Brands in Second Life
Take it seriously. It may seem like a game to you but to many of the inhabitants of Second Life it is anything but a game.
I started at the Adidas store, but no one was there amid the perfect racks and in-store displays, I then headed over to the larger Reebok store. One person was there, but they were leaving. American Apparel had a nicely laid-out store with its merchandise well presented and unobscured, thanks to the absence of shoppers.
Where was everyone? These are global brands with extensive retail experience and their stores were empty in prime shopping time. The consumers were around, they were just in home-grown stores buying brands with names like VektorWear, Shiny Things and Cytranized Designs.
And the consumers weren’t walking the high street of a bricks-and-mortar city, they were shopping in Second Life, the digital social networking and co-creation phenomenon that many brands around the world are trying to figure out how to get involved in and benefit from.
Started in June 2003 by San Francisco company Linden Labs, Second Life is the current poster child for a digital marketplace that many believe will become increasingly important for brands. By mid-June 2007 Second Life had over seven million members, about 90 percent of whom had signed on in the preceding nine months, and investors that included eBay founder Pierre Omidyar and Amazon CEO Jeff Bezos.
It is, however, not all plain sailing for Second Life, or to refer to it by its popular acronym SL. The average 30,000+ people on SL at any one time (June 2007 average) has put its infrastructure under pressure with resultant sluggishness, crashes and key functions like search often not working. Despite these problems, industry insiders remain positive about the future of SL and compare its problems to the teething pains the Internet experienced in the early 1990s.
Getting started in SL is not difficult and involves downloading a browser-type interface and then following simple instructions to create a 3D digital persona, or avatar, that you move around SL using keyboard and mouse controls. Communication with other SL members is currently via text but voice communication is coming.
Although it has the look and feel of a video game, SL differs from other online multiplayer games in two keys areas. Firstly, instead of traveling in a digital landscape constructed by the game’s programmers the inhabitants of SL design and construct their own worlds which are connected by a Star Trek-type teleporting function. Secondly, inhabitants own the digital creations they build or acquire and can sell these to others in SL.
Transactions within SL are done using Linden dollars, a virtual currency that is purchased with and convertible into US dollars at a fluctuating exchange rate which in mid-June 2007 saw USD 1 buy 265 Linden dollars. This in-world trading, including virtual land rentals paid to Linden Labs, resulted in a daily flow of transactions worth about USD 1.6 million.
SL says about 40,000 individuals are making a profit doing business on SL and the most successful handful are earning in the hundreds of thousands of US dollars annually. Whilst the profits may be attractive for individuals, they are currently not the reason that brands are making their way into the virtual world.
Creating brand awareness is a primary objective for brands like Adidas, Reebok, American Apparel, Sony BMG, Toyota, Nike, Reuters, Coke and Sony Ericsson. But their virtual stores are largely empty as SL inhabitants favour brands created and sold within SL.
A 2007 survey by Komjuniti, an agency that develops and manages brand communities, found that many real-world brands were failing in their SL efforts with 72 percent of respondents saying they were disappointed with the activities of global brands in SL. A third of respondents were unaware of the brand’s presence in SL and 42 percent said it was nothing more than a short-term trend.
Several reasons can be identified for the lack of impact by real world brands.
Firstly real-world traditional marketing and advertising tactics don’t translate well into SL where no effective advertising channels currently exist. Global brands can outspend one another building fantastic stores and structure but then the opportunities inside SL to advertise their presence are very limited. Typically brands first announce their SL presence in the real world and create initial interest that way.
Secondly, brands tend to only replicate their physical world offerings in SL and see interest in their virtual store quickly dissipate, as the product line remains unchanged. With the majority of personal items for avatars costing a couple of dollars at the most, digital consumers quickly buy what they want and move on giving the brand no time to build a relationship with their customer.
Thirdly, there is a degree of indifference among many SL inhabitants to the presence of big name brands and even a degree of hostility as some inhabitants object to the intrusion of commercial brands into their self-created digital world.
Whilst there are no hard-and-fast rules about how brands should create brand awareness and understanding in SL, the following guidelines – based largely on observations of how home-grown SL brands and some real world ones successfully market themselves – provide a good starting point.
The first thing is to see SL as a constantly evolving story rather than a technology. Many of the inhabitants create avatars as they would like to see themselves: there are virtually no short and fat avatars, but, interestingly, many see themselves as furry creatures. Then these avatars are often inserted into fantasy or role play environments ranging from medieval cities to nightclubs to inner-city slums to space stations.
Brands that do well in SL understand this and adopt an understated product placement approach inserting their brands into the role play environment. For example gothic fashion is a perennial favorite in the medieval or Lord of the Rings-type environments, sport wear in a basketball environment, and music labels would fit into the vibrant music scene. Understand and integrate into a role play and your brand is more likely to be accepted.
Secondly, have multiple presences and not just a single flagship store so that your brand is more easily discovered. Remember that the search function in SL is not that great and there aren’t really channels to advertise your presence. A small stall alongside others (many environments have a small market area where theme appropriate items can be purchased) negates the big brother image widely despised and offers the ability to link people back to the main store.
Thirdly, innovate and constantly produce products that the SL community can try out. Things are a lot cheaper in SL than the real world and having created the perfect avatar
participants are keen to dress it accordingly or own the best accessories like cell phones and sunglasses. Offer multiple variations of the product as inhabitants in SL are
more likely to try on outlandish colours and designs that they would avoid in the real world. Products don’t have to be sold, Coca-Cola hands out free cans of its soft drink for thirsty avatars to carry around.
Fourthly, watch and learn how inhabitants interact with your brand. Some observers believe SL is the perfect petri dish where new products and offerings can be tried out before releasing them in the real world. Starwood hotels and resorts used SL to gather feedback on a new hotel.
Fifthly, SL is a two-way street with the virtual world able to exert influence on the real world. Aimee Weber, the designer behind American Apparel’s SL store said in an interview with the Financial Times that she predicts “the real fashion world will have a season or two in the near future that will be advertised and heavily influenced by the virtual worlds.”
Research done by the US-based Center for the Digital Future has found that 43 percent of people using online social network sites like SL felt as strongly about the friendships they made online as they did about real-world friendships and, on average, 30 percent of these virtual friendships result in real world meetings bringing with them SL experiences in the real world.
And, finally, take it seriously. It may seem like a game to you but to many of the inhabitants of SL it is anything but a game.
Patrick Collings is a partner in Sagacite Brand Agency and author of the Brand Architect, an internationally respected blog on brands and the marketing services industry. He has been at the forefront of new media development in South Africa for the last eleven years.