Posted by
Adrian Rowe
December 21st, 2008

Virtual Worlds

by Adrian Rowe


Imagine a world where you could be astonishingly attractive, change your appearance completely in seconds, and where you never got sick or needed to eat or drink? A world where you could buy a house for less than £1, and locate it on a sundrenched beach or a snow-capped mountain, or just park it in the sky. A world where you could build dramatic towering sculptures, design your own fashion accessories and fulfil your creative urges. A world where you could fly, or teleport instantly to regions that are changing and growing every day.

Sounds interesting? This is Second Life, one of the most popular virtual worlds on the Internet and a place that is drawing attention from many of the world’s biggest brands, including Amazon, BMW, Vodafone, Sky and Coca-Cola. In fact, more than 300 major brands have created a presence in Second Life, attracted by the demographics of its virtual residents. Despite its Californian origins with San Francisco software company Linden Labs, Second Life has a truly international community, with 75% of residents outside of the US.

Unlike virtual gaming communities such as World of Warcraft, Second Life has attracted well-off, thirty-something white collar professionals, both male and female, especially from the creative, media and software industries. In marketing terms, a classic ‘early adopter’ profile of influential consumers, which explains why many major car manufacturers, including Nissan, Toyota, BMW, Mercedes Benz, Vauxhall and Mazda, are already ‘in-world’.

Longevity and stability

Although Second Life really hit the headlines in 2007, when registrations reached more than nine million, the platform was launched by Linden Labs in 2001, and its longevity (in Internet terms, at least) and stability contribute to the attraction for marketers. Whilst Facebook and other social networking applications may have been drawing more news coverage and marketing dollars in 2007, Second Life seems to have greater long-term potential for marketing investment.

One challenge that Linden’s developers need to tackle is the steep learning curve that ‘newbies’ face when first landing on Orientation Island, the welcome area for Second Life. Appreciating the richness of experience only begins once a newcomer has mastered the basics of a sophisticated menu of controls. Learning to move, fly, teleport, converse, search and purchase items is challenging and time-consuming, and this is reflected in the fact that only around one in ten of those who register an avatar become regular inhabitants. Nevertheless, more than 1.3 million avatars had been active in the last sixty days at the time of writing (February 2008) from a total resident population of 12.3 million, and at any time of day or night, as a result of its success across time zones, Second Life has around 50,000 residents in-world pursuing their hobbies and interests.

Virtual shopping

Remarkably, shopping is a key pastime in Second Life, which has a thriving economy based on Linden Dollars (L$), trading in every imaginable type of virtual goods. Avatar appearance is important in the social culture of Second Life, and around a third of the one million US dollars spent every day (the current exchange rate is 1US$ to 268 L$) goes on virtual clothing, avatar bodies, hair and accessories. This has resulted in a virtual fashion industry, with some designers able to make a living exclusively in-world.

Shopping in Second Life is made considerably easier by a number of supporting websites that offer eBay style functionality for searching and buying virtual goods. Notable among these are SLBoutique for fashion and SLExchange for a wider array of merchandise.

A further third of transactions are generated by virtual land purchase or rental. Second Life’s first ‘real world’ US dollar millionaire, Anshe Cheung, made her money from virtual land and property development. Although registering an avatar is entirely free, many who enjoy the experience elect to upgrade to a premium account, costing $9.95 a month, in order to be able to buy land and build.

The Metaverse Messenger

The Metaverse Messenger

Linden Labs estimates that, by the end of 2007, around 55,000 virtual businesses were actively trading in Second Life, although the numbers making a sustainable living are likely to be considerably smaller. Some of the most popular areas in Second Life are the virtual shopping malls. Businesses can advertise their products through the ‘classifed’ section of the search menu that is accessible to every avatar, as well as on SLExchange and SLBoutique. Some also choose to advertise in the many virtual newspapers and magazines available to residents, such as the Metaverse Messenger, Second Life Herald, Second Style and The Avastar. Some real life brands are also beginning to advertise in these publications and sites, including L’Oreal, Vodafone and First Direct.

Innovative brands in Second Life

TUI Holiday Island

TUI Holiday Island

Many more brands are experimenting with a presence in Second Life, ranging from a simple adaptation of their real world presence such as a store (Armani, Boots, Adidas), through to more complex ‘virtual attractions’, such as Vodafone’s InsideOut Island, Sky’s virtual studio and newsroom, or travel operator TUI’s holiday island. It is not yet clear what the metrics for success in virtual worlds should be, but most brands are driven by the potential for publicity, a desire to enhance their status as innovators, and perhaps a recognition that such communities are influential and will become an important future route to market. Both Gartner and Forrester have supported this view in recent reports. However, several Second Life commentators have noted that, while brands are creating a presence inworld, few are putting enough effort into exploiting the rich communications structure to advertise their sites. Consequently, many of the branded locations are receiving few visitors.

Educators adapt to virtual worlds

Educators Adapt to Virtual Worlds

Educators Adapt to Virtual Worlds

One important factor likely to influence the future shape of Second Life is the number of educational institutions establishing a presence in-world. More than 100 universities and colleges worldwide are already present, and Linden Labs encourages their participation with reduced rates for land ownership. Educators are beginning to appreciate the potential to deliver more dynamic lectures using 3D constructs, and students are ‘virtual world aware’ as a result.

Museums, galleries and other public sector bodies are present in growing numbers. Charities have also seen the potential in Second Life – Save the Children organised a Yak Shack event that raised thousands selling virtual yaks, and activists on Better World Island have created a virtual Camp Darfur, to highlight the plight of refugees. Politicians too, attracted by the demographics, are holding virtual events, and many musicians have staged concerts in-world, including Duran Duran, Suzanne Vega, Ben Folds Five, U2 and even the Royal Liverpool Philharmonic Orchestra.

There are currently dozens of ‘non-game’ virtual worlds – others include There.com, Kaneva, Habbo Hotel and Whyville. Many are aimed specifically at younger age groups, which may drive future growth. How these ‘metaverses’ will evolve, and how marketers should respond, is hotly debated. One key to success will be how well brands can integrate real world and virtual world experiences. For the moment, it seems vital that the marketing community at least maintains a watching brief and, perhaps more important, dips a virtual toe in the water.

If you’d like to see how you can exploit virtual worlds… why not give Red C a call on 0161 872 1361 or click here


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