Wednesday, April 9, 2008

What would a company have to consider to invest in the virtual world?

“Pricing for new islands will drop from US$1675 to US$1000 before the month’s end, easing the entry into Second Life for some larger builds.
Linden’s primary source of income is a monthly charge to landowners called “tier,” and the increase in overall land volume can be expected to boost the company’s bottom line. Inflating the land supply comes at a price though, as new land both lowers the worth of existing customers’ assets and decreases Second Life’s population density…”(Reuters)

Oops, they did it again, as Winter also mentioned on her blog, the LoL (I will use the same acronym here) have once again spread a sudden announcement about the decreasing of the land prices, for being able to increase the land supply.

As the negative news, about this particular virtual world, is dropping in daily, I was thinking how it would be interesting for companies to invest in this world as this is what it is all about for LoL.

By giving you an avatar and a sense of place, users don't just interact with the published data, as they do on the web, they are actually driven by the nature of the human mind to first, interact with each other. It’s a well established fact that in virtual worlds people observe the same social conventions of personal space as they do in their own cultures. Discussion between avatars is much more civil and subtly negotiated than discussion on chat rooms or bulletin board systems. People are programmed to react to people first, and react to them in specific ways.

Most success stories in SL® are based of, either, providing land (a place to socialize), clothes (something to talk about / an essential part of defining your personality for socializing), animations (critical for expressing ones self in a social context), or social objects. Non social objects (building tools and vehicles) are popular, but are either used by a small group of creators, or pretty much used only for novelty until the limits of the technology smacks the users in the head.

So as far as I can see, the challenge for real world brands is to do and to be focused on one of those categories. But knowing the medium and offering differentiated value alone will not be sufficient and successful; they will also need to know who they are dealing with: the audience.

When I look at it from a RL perspective view, I would say that the majority of residents in SL® are socializers, who are satisfied and successful in a text only environment, although we have voice, which is not so often used to socialize. So, the residents are more interested in a text based chat than going to a RL class, or visiting a bar, or doing a hundred real life social activities. They are looking for a real other life, because the virtual world offers them the freedom to reinvent themselves. But if they are dissatisfied with reality and the entire brand in it, there's no guarantee someone can offer them anything in virtuality. That is where the challenge is. However, there are just as many (if not many more) for whom their SL® is a more whole hearted rejection of the values of real life, as Furries and Goreans, who are extreme non conformists. It seems that most of these people who play with different avatars or different avatar are really adopting a second personal identity. This is not a case of roleplaying as it is usually couched, but more of a singular adoption of presentation which is not possible (or acceptable) in the real world, but often also linking that identity with their RL identity. If you do have a brand that can be made relevant to the avatar of how a person wishes to be, then it should have tremendous stickiness. If the Goth or Vampire community were offered quality clothing under a brand they can also purchase in RL I think you would start to see the synergy that folks are looking for.
I think a perfect example of good marketing is “Evian”, who is giving free skins all over the grid, which reflects to the advertising they spread about the perfect skin you will have by drinking the water.

Knowing the medium, knowing the audience and offering something unique would then be the basics for starting or bringing a brand in the virtual world. The only problem is that the folks trying to use these principles have no real, organic, 'lived' experience of SL®. They are trying to orient themselves based on a PR machine that does not understand itself or is actively trying to deceive or SL® residents who have some very specific technical skills and are trying to market them regardless of how relevant they are. It may simply be that when you honestly look at those three dictates that it may not be worth getting your brand into SL.

As conclusion, I think you may well say that it is not so obvious to start or to bring your brand now a day in a virtual environment, and to be successful in it. We have already seen companies who started once through the front door, disappearing quietly through the backdoor.

Although I keep saying that the virtual world is the future, not only the technology would have to improve, but also the communication to the RL, to make the virtual world appealing to world companies, who are willing to invest their money, their time, their employees, their popularity in something that is today, and we have to be honest, not worth to take in consideration, with all the latest news, hick ups, crashes and miscommunications we see.


Winter said...

Great post Looker.
I think the main thing companies are forgetting when they bring their products to the LoL World is that this world is not RL.
The marketing strategy should be completly different and adapted to the surrounding reality (or is it virtuality? Now I got confused! hehe)
New ways to approach should be developed and no company who wants to have its presence in-world can expect to see their sales increased in RL just by being there.
Customer confidence and brand recall is what to take from SL, nothing more nothing less...
But then it is just my opinion ;)

Looker Lumet said...

At the end the question would be, are we waiting for advertising in SL, as I now already walk away from the television with all those advertising blocks?
But as I said, when it is well thought through like the "Evian" campaign, I have nothing against it.

Winter said...

That is what I meant Looker. People in S*d L*e don't want to have their screens flashing with ads... the thing should be more subtle and subliminar ;)