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July 30, 2007

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Mark Forman

Are you being too harsh? No, I don't think so. In any case, this is your blog and you are certainly entitled to voice your opinions here. I think it is unfortunate that many people base their decisions on Second Life's value on whether or not their business experiment was deemed a success or not. It seems to me that they didn't get what they felt was a reasonable ROI so they start slagging it as a waste of time that is all about sex and gambling(well gambling is virtually gone).

I think SL book promotion would be much more satisfying to an indie (classic Long tail) author that doesn't have the luxury of a promotional budget for an international tour. In fact your book seems to be an anomaly-the conditions you talk about and position you promote contrasted with the success of your book are somewhat disparate paths. For that type of author I think he and fans would have a much richer virtual experience since that is probably the only way they'll ever meet.

Ian Betteridge

To answer your questions:

1. Without knowing the budget, that's impossible to say. However, if you spent tens of thousands of dollars on a single event, then probably not. But, having said that, if you spent tens of thousands of dollars on a single event, you overspent: you certainly didn't need to build an entire presence in SL to have a single book promo. I've talked before about corporates being too obsessed with building their own location in SL to actually get decent ROI or engagement out of it, and I suspect this is a case of exactly that.

Of course, if you're rolling the entire cost of Wired's SL build and presence into a single event, then it also simply shows you've been underusing that build.

2. With the SL population now much larger, it's supporting a wider range of diverse media. Where NWN was once the only channel, it's now one of many: and for a niche publisher, other channels might be more appropriate and offer better ROI. And, given that the interest in SL has grown hugely since you did your talk, I suspect that you'd find even a smaller outlet would get pretty similar results if you did the same event now.

tartle

Without really knowing how you did it....In my mind you did what a lot of big companies do go for the big iteration from idea to launch without an iterative Design Journey on the way. There are two paths to the journey: validity... does someone like it and how can I understand them and make it valid to two people or more; viability... can we make currency from it (money, buzz, etc. however we define our currency). If we only do viability we are likely to "fail". if we do validity its art and if we do both we do small iterations of understanding to invest in the next loop!

Raindeer

Chris, I don't think your being too harsh. James Au in his 'seductive long tail argument' sums it up quite nicely, a comparison should be done on the basis of: "length of engagement in SL, versus other ad mediums; quality of engagement, in terms of brand immersion and recognition; quality of potential participant, considering Resident demographics as content creators, bloggers, early adopters, etc." and "All that to one side, it is still nevertheless true that SL developers have yet to create an unambiguously compelling and unique example of real world advertising that is massive or effective enough to convince honest skeptics. (As I believe Chris and Frank ultimately to be.)" James believes that your opinions should be debunked and that a compelling case would prove him right. I however believe that the fundamentals are stacked even higher against Second Life than your articles already show.

There are certain rules that govern why a new technology becomes popular or not. These rules are deeply rooted in economics. The main rule is:
- It makes some part of your life easier/better (Optimizing of utility functions).
It does this by:
- Lowering transaction costs for performing a certain function (Looking up train timetables has a much lower transaction cost than looking it up in a timetable book or calling a number)
- It grants you more control over your choices. Though you might spend an equal or higher amount of time and money doing what you were doing before, it allows to reach a more optimal solution than you could before the introduction of the technology. (Travel sites, housing sites etc all tend to swamp you with options, but many people like that compared to the old situation)
- You receive a higher level of service compared to the old situation.
- It achieves some kind of network effect. Adding more users to the network increases the individual and total utility function of the nodes in the network at a higher than linear rate.
- A new niche emerges big enough to cater to your needs (look at the long tail).
All in all it's about lowering costs and changing utility functions.

Now what happens if we look at Second Life and similar online worlds and measure them along this yardstick of making your life better, lowering costs and changing utility functions.
- The main thing Second Life is good at is bringing people from different parts of the world together and let them interact in a relatively natural way, like in First Life.
- A second thing it is good at is quickly building 3 dimensional representions of objects and allowing people to see and interact with them.

Now compare SL to some of the other applications we use the net for and we see why it is not a big a hit as some people would hope it would be for advertising and other applications.
- For finding information and weighing different options etc, the plain old Web 2.0 is better and quicker. You go to Google and from there its two clicks away to the right destination. As various studies have shown... people are not willing to wait more than a couple of seconds to find the information they are looking for. In Second Life Just getting somewhere, orientating, interacting etc takes minutes. So if you want to find information, disseminate it the Web wins. Same thing goes for buying real stuff.
- For communicating Second Life is bound by proximity in the Second Life world. It's almost like the real world in that regard. So in many situations it gets beaten by instant messaging, email, telephone etc. as a way of communication. It does have a bonus when it comes to chatting up complete strangers by allowing only a limited amount of people to step up to you (whereas on a chatsystem women often get swamped) So as a virtual bar it has some positive sides.
- If one wants to interact with customers in Second Life, it is not unlike opening up a store on the main street and it should be run as such. 24 hours a day people should be attending to the shop. You need the right people there, they should be knowledgeable etc. There are no Coca Cola information stores on the main street, because it would be too costly for Coca Cola to do so and there doesn't seem to be a benefit, compared to their current way of doing business. Second Life might lower these costs by allowing you to open up one store and reach the world, but the question is what exactly would be the added bonus for Coca Cola, Fannie Mae, Home Depot etc of having a virtual store/information boutique that needs to be manned 24x7 compared to a combination of Website, information phone line (or IM on a site) and if they have such a thing a physical store. That question is very hard to answer.
- As an advertising medium Second Life can house billboards. The advertiser hopes its as busy as Times Square or as well visited as Wired.com. The numbers are not such that this seems to be a very attractive proposition. Not too many eyeballs and not always the right demographic, plus like in Real Life people need to bump into it. The more Second Life grows the smaller the chance of bumping into the advertising (the reverse of network effects) So Real Life and Google Ads are probably a better way of spending the advertising budget for many.
- Second Life can also be an advertising medium by realising a 3d representation of your products. However a website can often have the exact same possiblities, plus the added bonus of being able to control the look and feel of the experience.
- Advertising through immersive mediums in Second Life (scavenger hunt, adventure type) is limited by the environment of Second Life itself and the amount of users it has. It's probably more effective and efficient building that world in Flash, without having to deal with all the side effects Second Life might have.

So where does this rant bring us. Second Life's usability for making things better is mainly limited to those situations where we want people to interact in a bar like fashion, but without being in the same physical location. A virtual book signing might work, but a well moderated chat session on Amazon might be alot more effective as it could let people join easier, without making avatars etc and still allow for it to be streamed and stored on Youtube and people could actually receive a signed copy of the book they bought. (BTW why doesn't Amazon have interactive sessions with writers? Or did I miss something)

A big advertising campaign however is probably much more effective when using flash and other such technologies on your own site combined with a proper on and offline campaign.

It's hard to see what kind of bonus SL has when it comes to working in project groups compared to an adequate set up of videoconferencing, group wiki's, IM etc.

All in all, the conclusion of my rant is: Economics doesn't support virtual worlds as a replacement for the web and the real world.

Walmar Andrade

I've never trusted in Second Life... we already have a lot of problems on the First Life. SL is big, slow and sometimes boring... I gave up in my first visit.

worth

Not too harsh at all. The Wired article that I read online yesterday absolutely floored me when it discussed the hardware induced limitations on the number of avatars able to inhabit a particular place at the same time. I had no idea! That alone kills it for me if I'm IBM or Dell and am (was) under the impression that I am investing millions to personally interact with thousands (or millions) of people.

A TED aside: just caught the DVD from Netflix and watched (twice) over the weekend. It's amazing to actually see what I've been reading about in print for all these years! Nicely done.

Dirk Singer

So creative agencies and their clients pump large amounts of money into SL and their efforts bomb: Could it be that it's actually the creative execution that's at fault here, rather than the medium?

It seems to me that a lot of companies are repeating web 1.0 mistakes of ten years ago and building a presence...for pretty much the sake of building a presence.

If you are a brand the worst thing you could possibly do is try and replicate your RL brand strategy wholesale in a virtual world - different rules apply. Rather than slap up a virtual world ad actually have to add some kind of value and engaging user experience, and it's pointless doing something that plenty of residents already do pretty well themselves (a key reason why American Apparel failed - there are countless home grown SL fashion brands in existence).

So where's the value? I think Pontiac's creative SL director summed it up pretty well in NWN:

Although I readily accept that SL has faults, I do think it's a perfect platform for what Pontiac set out to do. We wanted to create a community and reach out to an audience that might not consider us at first thought. I believe (and the metrics back us up on this one) that we've succeeded far beyond our initial expectations. As our campaign heads toward the end of it's first year we've seen expansive growth in many areas such as resident creations, avatar experience time, and unique resident created events. All of these lead people to thinking about us in new ways. (http://nwn.blogs.com/nwn/2007/07/unwired.html)

Paul Soldera

I think most people treat (or think about) SL in the wrong way. We talk about it as if it's a medium - like TV, radio etc. That it is this place all people from all walks of life will gravitate to to hang out and socialize and be a captive audience for brands. Maybe it, or something similar, will achieve that one day, but it's plainly not that now. The better way to think about it is as a media vehicle - like a specific magazine. You go there to access the audience it attracts - as such, if your product is not interesting or compelling to that audience, it's not going to work.

I like the idea of SL though, we just need SL 2.0 to come along - make it easier someone, please!

Barney Boomslang

Did it ever cross your mind that nobody goes to those company places or to your book signing or some other of that "meta" or "marketing" stuff - just because it is plain and utter boring? I mean, did it ever cross your mind that it might be a good idea to do something _interesting_ in SL, to get people to go to your events? Maybe, just maybe, SL-Residents just are not interesting in regurgitated RL crap - you know, it _might_ be the obvious reason, that people just go to SL because they want it to be _different_ from RL?

Just a thought ...

Christian Scholz / Tao Takashi

Well, I just can say that I was one of the 30 people attending the book signing and without that event I probably haven't heard about the book (ok, maybe later I would ;-). And since then I am spreading the news about it.

As for the money you spent there maybe you overspent.. Actually these days with voice you could do a reading quickly yourself. Spread the news a bit with some key blogs and just go into SL and just read with your headset on (or even discuss which might be better). Not that many costs involved for doing that. I am also sure somebody will give you some space to do that.

The other point is that SL is not a medium for reaching the masses in a single point in time. Such events are also mainly one way, one person/brand talks, the rest consumes. SL is different, it is about communication and if you look around at in-world activities by SL residents you will notice that quite a bit. Of course corporate places are empty but honestly why should I go there if they just put a nice build there.

I also would have wished for more action at the Wired HQ, not sure if there was anything beside the first meet'n'greet (which I actually liked).

The key really is an ongoing effort in SL and try how to communicate with people. Build your community, build loyal fans of your brand. And maybe see it more as a field for experiments instead of directly expecting millions of new clients (or whatever). And combine your SL discussions with blogs, podcasts and the like. Virtual worlds will most unlikely go away so better try to deal with them now and find out how to deal with them the best way. Add to that how to measure these activities correctly. It's definitely not traffic but then again you will have a deeper interaction with a brand than e.g. seeing an ad in RL.

Of course SL and all that needs to get easier, more open etc. but people are working on that. Of course at Linden Lab and of course at other virtual worlds (although I don't see that many who really try to be more open, more the opposite).

Josh Bernoff

Forrester's report on Second Life was similarly bearish. Virtual worlds may have a future, but SL isn't there yet, at least for marketers.

The article was right on target.

Ian Betteridge

To come back to a point you make:

"But the reason we let it languish is the same as my own: we just weren't seeing results"

What results did you expect to see? People won't come along to an empty build where nothing is happening. Well, a handful might, simply because of your brand name - but you're not engaging with the medium in any meaningful way.

The phrase that I use is this: "Don't build: Do." Creating a build in SL, holding one event, and expecting people to come along after that is the equivalent of those bloggers who make a blog, post one thing, then never do anything else. They're not engaging with the medium.

Hackshaven Harford

I thought your readers might be interested in one of several companies specializing in measuring traffic in virtual worlds like Second Life.
http://www.mayarealities.com/

Ordinal Malaprop

I have to concur with Mr Boomslang and Mr Betteridge here; what was it, really, that was on offer here? Your brand means a little, but not enough - sufficient to get initial visitors, not enough for them to keep returning or spread the word.

You say "I fully admit that we didn't do all we could have in continuing to promote and tend it after that. But the reason we let it languish is the same as my own: we just weren't seeing results" - but you don't get results just by appearing somewhere and expecting people to come and look at you. Not in SL and increasingly not in other areas too.

Would it be reasonable to put up a promotional video on YouTube that not many people wanted to watch, leave it there, see that it didn't get a lot of views and conclude that YouTube was a useless medium? Or, for that matter, to publish one issue of Wired and then complain that people stopped buying it after a while?

This isn't like buying banner ads. Perhaps at the moment you might get a better ROI on banner ads, I don't know. But what sort of attention are you really after?

matias

Basically the root problem I see is that otherwise very intelligent people can't seem to get through their heads that SL is not the Web 3.0. Unfortunately this problem starts with SL's own management and PR department.

The web is a publishing experience. It allows a creator to broadcast their vision to many, who will then experience it at their own pace, and most importantly in a singular fashion where one viewer is absorbed by one instance of the published item and connects with it in isolation. This is similar to TV and very similar to print. SL is a totally different experience. By giving you an avatar and a sense of place, users don't just interact with the published data, they are actually driven by the nature of the human mind to first, interact with each other. Its 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. Virtual worlds are social. Duh. Designing spaces and experiences that are focused around social interaction is actually a well understood problem. Party planners, restaurant designers and architects are just a few of the disciplines that create places and experiences for people to do that. Good marketing execs will soon realize this and start shifting their strategy away from advertising and retailing to sponsoring and event hosting - only problem being the technical limitation above.

It's worth noting for a minute here what does work in SL. SL wants to be social, but can't be large scale. It wants to be 3D and real time too (see the bevy of well made vehicles and game systems that chug along painfully slowly with millions of bugs) and the technology wont let it there either. So social small scale is all that's left. Small intimate communities of friends. Small intimate night clubs. And of course, sex. In that context products and branding work very well. 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 (see sex bed - also see Neo Realms Fishing Camp.). 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.

The challenge as I see it for real world brands is to do something meaningful in one of those four categories. Just like success for Coke on YouTube was catering to the essence of the experience and not just moving experiences from one media to another. Viral video competition of exploding Mentos + Coke gysers works on YouTube. Serving the same TV ads does not.

You want practical examples? Here's some for each of those catagories:
1. A space of your own requires a brand that people trust to build spaces. Starbucks could get into the land baron business and sell prefab spaces tastefully decorated with streaming music that is linked to their store's music selections.
2. Clothing brands require more than just logos since those are easily knocked off - one major gap right now in SL fashion is the one size fits all mentality - you need a real business to offer the same outfit carefully adjusted for different body shapes. Vouge could get into the fashion business and offer a line of their haute couture hits, but 'off the rack' sized to different avatar shapes.
3. Personal motions seem impossible to brand. Unless they're part of a social meme - D'oh! Budweiser could offer animations and sound kits to tie in with any of their funny and meme-able ad campaigns - think wasaaaaabi! How about a Tony Hawk branded skateboard? It's not the board that is unique, but the motion capture of his signature tricks that youch gives it value.
4. For social objects I'm going to suggest something that seems almost anti-social until you think about the most social of all human activities - sitting around the campfire. THe modern equivalent is the television, and social networked viewing has huge potential. NBC could offer "TVs" which are stream a selection of their most popular shows, complete with some advertising. Offering their proprietary content in an easy to consume way allows those small social groups in SL to answer "what do you want to do tonite?" with something other than dance or shop.
Part of the key is playing to SL strengths, as described above. But it will take more than that, because of how easy it is to produce knock offs, you need to offer unique value, even in a giveaway. Budweiser gestures only have value if they mirror a successful meme campaign. Starbucks needs to offer a feeling of place that really feels uniquely Starbucksian. NBC's content is copyrighted, but in this era of rampant piracy the real value they would offer is the ease of use and simple setup for getting content into your SL home. The proper leveraging of a real world brand will make knock offs not worth it or impossible.

Is it that simple? Just, "know the medium" and "offer differentiated value"? Sounds obvious, but I think there's one other factor which needs to be understood. Know your audience. The people in SL are not the average demographic of the web. They are a particular psycho-graphic profile that gets tremendous satisfaction from the kinds of things that are currently doable in this still imperfect, not so brave, new world. For simplicity's sake consider the Makers and the Consumers as the two big disproportionate chunks of people in SL.

Builders and programmers make up a select percentage of creators who are attracted by the possibilities of the medium. Notably most of these folks are craftsmen, not the big picture marketers and entrepreneurs. I don't mean this in a derogatory way (I count myself among them), but honestly we are the grunts, the folks on the assembly line. Our satisfaction comes from making something with our own hands, and the business and products we create are a reflection of that, as are the products and services we consume: open source, technically clever, artistically expressive, highly individualized, etc. This group will resonate with a very different set of brands and propositions than the large majority of SLifers.

It is also a mistake to identify the majority of SL Consumer style users as mainstream. They're not. They can't be if you think about what's successful in SL outside of the collaborative creation environment. What we're looking at are socializers who are satisfied and successful in a text only environment. Voice support is being implemented, but that doesn't reflect the reality of today (and frankly I have my doubts about how scalable or successful voice will be). Right now consumers are there to socialize, and somehow find the odd, jerky, text based socialization of SL appealing and differentiated enough that they are investing regular time in that. Time that could otherwise have been spent taking a class, going to a bar, volunteering or doing one of a hundred real life social activities. Who are these people?

The obvious answer is folks who are really looking for a 'second' life. It's a fact you discover very quickly when you join SL, some folks are being 'themselves', the majority are presenting avatars and possibly persona that are radically different from their real life selves. Interestingly enough people seem to move from one to the other as they realize that the virtual world offers them the freedom to reinvent themselves, so perhaps this has universal appeal. Perhaps. It's just as plausible that many people are happy enough with themselves and the way they socialize in the real world that virtual socialization has no appeal. For the time being however this seems to be a distinct type of person, whom it may be very hard to connect a brand with. If they are dissatisfied with reality and all the brand in it, there's no guarantee you can offer them anything in virutality. For some, the fantasy of the ultra rich is an appealing second life - it is easy to own a yacht and mansion, sportcars and fancy watches. But taking real luxury brands and selling them for a pittance on SL seems like a detractor to the brand, not to mention that it could very well turn off those 'aspirational' second lifers. 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. Consider the reportedly huge percentage of Furry players, or Goreans. These are extreme social nonconfromists. A few choice brands could play here (maybe Tony Hawk), but many may simply not even want to sell to this audience.

As an aside its also interesting to note that it seems that most of these folks who play with different avatars or different persona 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 of self that is not possible (or acceptable) in the real world. Many claim that they roleplay but I recall a study (I know citation needed) where it was shown that most folks adopt one identity and stick with it, often also linking that identity with their RL identity. In other words it's not "today I will be a 2foot teddy bear today, and tomorrow I may be a dashing super spy," but rather "I know being a mafia kingpin is silly and over the top, but it expresses something essential about me and who I want to be." Even folks who continually modify their appearance do it under more or less one persona - "I am that wacky guy who is a blast at parties who is constantly in a new costume," as opposes to "no really, I am a T-Rex today! Me hungry. Bite. Bite. Bite." I bring this up because it presents an opportunity. If you do have a brand that can be made relevant to the persona of how a person wishes to be, then it should have tremendous stickiness. Petco offering furry products may be a stretch, but if the Goth, Vampire, EGL 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.

Know the medium, know the audience, offer something unique. None of these principles are new. The only problem is that the folks trying to use them 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 (arguably well intentioned because of a zealous conviction of what the future should be) 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. Having first mover advantage assumes that the early adopters value the same things that the mainstream does. True for web 1.0, but it's not clear that it's true even for web 2.0. It certainly wasn't true for iPod - there were hundreds of MP3 players available and successful before Apple introduced the perfect mix for the masses: ease of use, stylish design, size, and music delivery.

Today SL is like the wild west. What's successful in Deadwood won't fly twenty years down the line. In a world where land can be created with a push of a button there is no first mover advantage to staking a claim. The gold is in the people, and the time to set out and hunt for it is when you see the demographic of your brand about to make a big leap into a social second life. Frankly, I don't think that applies to most brands right now, but it does bear watching and preparing. I too believe there's gold in them thar hills.

Valerie

Your blog, your opinion, so not harsh. I'm getting a little weary of this Wired/NWN thread, unsure of really what has been learned from all the back and forth.

I was at that Wired build's opening in SL (Kleptones mashups - nice move), then barely anything else happened at that place. SL's fault or Wired's? Chicken or egg? What came first: no one coming, or the Wired build not doing anything to attract anyone?

I'll admit that SL is over its head, and many corporations that jumped onto the grid (maybe including yours) had no real clue what they were doing. I wish parties like that would take the time to investigate places in SL that attract visitors and keep them coming, then decide "well, that doesn't jive with what we want to do with our brand; that's not enough traffic; we can't put that much follow-up time into this" and go home. Or just maybe some organization digs in and looks around and eventually thinks, "yeah, I can see us doing this...and this...here's how we can bring a Resident back, here's what we can get out of it." Either if those directions is fine.

SL is a tool of communication and education. If you can't use it, you can't use it. I wish more attention had been paid to people who can. Maybe readers could've learned something from that.

Sciolus

How quaint. Marketing real books in a virtual environment. Ever considered why millions of people still print out pages of documents/manuals/journal papers when they can read them virtually? Or why we aren't excited by food items in video games?

People smell the cooked grease or the fresh-cut fruit before they are tempted by unknown food. People feel the ruffle of pages before they bring an unfamiliar book to checkout. In the end, virtual worlds only provide audiovisual effects.

Now, luxury sells through the sight of packaging appeal. Gambling sells through the sound of money clinking. Sex sells through both sound and sight. The best merchandise for these channels have already taken place online in various forms, and will continue to evolve with these virtual environments.

Even the Long Tail does not change human nature.

Cristalle Karami (SL)

This is funny. Wired is a website with content that changes every day. If the same articles were here every day, I would imagine it would have less visitors than the island in Second Life. I mean, Wired has a headquarters somewhere, does that mean I should read the mag because of it?

Second Life is ultimately about things to DO. New things. In the real world, no one goes to Coke's Headquarters and gets inspired to buy Coke. They advertise. They make new flavors. They promote themselves. There is something new to see from Coke in the real world. Why should it be different in Second Life?

Your plan for the use of the island was probably botched from the get-go. If you don't give people content - not just a static art display, but content: a reason for people to come, and to come back - then you just bought yourself a few headlines and that's about it.

Santa Monica Jeremy

Come on, this is silly.

Imagine if you judged the real world this way.
1) You go to a football stadium. It's empty.
2) You go to Coca Cola's Corporate HQ 6 am. It's empty.
3) You go to downtown LA at 4 am. It's empty.

You conclude, "What's up with this Real Life thing? There's nobody there!

We have vast acres of land and millions of buildings in the real world that are empty part or most of the time. So?

Second... the point has been made a few times before, but: People don't come in response to a marketing message. People come because they want something to do.

Pong proved that you can give them something really simple and they'll do it.

Toyota has a national informational tour 9on Hybrid vehicles going around right... they get people to stay and go through the information by making it part of a game, with a rewards system. It works.

People come back to bars, movie theaters, casinos, and clubs night after night because they are offered something to do. People do not go to empty buildings where nothing is going on - why on earth should they?

The point has been made that marketing folks are trying to apply the wrong models to Second Life... but look at my last point: People aren't even applying the basic knowledge they've gleaned from the real world in Second Life!

Jason Stoddard

I talk about this in depth in my response to the Wired Article at my blog (centric.com/thought). But just regarding Chris's point about impact and impressions and "what I can measure"...

On the conventional side, networks can’t tell if an ad has been skipped, missed, ignored, or even if anyone was sitting in front of the television set at all when it played. What they can tell you is that it was placed. And that, statistically, X millions of people watch the program the ad was placed on. So tying results to a specific campaign is difficult, except by after-the-fact research.

On the online side, we can measure click-through rates and track the actions of people who clicked through to the endpoint, whether that is a sale or an inquiry. But the numbers are small – for large network buys, clickthrough rates are typically below 0.1% and conversion through to a sale or inquiry can be 1-2%.This means that your $100K might only buy a few hundred people interested enough to buy or inquire about your services.

Those results suddenly don’t seem so great, do they?

And, when you get right down to it, they don’t seem that much different from what you might expect from a Second Life presence that has about the same budget.

Blake Ives

SL is a window into the future, not the future. Moore's law will solve capacity and energy problems and new interfaces will solve useability and learning curve problems while opening up a range of rich new applications. More professional management might solve others - though perhaps by replacing SL rather than fixing the glaring reliability issues.

It is not an issue of, if virtual worlds will succeed, but rather whether RL companies can learn to harness them. An alterative scenario, that appeals to me, is that emerging virtual world companies, will eventually threaten RL companies. New businesses using transformational technologies to first serve new customers is a classic failure scenario for those favoring the status quo. SL firms are, after all, the ones actually making money in this world, albeit still on a micro scale. While many RL firms, apparently including Wired, are failing in virtual words, SL and its dedicated followers seem quite capable of going on without us. Indeed, many SL inhabitants appear to prefer that we just go away.

It is not obvious that LInden Labs is exactly falling all over themselves to make RL companies comfortable there. Nor, necessarily should they. Perhaps they don't see the upside potential. Surely, it is far less obvous today than it seemed a year ago. Still, all that RL hype has brought new citizens.

It is time, not money, that we need to be investing in SL. It is the experience, not the money, that brings understanding.

Anon

Maybe if you had gotten a non-sucky development company, you would have had better luck in SL. Was there EVER anything going on in the Wired build in-world? Was there anything for users to do there? The answers are no and no.

Don't bash the platform because you had no post-launch plan.

Clyde Smith

Wow, in depth commenters!

AU says [I think it's him]:
"And now when you Google "Judge Richard Posner", his Second Life appearance currently comes up in the top ten. I can't emphasize the wonderful and powerful strangeness of that: Judge Posner is the world's most influential jurist, and according to Google's longtail of search, his appearance as an avatar beset by fireballs and a giant raccoon ranks among his very most relevant achievements."

Being in the top 10 on Google is not consistent with "very most relevant achievements."

That's an extremely bizarre statement.

Nick

Some fantastic comments here, I think if we shortened them and put them in some kind of order we could publish the 'how corporations should do Second Life' guide and make a ton of money!

Without covering old ground here, I think the long tail concept is essentially bang on, but what i don't understand is why it needs to be restricted to online mediums only. old media mediums, as Henry Jenkins would no doubt agree, are often crucial to the success of new media mediums.

Secondfest apparently had 150,000 uniques it also had a wrap around advert and pull out centrefold in The Guardian Guide weekend supplement.

Why didn't Coke advertise their Virtual Thirst campaign on their cans and bottles or even TV campaigns? Yes it costs money but surely that's the logic of investing.

I agree with all the comments here that say corporations need to understand Second Life before they go in and want to add that Second Life and virtual worlds as a whole need to be considered as part of overall strategy not as a fun gimmick.

There also needs to be more time spent considering what a 3D medium can achieve other than pretty, empty buildings. As matias states, appearance is a big pull in SL, but there is also opportunity for other interactive elements such as ARG, companies need to look at what makes a more game oriented MMO like World of Warcraft work and think about applying osm of those features.

shockwave yareach

SL has its problems, I do agree. One of the problems is knowing ahead of time what events are taking place. The Search Events is useless as there are 1000 sneaky ads for various stripclubs or dance halls, and they are all events taking place right then. Makes it hard to plan to visit a booksigning when you don't know it is going to take place.

Right now, SL is mostly empty except for gathering places where people congregate just to shoot the breeze and socialize. Shopping centers look empty because it only takes a couple of minutes to find what you want and go. If only the REAL shopping were as quick and painless. If you want to find the crowds, look at the map and notice that certain places have lots of dots while the surrounding areas are empty. That's because everyone is there, chatting and laughing and having a good time.

As for businesses, residents like me don't think highly of companies coming in, spending millions on a spot and then moping and whining that we don't all prostrate ourselves at your door, grateful that you've graced us with your presence. What did you build? What reason would I have to come there? Would I enjoy myself at your place? See, SL is on my recreation time - I don't live here and stay 24/7. I'm here a couple hours a day to have fun. I'm not here to make Nike's corporate masters happy with their purchase. This isn't TV with a static audience. SL is interactive and for most of us, recreational. If you don't have anything interesting to do at your site then we won't come to it, simple as that.

Businesses should stop thinking about SL as Market Research and Sales, and more as sponsored advertising. Help some guy pay for his haunted house in exchange for signs showing who helped and where customers can get sponsored clothes and other trinkets. It's only a little different than slapping your logo on a Nascar racer, except folks can click on the sign to get a landmark for coupons, giveaways and SL only discounts. You'll get a lot more attention sponsoring some event than you will creating a boring building on some island or other that people can't get to unless they already know it is there.

Frfank

If I walked up to 10 normal, average everyday persons and asked, I'd bet 10 out of 10 would say "What's Second Life? Never heard of it".


Your "blogosphere" is a pimple on the arse of a flea.

Moriz Gupte aka Ramesh Ramloll

Hello Chris,
It's good to see through a lot of the comments that many folks do get it. SL is about active participation within dynamic contexts. It is also a powerful source of asynchronous material e.g otherwise you would not have seen thousands of blogs devoted to SL and its activities, or machinimas and so forth. The most active community in SL at this time is by far the education community. I suspect there must be many email lists about education in SL. I started one in my own university and not only did I attract funding for our own projects, but many colleagues were successful too. I am fortunate to use SL for emergency preparedness training where spatial context is a must, role playing is especially important for table top exercises and so forth. And for the pedantic, there is a body of evidence based research out there where training in virtual environments has been found to be viable. A lot of points about marketing failures in SL is well made so I won't venture there. I can only talk about what I do in SL.

Reuben Steiger

Chris,

I've largely stayed out of this conversation until recently, but it's time to weigh in. I think it's important to point a few things out.

1. My company actually built WIRED's SL offices and handled your 1 hour lecture. The genesis of the project was not exactly a long-term ROI motivation, if you recall. Instead, it was initiated 3 weeks prior to the publication of your Second Life issue to add authenticity to your reporting. Also, while I wish you had spent "many thousands of dollars" on the effort, it's not quite the truth. A few perhaps would be more accurate. At the end of the day, the success or failure of your presence is your own responsibility (for example, Frank Rose could hold a panel on his article at the WIRED office. . . .) and you haven't done that.

Now to the larger issues:

1. Not many companies are “leaving SL”. American Apparel, who made huge headlines for a very modest investment, chose to make some more headlines by leaving and announcing it with a digital bullhorn. I’d guess they spent $10K. Here’s a sample of the ROI http://tinyurl.com/ytwgk4 Hard to call that a failure.

2. Is the ROI simply a function of novelty and therefore short-lived? I've always taken a contrarian position on this one. Second Life, because it's a constantly changing user-created society, is sort of the Holy Grail for journalists. Compare it to something like World of Warcraft, which is 1000 times more polished and significantly bigger. How many stories are there to write about WOW? But SL provides hundreds every day because of the unanticipated, emergent creations coming off the grid. And this is likely to only increase as users are added, not decrease.

3. Regarding the breakout success issue, I’d say that at least 10 of our campaigns would qualify including our work for Pontiac, Toyota and Microsoft. Microsoft in particular, which launched 2 months ago, has engaged thousands of perfectly targetted users around the globe. The average user spent 24 hours engaged and the “winners” of the game spent an average of 74 hours. That’s pretty unheard of — read more here. http://millionsofus.com/blog/archives/category/microsoft/

4. I guess my final point would be that the virulent and sometimes scantily researched predictions of Second Life’s demise are as off-base as many of the breathless predictions that have appeared in the press of the virtual world as the solution for all problems known to man. I wrote a piece on this last week that’s pretty interesting http://millionsofus.com/blog/archives/273#comments

For the most part, what I think is happening here is that the market that began with only Second Life is now entering a state of maturity and options have emerged, which is healthy. Whereas a year ago clients were asking whether they should be in Second Life they are now requesting virtual world strategies that cover multiple worlds. Secondly, marketers are realizing that virtual worlds and social media are a reality that is being driven by consumers. Considering that social media now accounts for 31% of consumer internet usage and is the fastest growing segment of the market, companies are wisely beginning to learn how to adapt to these new technologies to succeed in the future.

epredator

Well now I am goign to have to stop doing the advertizing of long tail :-(
I do several pitches a week on what happens when people meet in the metaverse.
My example has a pre event gathering, event itself, non verbal communication of knowlegde, post event mingle.
The pictures are all from the MOU/Long tail event.
Pre event has a great shot show actual social circles forming. Data mining of relationships happening becuase people choose to gather.
The event has an auditorium with people choosing to accept the social norm and sit and listen.
The front row are all holding long tail books, indicating to the author a depth of knowledge of the subject, allowing the adjusting of questions/answer responses.
The post event mingle, including a book signing challenges the preconceptions of value when things are virtual.
Plus, I explain a bit about long tail to my corporate client audiences and indicate that this is me passing the message on becuase I now feel involved and part of it due to the personal nature of the experience.
Still I can bin all that, as I will spend all the time dealing with smart people saying "but I read on the web that"
I can appreciate the feeling of emptiness, the scaling needs to be sorted whether SL or not. But 30 people, the right 30 people? they are the ones who spread out the message.
When a company runs corporate hospitality they do it for a few, that then influences the masses.
Having said that I got 200 people a day to talk to about what we do as a company at Wimbledon in SL this year. A wide and diverse set of people. It took time and effort to enagage with each person, aswell as the 20 a day in real life coming to the venue. That personal interaction was the draw, allowed me to adjust to each person. Sure not a volume seller of magazines and books so the model may be different.
The scaling will come as it has with the web.
Still just my oppinion :-)


Prokofy Neva

Ok, well, see you next year, then, when the platform will be more robust, there will be more people available at least asynchronously, various important things like presidential camaigns will be happening, and you'll find your own reasons to be back -- don't burn your bridges.

In the meantime, I think it's worth reflecting about the sense of place in a social world. If you open up a satellite office in a suburb of, say, Rochester, NY, and have a grand opening with no press coverage or local networks to show up, what it is worth? But if you held and exhibit at the Eastman Museum, or a production at the Eastman Theater, or held a concert at the War Memorial, you'd have many more takers. You have to go to where people are already, and give them interesting things to do, not just beckon them to gander at your product, which they won't naturally care about on their own.

I think people with books to promote need to rent stalls, book stores, mall space all over the 8000 plus servers to have visibility and interactivity -- it will cost a fraction of what it costs to buy and build out and maintain an isolated island. Integrate with the world. Sponsor live music or fashion shows or book clubs whatever it is people care about. That means having presence and that can be costly, but figure to put in a certain amount of prime time strategically deployed, and it will work out better than staying cooped up on an island.

Renee Hopkins Callahan

This is all just a case of businesses not being able to see the virtual forest for the Second Life trees....about which more here: Is Second Life A Dip Or A Cul-De-Sac?

Kevin Kelly

Chris,

Question: If you had not spent several thousand dollars (if it were only several hundred dollars) would the SL appearance have been worth your time? Or put it this way: On your book tour, fllying around the country, traveling to bookstores where you may also only see 30 fans, if Second Life was just another city you added to your tour, would you have gone?

Tim

Second Life does one other thing that may cause some "emptyness" - they require high-end graphics cards for participation. At the risk of ending up with a lot of Clints and Brandies, they would have more traffic, and be more attractive to advertisers, if their client could run with the graphics built into most motherboards.

Nick (another, different Nick)

Noone has figured out WOW yet. Too clearly "of itself" and "for itself", and jealous of intrusion. SL seems easier, it even looks analagous to RL. But it isnt, and the differences are more subtle than in WOW. To put it bluntly, the audience isnt an audience anymore. Virtual worlds as the death of marketing? Go figure.

The corpse will twitch for a while though. Like putting an electric charge through a frog's leg. You have a few years leeway, but the term viral marketing (the much touted future) predicts the end because it introduces, by association, the key concept of immunity. If I need your product, I will find it, your job will reduce to providing balanced honest information about useful products. Which is wonderful, even fulfilling.

Doug McDavid (Doug Mandelbrot's human)

Maybe the problem is the conception. or preconception, that virtual worlds are about *advertising*. Won't be long before this argument will sound as silly as "I took out that stupid phone I had in the house. Sure, I could use it to talk to people, but when I wasn't using it, it just sat there and refused to generate leads."

Chris Grayson

Chris,

There are a few things that are very misunderstood about Second Life.

Firstly, the advertising industry is definitely not the driving force for most commercial Second Life development. The rush to Second Life was driven by PR Firms. I work in the advertising industry. I know most agencies were baffled by the rush to Second Life. They looked at the numbers and the visitors, and decided from the word "go" that the ROI wasn't there. But PR firms saw it from a different angle. They looked at the press coverage that a SL launch could generate. Those at the front end of the curve saw feature stories in every major business magazine, features on the evening news, and morning shows. The press coverage of a SL launch was worth infinitely more money than the moderate cost of a SL build (moderate compared to say, a TV campaign, or even a web campaign or website development). The exposure was worth tens of millions. From the perspective of a PR firm, they didn't give a damn if not a single person showed up to their client's SL SIM. It was not built for the audience in Second Life, it was built for the viewers that would watch or read the media coverage of the launch. Then, as others jumped on the bandwagon, simply having a presence generated less and less hype. As the PR hype cycled died down, the late comers to the party showed up thinking they would actually get some advertising return from having a SL build. They missed the point.

It is a huge mistake to enter Second Life and expect to use it as an advertisers' medium, but I think anyone who went in with that expectation was fooling themselves from the start.

Secondly, SL is virtual reality with training wheels. It is an environment that will help us prepare for more immersive worlds that are to come, or what SL itself is likely to evolve into over time, it if survives its larval stage.

When it matures, Second Life, and/or other immersive metaverse VR developments will have a huge impact on long distance communication in the areas of business communication and distance learning. The company doing the most in this area is IBM.

I somewhat recently blogged Second Life as well, and addressed some of these issues. My story caught the attention of Roo Reynolds, IBM's Metaverse Evangelist, who covered my story on his blog, and was engaged enough to leave a comment as well.

Here is my article:
http://GigantiCo.squarespace.com/336554365346/2007/6/21/virtual-reality-part-1.html

I hope you're able to find the time to read it.

cheers,
Chris

-----

Walt Khan

I get all this but...

... it's just ...

who give a fuck?

Roo Reynolds

I really loved Doug's comment above: "I took out that stupid phone I had in the house. Sure, I could use it to talk to people, but when I wasn't using it, it just sat there and refused to generate leads.". He is spot on; if you cease to participate you shouldn't expect different results.

(Incidently, although Chris Grayson's description of me above as "IBM's Metaverse Evangelist" is very kind, I should point out that I'm just a metaverse evangelist for IBM, and far from alone in my role. Ian 'epredator' Hughes is my partner in crime (as well as the source of my job title) but there are hundreds if not thousands of enthusiastic IBMers engaging and participating and making a big difference every day.)

Dirk Singer

Let's say I was a marketing agency which had tied up a big money promotion with Wired Magazine. The promo runs...and there is an embarassingly low response rate. Who gets the blame? You as the media owner, or me as the marketeer?

You would probably argue that I share some of it for not reading the target audience properly, and rightly so. And it's the same with Second Life. We can argue about the numbers, but hundreds of thousands of people do use it. If they aren't responding to your brand efforts, doesn't that say something about the way you are trying to talk to them?

Let's be honest. SL is neither the best thing since sliced bread, which was on the media agenda three months ago, nor is it the miserable failure that writers are piling in to pronounce it today. It's an interesting test ground for interacting with new audiences and a chance to do things a little bit differently. But ultimately, as with any online medium, it's what you make of it. If what you do falls flat on its face then really you have noone to blame except yourself.

Lakshmi Goel

At the risk of sounding repetitive, I think considering SL synonymous with Virtual Worlds is a big mistake. SL is a preliminary version of an open (non-gaming), social virtual world. It certainly has its limitations and bugs. Early websites had similar issues and it took some time for the internet, as we know today, to evolve in functionality.

The success of YouTube, Playstation, 3D gaming worlds..suggests that people try to expand their channels of information assimilation. 2D text interfaces are fast becoming boring and passe. Wikipedia, Myspace..attest to the power of social networks. Given this trend, it is surprising that people still question whether virtual worlds will be successful. Moving from a 2D internet to a 3D one doesn't seem a very big leap once the technology chinks are sorted out. The focus now, as Blake Ives pointed out, should be on gaining experience in using these virtual worlds. It is a more a question of who will be ready for the change when it comes.

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Tidbits

The Long Tail by Chris Anderson

Notes and sources for the book

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