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Does Virtual World Advertising Work?

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The debate over the value of advertising in the metaverse just got a lot more interesting. Earlier this month, I noted a survey which suggested that real world marketing in Second Life wasn’t working. That still seems largely true, but now a new study from Seattle-based Global Market Insite strongly implies that it’s not from lack of interest— which is, according to the firm’s report, surprisingly strong.

When asked, “Are you more likely to purchase/use a brand in real life that is represented in Second Life?”, 37% of SL users surveyed by GMI responded “Definitely”, while 41% responded “Maybe”. These numbers are in marked contrast to the report from the Hamburg-based research firm Komjuniti, in which 72% of SL users polled said they were disappointed with marketing efforts in Second Life. And where Komjuniti’s data was based on interviews with 200 SL Residents, GMI garnered this figure from 479 Residents, selected via a double opt-in process, GMI’s Jensen Gadley tells me, after e-mailing me their full raft of data.

Instead of asking the respondents what they thought of existing SL marketing, says Gadley, GMI asked them what they thought of it in principle. “The Komjuniti survey specifically asked people what they thought of advertising campaigns in Second Life,” he explains. “The problem is if you ask anyone point blank if they like advertising, in almost every medium, people are going to say no.” Instead, says Gadley, “We decided that since Second Life is such a new technology, asking people what they think of specific marketing and branding techniques wouldn’t tell us much about the platform’s potential.”

With that angle of attack, GMI came away with decidedly different answers. So the problem with SL marketing doesn’t seem to be rejection of advertising in general, just indifference to the kind of virtual advertising they’ve seen thus far.

These figures, of course, aren’t likely to resolve the larger debate over Second Life’s comparative value as a marketing platform.

After all, GMI’s study is taken from an extensive, multi-country survey of 9,529 respondents who were asked about their perceptions of Second Life, with only 5% reporting that they even had an SL account— hence the 479 who gave their specific responses to SL marketing and other topics. What’s more, 87% of those surveyed haven’t even considered creating one. This points to the relatively small number of total SL users, in relation to other online worlds— at this writing, about 500,000 regularly log in on a weekly basis. (Gaia Online, by contrast, has 2,000,000 monthly users, 10-20% of whom participated in a recent New Line marketing campaign, as compared to the 1% or less who’ll typically engage in an SL-based campaign.)

On the other side of the ledger, proponents of SL marketing are likely to point out the advertiser-friendly demographics compiled by GMI— 65% of Second Life users polled have a reported household income of $54,000 or more; 51% of them log in 6 hours or more a week.

So the debate over the ROI on SL advertising continues. To be sure, the real short term tension is desire versus reality. Because with few exceptions, most corporate-sponsored sites in Second Life are sparsely and intermittently attended.

And for the next year, at least, even the most effective Second Life campaigns will meaningfully reach an audience numbering in just the high five to mid six figures. (In other words, it’s comparable to boutique advertising on a popular blog.) And as SL marketers for the film 300 recently found out, that totally leaves aside the question of whether advertisers are comfortable with putting their products in all the surreal or disreputably grabass situations that Second Life’s content creation tools make possible.

(This is just a sampling, by the way, to what is easily the most extensive survey of consumer perception of Second Life I’ve seen thus far, everything from real world family demographics to moral boundaries for avatars— read GMI’s summary, and note the contact link there to get the whole thing.)

Update, 5/1: The full Resident opinion portion of the GMI survey is now on my SL blog.

6 Responses to “Does Virtual World Advertising Work?”

  1. Hi,

    Insightful research. I agree.

    In my view McLuhan is relevant here: the medium is the message. To me this is all about tailoring your key message to the particularities of the targeted medium. What are the distinctive features of Second Life relative to other media ?
    Second, what is the 2L target audience like ? What is their mindset ? What are their values ? What are they doing in 2L ? What are their expectations ? And how can corporations in general and advertising in particular be relevant in terms of this mindset of the residents ?

    Those are key questions in my view. Examples are companies in 2L who enable and facilitate residents to create, to remix content and ads, to customize, to share and especially to learn. Smart advertisers deliver tools, amateur academies and workshops besides unique experiences leveraging the unique features of Second Life like the 3D view and its open nature.

    Second Life is web 3.0 and is in essence about transformation, eLearning, identity, self discovery, fun/entertainment, social networking, peer production, creativity and imagination. That is a slightly different mindset than standard 2D web which is less open, less creative and less a platform. The loyal/innovative users think different relative to other media.

    Simply, copy / paste a traditional marketing or advertising method or campaign from one medium to Second Life is destined to fail in my view.

  2. The potential of advertising in Second Life is so new and largely untapped. I’m sure in the coming years it will evolve and develop to something a lot more worthwhile for businesses and users a like. SL is only going to get bigger and better and those busisnesses that don’t get on board are going to miss out in the long term.

  3. Nice work Wagner.

    I’m beginning to just now see tools for measuring campaign ROI just now (new vendor / new product – very sharp product), and coupling the ability to measure campaign ROI in SL with the Gartner Report just released (which suggests that the metaverse interface will be ubiquitous by 2011) I think SL will be a lot more interesting to corporations in a very short time.

    I’m compiling a list of multi-national corporations who are / will soon be in SL. I’ll be posting the list soon at my blog.

  4. An important issue I’ve not seen addressed yet is this: Those companies willing to allow site users to “mash up” their trademarks and copyrights could thereafter find themselves having a more difficult time protecting this valuable IP…because they’ve implicitly if not explicitly allowed others to do what they want with it.

    As for whether or not advertising is such “environments” is worthwhile or not, it’s looking like the answer is coming in that it depends on at least the following 5 factors:

    1. Who you are.
    2. What you’re selling.
    3. How you’re selling/promoting it.
    4. How you’re measuring “direct” ROI.
    5. Whether you care about difficult-to-measure “indirect” ROI/brand value increase/s.
  5. Matt Moran

    Maybe firms advertising in SL should try committing to it properly rather than these toe-in-the-water efforts I’ve been seeing. Reebok did a reasonably good job except that the prim sneakers they were selling sucked compared to most of the footwear made by people who’d taken the time to learn how to craft decent prim footwear – I’m thinking Feri Beckenbauer as a good example here though he’s not alone. Nissan did a great job with their Nissan Island, and I’d be tempted to buy the car they made available in SL – except that in RL it’s only available in the US. Bear in mind that SL is international even if it’s based mostly in the US. If they’d done a similar job with a car they were planning to release in the UK/Europe, I’d have a chance of actually buying the thing at some point.