It’s been a long time in coming: a British branding agency established a forward operating base in SL back in early 2004 (and for their efforts, were greeted by throngs of sign-waving protesters threatening to boycott their island.)Coke in SL

In succeeding years, a miniature dot com boom has attracted a slew of big name companies and established brands, from MTV and Coke, to Dell, American Apparel, Coldwell Banker, among many more. Up until now, few have asked hard questions about what these companies were gaining for all that effort and cash (other than any publicity hit from the announcement.)

The early results from Komjuniti, as it turns out, are not encouraging: 72% of their 200 respondents [PDF file] said they were disappointed with real world company activities in Second Life; just over 40% considered these efforts a one-off not likely to last.

As bleak as these numbers may seem, it’s worth noting that they aren’t actually too far off from reactions to traditional Internet advertising. For example, four years after Net-based advertising had reached full fury, Yankelovich Parterns conducted a 2004 study and found that 60% of consumers had a significantly more negative opinion of marketing and advertising on the Web now than a few years previous, while 65% described themselves as feeling constantly bombarded by ads online. So in a relatively similar space of time, advertisers and brand promoters in Second Life have managed to annoy their potential customers only slightly more then their established brethren.

More worrying, however, are another pair of numbers: while 41% of respondents in the Yankelovich study said that Internet advertising had at least some relevance to them, a mere 7% of respondents in the Komjuniti study say that the SL-based promotion would have a positive impact on their future buying behavior.

Why has the failure been so thorough? Not necessarily for a lack of desire, because the Komjuniti participants also report “they would like to be able to interact more with the brands represented” in SL; metaverse versions of established hotels and retail brands garner the most positive reaction. These two points offer a sliver of hope to the metaverse marketer. As to the underwhelming results thus far, I can suggest three factors not covered in Komjuniti’s analysis.

Teleporting is to SL Advertising What the Channel Clicker is to TV Ads

The standard means of travel in SL is point-to-point teleportation, near-instantaneous transit from one x,y,z location to another. (Though it gets more press, Superman-esque flying is mostly used in short, localized bursts to get around obstacles.) P2P teleporting renders billboards and most other location-based advertising useless, and in any case, most SL marketers buy and develop on private virtual islands, where they can fully control the branding experience.

Due to server architecture, however, these islands are only accessible by teleportation, making it the ultimate opt-in experience. Giving marketers the unique challenge of getting Residents to voluntary dive into their ad, and stay long enough for any kind of meaningful brand immersion. So it’s not all that surprising marketers are largely floundering in Second Life: it’s like trying to create ads in a 3D Tivo.

Death by Green Dots (or lack thereof)

Residents navigate the world through a dynamic map; in it, every avatar in-world is represented by a green dot, and this feature has become a quick way for getting a visual read on where other Residents are in the world, and what they’re doing. In various locales and islands, green dots congregate in large numbers, and users’ immediate inference is, if lots of people are going to these places, something interesting must be going on there.

Any noticeable clump of green dots attracts more dots, and as those grow, more follow– a feedback loop colloquially known as “the green dot effect”. Second Life’s most successful entrepreneurs (who’ve proven far more agile and inventive then most of their real world counterparts) sustain this flurry of dots by holding constant events, giveaways, and games, and even go so far to pay Residents to visit. Amazingly, corporate marketers have been slow to replicate these homegrown strategies. (Surely several interns can host regular activities at their company’s SL site? Has to beat photocopying and bagel runs.)

A Failure of Imagination

To play in Second Life, corporations must first come to a humbling realization: in the context of the fantastic, their brands as they exist in the real world are boring, banal, and unimaginative. Car companies are trying to compete with college kids who turn a virtualHomegrown car dealership automotive showroom into a 24/7 hiphop dance party, and create lovingly designed muscle cars that fly, and auction off for $2000 in real dollars at charity auctions.

Fashion companies have it even harder. A thriving homegrown industry of avatar clothing design (free of production costs and overseas mass production) already exists, largely ruled by housewives with astounding talent and copious amounts of time, and since the designers are popular personalities in Second Life (whose avatars become their brand), they enjoy– and frankly deserve– the home team advantage. Homegrown SL fashion

Faced with such talented competition, smart marketers should concede defeat, and hire these college kids and housewives to create concept designs and prototypes that re-imagine their brands merged to existing SL-based brands which have already proved themselves in a world of infinite possibility. Or as the Komjuniti study suggests, they can keep building sterile shopping malls, and continue wondering why Residents prefer nude dance parties, giant frogs singing alt-folk rock, and samurai deathmatches— and often, all three at the same time.

91 Comments

James

I am very upset, i’m glad you posted my blog, but i have more to say then just that!! I am whatever you say i am if i wasn’t then why would i say i am. In the paper in the news everyday i am.

Retro

Who doesn’t love classic cars? Seems everybody does and hollywood has jumped on the bandwagon too. You see them in just about every movie and TV show now.

GetASLFreelancer

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Marc "MSGiro Grosso" G

Kevin Aires,

“Has no one noticed what we’re up to at IBM….”

Exactly!!!!

I think it’s fantastic that IBM has 23 islands, but with almost 300K new users per week how do you expect everyone to know IBM exists when IBM does nothing significant with promoting these sims? Has IBM purchased one ad banner on NWN, SLH, SLU, SLNN, etc to inform the community of this? Have Circuit City and Sears, that sit on your islands, done anything? That initial press coverage has since faded and I personally haven’t seen IBM engage the community so you can’t expect the 5 million that showed up after I arrived to.

I hear your frustration, but I think it needs to be inwardly directed and not at the community.

Marc G

Nat Mandelbrot

I think part of the difficulty in reaching people with marketing in-world has been that it the major brands are focused on getting people to come to their islands. Why not go to them instead? Figure out ways to reach the audience where they are already enjoying themselves, and introduce your brands in a useful way, that actually improve a users experience, instead of just momentarily distracting them.

For instance, there are many great music clubs out there working to represent independent musicians, and struggling to pay their monthly fees to keep the lights on, so to speak. I think there are many, many RL brands that would be compatible with the spirit of these venues, would get major woofie kharma points for supporting them, and could slowly learn about what works and what doesn’t in SL. Plopping down a huge build into the metaverse and announcing “I’m here come and love me!” just doesn’t work.

Prokofy Neva

I totally repudiate this ridiculous study of a tiny sample of 200 people made by one European company, so hyped in the media right now, as skewed, biased, and irrelevant. We’ll need a 100 more studies like this before we can make sense of this very complex and diverse world. While Americans no longer make up a majority of the population, tiny samples of Europeans with an allergy to American-style in-your-face billboard advertising are not representative of SL.

Billboards in fact are used by inworld businesses — and unfortunately for aesthetes — tolerated by a certain percentage of the population. And branding isn’t rejected even when placed as a visible ad — that’s not at issue. If anything, people who say they are “disappointed” in branding or condemn companies for having inactive trade-fair type exhibits actually want more of their presence, not less.

The “green dot effect” only applies to clubbers going to the top events, which are mainly about sex (though “Popular Places” is very misleading, as the venues shown there pay their patrons to remain on the parcel to drive up traffic stats).

Most people explore and interact with other people and events either in real-life similitude along the lines of houses/relationships/shopping or in a “long tail” of more unique-type of activities which they access through SEARCH combined with traffic, as much maligned as it is, and through the Events calendar, which the college kid developers working for the sherpa companies sneer at as “low-culture”.

Normally, Hamlet roots for the people who make up the tiny percentage of feted developers in Second Life working for the companies like MOU that funds his blog. He’s saying “hire the college kids” to make sure that they people he’s been exclusively covering in his blog for years and whom he’s befriended get the lucrative jobs to be had.

Yet, it’s also a rare occasion for Hamlet, who may have suddenly realized what kind of people actually pay the Lindens’ bottom line and fuel his career — he’s recommending the non-feted kids and housewives who make up the vast bulk of Second Life’s landowners and business owners in SL, who run the clubs, shops, malls, and even non-profit do-good organizations that keep others engaged and entertained and involved.

Companies should be hiring these natives who have vast and very useable knowledge about how to get avatars to stick to servers. They’re the people who have gotten very good at doing it, and have survived the end of subsidies from Linden Lab (which used to pay people to entertain others, too), and survived all the purges that the servers inflict on you (bad performance, inventory loss, etc.).

Microtime, paid for in micropayments, is what companies need to be looking at to staff their presences in SL. This is a prototype of the whole Metaverse. Be there while it’s being formed early, to see how it’s going to work. Lots and lots of people want to be online in virtual worlds, and want to monetarize that time online. They have daytime or part-time or even overtime jobs but they want to make some time and effort to be in worlds at an amateur or even professional level of content or experience production and management. So pay them. Something. Populate your empty server with people and events and then other people will come.

The old media corporations have a historical opportunity to become this century’s Medicis and shape the culture of the next century if they don’t lose momentum.
http://www.secondlifeherald.com/slh/2007/03/the_medicis_of_.html

alan p

Suspected this to be the case before these survey results, we blogged sceptically about Brands entering 2nd Life marketing last year starting with this one.

I think the Media brands have got some buzz (BBC Radio 1 for eg) but flogging mundane stuff in 2nd Life just can’t be that sustainable as you note – unless you’re the Ad agency taking the fees off the Brand of course ;)

csven

I wish Coca-Cola hadn’t been included in that list of companies, especially since there are arguably other, better examples to cite. As far as I’m concerned, that one occasion hardly qualifies as a genuine effort to take the corporate brand into Second Life. As reported by the author himself, the Coke brand “indirectly sponsored” an event and the organizers brought it in. Sounded to me more like Coca-Cola just didn’t say “No” to what these people wanted to do (perhaps somewhat like how U2 hasn’t said “No” to having their likenesses and names used and their music streamed in to virtual concerts showcasing other brands). Big difference, imo.

This isn’t the first time it’s been reported that Coca-Cola has been “attracted” to Second Life. Question I have is: Why?

Ion Griffis

“It’s a classic case of marketer meets gamer. The two races just don’t get along”

I concur, big companies just don’t understand gamers at all and don’t seem to want to listen to their needs or desires.

Though I would never consider SL a community of gamers.

Kevin Aires

Errr…. lots of people have mentioned that almost all RL brands in SL just have static islands with no avatar interaction… Has no one noticed what we’re up to at IBM…. We have about 23 (last count) islands with more real employees than I can keep tabs on doing real business projects and can often be found out and about updating their builds. Take a look :) search for IBM 1 – 12.

michele leidi

the approach of the companies in SL is too near to the their early strategy for the web presence.
Unfortunately there is big differences ( other world) ,one of the difference is that once you have completed your web site , most of the job is done, in SL once you have completed your Island and building , most of the job is to be done.
The interaction is indispensable to manage a presence in SL and you need a qualified person to manage Avatar in your SLURL.
Metaverse need experiment and company that seek new way to discover the potential of prototyping or new marketing law.

Eric Rice

I think it’s probably time to evolve past ‘second life-ism’ and move on to virtual worlds in general, including taking a retro look at the game space. I’ve seen autozone and cingular and burger king in games for a while not.

And come on, you think Sony is gonna have a problem marketing to people in Sony’s own secondlife thing?

Stephanie

I follow the conversation quiet heavilty today and as a statistic student I can say that all the fools speaking about significant values have really no idea about what they are talking –

I have read the SL article weeks ago on DMG and as the guys from Komjuniti or whatever their name is explain it was hard to find avatars for Q&A!

So what’s the deal – there are only 30.000 people in per day and even TV programs for millions are just based on viewer behavior of 1000-1500 people.

These two facts makes it worthwhile just to listen since there is no real data in the market so far –

probably dave m and nick wilson are working for advertising agencies not knowing anything about what they are talking –

Cheers Steph

Dave M

200 respondents is not even statistically significant when there are over 5MM SL residents and at least 1.5MM active ones. I don’t think you’re giving Coldwell Banker enough credit. They’re the only real life brand I’ve seen that are in SL as more than just advertisers. At least they’re providing a legit SL service by offering discounted land, and actually giving you a structure to put on that land. Much better deal than dealing with the land barons.

David Orban

Thanks for this great coverage, and critical view of traditional marketing efforts in Second Life! The faster the ‘Trough of Disillusionment’ comes for SL, after the media induced ‘Plateau of Inflated Expectations’, to say it with Gartner, the better it will be. General Virtual Worlds, like Second Life, deserve to be recognized as a maturing platform for social, technological and marketing experimentation, where the interaction has to be very carefully designed or evolved to be sustainable, meaningful, and valuable.

Marc "MSGiro Grosso" G

WJA,

You know and I know that most of the integrations are being completed by what amounts to a glorified software development shop who have no idea what to do once their builds are completed. On top of that the brands are seduced by the eye candy that these firms produce and don’t bother to dig deep into the issues that matter such as sustainability and ROI (Heck Reub even said last week that we shouldn’t pay attention to ROI in SL. Huh?) and more importantly how to create a positive brand experience that is engaging and will create loyalty amongst the general population.

I’ve said this time and time again, it’s not the brands that the community dislikes, but rather the experience. On top of that is the worse case scenario that the community has no idea your even there, which boils down to the basic principles of promotion.

Look at RatePoint. They are a legit corporation albeit a young and hungry start-up. They purchased a significant amount of banner space on your blog, New World Notes, among others, have worked with us to hire an in-world promotion team and built a simple cafe complete with 4-5 live music shows/week just to give the community something cool to do AND have hired residents to manage the cafe and book the artists. In three short weeks they are generating far more traffic than GM, Nissan, Scion, Reebok, Dell, H&R Block, Sony-BMG and every other big corporate giant. To kick a little more dirt in the eyes of the MegaCorps RatePoint is already asking “What can we do to improve this and make it better?” I can tell you, since we built it, their entire SL strategy and execution was completed at a fraction of the cost of what the MegaCorps invested. I don’t know what kind of Kool-Aid they’re being fed, but to them SL might as well be called Jonestown.

I leave you with this. What’s the point of building the most extravagant and expensive widget in the universe (or in this case metaverse) if nobody knows about it?

Marc

Dizet Sma

There’s several reasons why real world marketing needs a massive paradigm shift to work in Second Life, some of which are well covered in the article. My take on the major problems is:

1) The most popular areas by visitor are almost exclusively ‘xxx’ locations where advertising would be almost totally ignored and, amusing though it sounds, I can’t really see a “This Orgy Room is brought to you by Coca-Cola” getting past the company lawyers, but Playboy might not have such a problem!

2) There is a limit to the benficial effect of the ‘Flash Crowd’ aka the ‘green dot effect’ which is exactly that described by Larry Niven in his 1973 story of the same name – the sim gets laggy at fairly low levels and eventually the tp system stops working. Even if a company gets the Beatles to reform with Jimi Hendrix on guitar to publicise an event in sl, a vanishingly small amount of users would actually be able to attend. Companies need to got back to long, slow campaigns rather than a massive spend on shock and awe tactics. AOL Pointe in sl seems to have grasped that idea, for example.

3) There is no way to hold onto the idea of copyright and uniqueness between RL and sl. If users want something tangible such as a guitar, a car or an aeroplane to take radical examples, how can the advertisers persude us we want an ‘official’ Fender, Ferrari or LearJet when the means are available to make your own, indistiguishible from the original, or to find someone who can do it for you for small(er) cost.

Competing against this would either involve the comapnies driving their sl prices close to zero to generate sales or to use the L$ cost of an item against the RL cost, so buying a sl Fender for L$500 gets you a 10% discount against the RL model. Hmm, maybe I should copyright that idea right now…

4) The companies who could engage best with sl residents i.e the tech and design companies are not exactly thick on the ground. I agree that the existing designers should be allowed to design some sl catwalk shows or expos. And how about running some type of ‘Be a Versace / Gucci model’ like the reality TV versions? Involve the movers and shakers of the sl design world as judges and podcast / blipvert episodic chunks out to YouTube / blog channels…

Hey, that’s two ideas, maybe I should be a marketeer?

Vincent van Wylick

Nice overview for the SE newbie-marketeer, thanks. There definitely seems a lot of space left for out-of-the-box thinking and using user-generated marketing.

Kosso

I for one certainly hope the real-world marketers don’t replicate home-grown methods for the ‘green dot effect’.

Camping chairs are the scourge of Second Life.

As long as these companies ‘engage’ the visitors with information, products or just sheer fun, then there should be no problem.

The most important thing is they ‘understand’ SLers and their needs. Most larger SL agencies employed by the big companies have hired some great talent to define and deploy their brand in world.

The builds tend to be good quality, but not always the ‘engagement’.

Many of these islands which are owned by big brands will certainly end up being ‘Virtual Theme Parks’ imho – where the theme IS the brand. So, it’s up to them to avoid that happening. It takes a lot of effort.

Nick Wilson

“extensive” – Are you kidding me? 200 people is extensive?

SL marketing has a loooong way to go, but I could get 70% of respondees to admit to being a small teapot by asking the right questions.

Slow news day?

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