Virtual Worlds: A Real Waste of Marketing Dollars?

The latest issue of Wired has a an article that takes a not so flattering view of Second Life, and of several large brands that have tried to open up shop in the virtual world. The title says it all: “How Madison Avenue Is Wasting Millions on a Deserted Second Life

One of the things you never see in Second Life is a genuine crowd — largely because the technology makes it impossible. … Created by an underfunded startup using a physics engine that’s now years out of date, Second Life is made up of thousands of disconnected “regions” (read: processors), most of which remain invisible unless you explicitly search for them by name. … And even the popular islands are never crowded, because each processor on Linden Lab’s servers can handle a maximum of only 70 avatars at a time; more than that and the service slows to a crawl, some avatars disappear, or the island simply vanishes.

The article goes on to cite several examples of failed or failing storefronts, including coke, H&R block and Toyota. The author chalks the willingness by marketers to experiment with second life to the fact that traditional marketing techniques are essentially failing.

“A terror has gripped corporate America,” says Joseph Plummer, chief research officer at the Advertising Research Foundation, an industry think tank. Plummer has been around Madison Avenue since the early ’60s, when modern advertising techniques materialized. “The simple model they all grew up with” — the 30-second spot, delivered through the mass reach of television — “is no longer working. And there are two types of people out there: a small group that’s experimenting thoughtfully, and a large group that’s trying the next thing to come through the door.”

It’s pretty easy to come up with examples of silly ideas (at least in hindsight) or poor execution. What about presences in second life that actually work? Before I left Autodesk, I was shown what I still consider the best application of the technology that I’ve seen to date. Warning: It’s a pretty modest and practical application.

Crescendo Design, an architectural firm in Wisconsin, is using SL to model their home designs, experiment with renewable energy, and walk clients through potential designs. The demo I got about a year ago just blew me away. You can screenshots of their work in SL here.

The interesting thing about Second Life residents is that they REALLY love it. I’m not sure that it’s possible for real world brands to come inworld have a meaningful interaction with the residents without changing somethign about their real world product or marketing formula (ex: coke machines in second life?!?).

What do you think? Have you seen examples of companies large or small using having success doing business in a virtual world?

3 responses to “Virtual Worlds: A Real Waste of Marketing Dollars?

  1. I read the article – the problem to me is advertisers (no doubt encouraged by the SL middlemen) are being taken for a packet for pointless, seldom visited, vast prestige builds. The greatest potential is in SL themed communities, although they are far from new, of course. People invited to live/set up shop/socialise/engage in leisure activities and of course build under a covenanted theme on 1-4 joined sims. Corporations would get a much bigger bang for their buck – including far more exposure – if they took that road. Electric Sheep are no doubt laughing all the way to the bank, but Lindens will only end up with more and more under-used land with less and less variety to pull in the punters if they let this kind of hoodwinking of corporate interest carry on. Okay, Electric Sheep – now sue me! :)

  2. You know, I’ve never been into Second Life. Let me restate that – I’ve been there, but was never engaged in it. It’s just never appealed to me.

    This doesn’t answer your question, but I always remember talking to Scott Moore about virtual worlds and I asked him if he thought there would ever be a virtual world that did constitute a replacement for real life. I don’t remember his exact response, but it was to the effect of “not until our first world sucks really really bad.”

    I remember this because I think it frames my perception. I love the real world too much.

    Seriously, the folks at Social Signal have been doing some work in Second Life: http://www.socialsignal.com/second-life

  3. Lee: I think that is a great filter to think about all online experiences. “Is this adding a net-positive experience to my life?” Especially with virtual worlds, where the overhead (system, sensory, etc) is so high to participate.

    Maybe there should be some sort of equation to suss this out… in fact, we could call it the Leequation.

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