What’s Wrong With Virtual World Marketing

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There has been lots of discussion lately, in both blogs and mainstream media, regarding the slowing growth of Second Life and the money corporations are wasting there. Having spent the last six months at my previous employer leading the effort to develop a significant SL presence, those stories peaked my interest. The adult-oriented Second Life has grown significantly over the last year, primarily because of all the media attention given to brands entering that virtual world. For the most part, brands who have invested in Second Life have not seen any return on their investment and some, like Starwood’s Aloft Hotel and American Apparel, have pull up stakes and left. In fact, most brand islands in Second Life are ghost towns. Why is that? I think that most of the companies that have built in Second Life have done so without really knowing why and the approach they typically use comes from their traditional marketing experience.

The Wrong Reasons

The rush started about a year ago following reports in business magazines about the economy of Second Life and the money some people were reportedly making. Companies started rushing in, not wanting to be late to the party. Some, like Starwood, saw the opportunity to use Second Life as an innovation platform, but others were there thinking this would be a great marketing or even sales channel without really understanding what they were dealing with. The common thread here is that their reasons for being in Second Life have been heavily focused on them and not the Second Life community.

The Wrong Approach

In most cases, companies have approached building a Second Life presence with a traditional marketing mindset. Because it’s a 3D world, the typical approach has been to build a virtual “physical” destination; a store or building where consumers can interact with your brand. But unlike the real world where the best locations are those with high traffic, companies have chosen to build on isolated private islands, safely away from “populated” areas. This allows the companies to totally control the experience and minimize risks from neighbors who may not be complimentary to their brand. The analog to this is the traditional website, which is effectively a island, isolated from other websites on the internet. Since most companies have entered Second Life without understanding its social nature, this approach is understandable, but flawed.

To get people to visit your island, you have to provide incentives like freebies and events. That’s like advertising in the real world, but it’s relatively ineffective in Second Life considering the relatively low traffic stats compared with a real world website. This approach is also hard to sustain and when the initial buzz dies off, so does your traffic and consequently, support for continuing the incentives.

The third and probably most significant flaw in the typical approach is failing to understand the community you are trying to engage with. Virtual Worlds are very different from websites and physical presences in that they are, by nature, platforms for social networks. In Second Life, its all about adding value to the community. Companies generally have not gone the extra mile to:

  1. Determine if there is a community within Second Life that they can/should connect with and..
  2. Design a differentiated and sustainable experience experience that adds value for that target community.

While much of the recent coverage of Second Life has been negative, there have also been articles and posts that argue, as I do, that the failure of companies to get the return they were expecting from Second Life lies squarely with the companies themselves. You should check out HBR / Paul Hemp’s take on the debate as well as Marshall Sponder’s great post responding to the Wired story. (Thanks to Greg Verdino for the links)

It should be pointed out that there are organizations, like Pontiac, who have taken a different approach in Second Life and have clearly had different outcomes. It should also be pointed out that Second Life is not the only game in town. Some of the PG-13 rated virtual worlds have taken a much different approach to marketing as part of their overall framework. Unlike Second Life, which imposes minimal restrictions regarding what can be built there, the more youth-oriented worlds have been fairly restrictive and exert significant control over the content that is allowed. Although much more controlled, worlds like MTV, There & Doppleganger, have built compelling social experiences first and then have layered branded items into the experience. These virtual worlds are generally smaller and more focused around an idea or theme. If There.com is a “world”, the Second Life is a galaxy containing many worlds. I think this size and focus difference is important in that it makes it easier to embed marketing messages “globally” within the virtual world.

Coke vs Pepsi

In Second Life, you can go to Coke’s Virtual Thirst and get some freebies, but it’s generally empty. Brand engagement with Coke in Second Life is virtually non existent (pun intended). Pepsi, on the other hand has taken a very different approach to virtual world marketing. Given their orientation toward a younger generation, they partnered with MTV to develop a brand presence in the worlds of Virtual MTVs. At the Virtual Worlds ’07 conference this past spring, Matt Bostwick, senior vice president for franchise development at MTV Networks’ Music Group discussed this in detail. Avatars in these worlds don’t have to go to an island to interact with Pepsi. Instead, Pepsi has embedded themselves throughout the virtual world with Pepsi vending machines, branded clothing, and contests where you can win “rare” branded items. This embedded approach feels more natural. Conversely, a Pepsi Island that I visit to learn about Pepsi in return for a trinket or a dance party seems interruptive, like a TV ad.

What’s your take? What organizations are getting it right in Virtual Worlds and how are they doing it?

6 comments so far

  1. Ultravox Freeman on

    Doug, I agree that the innovation that people are seeing is not around the “traditional” brands. I also like the Pepsi and Pontiac activities which are leading the way in seeing the power of the social aspects and trust of the community. we all need to re-think how people use these platforms for real business and not just do a simple “Flaming Logo vs. Spinning Logo” discussion.

    Michael

  2. Douglass Turner on

    Hey all,

    I would encourage everyone to round up the folks in your organization to take a field trip to the Greenies sim (http://tinyurl.com/2rbwjb). In my view they have cracked the code for what to do in Second Life and are the current benchmark for what to do.

    The sim feels like something crafted from the fabric of the Second Life experience doesn’t it? Playful. An underlying narrative. Offering something back to visitors. It feels a bit disheveled, not complete, and generally improvisational which is part of the charm of Second Life.

    This is not rocket science. It just takes a bit of courage from a client to allow their SL agency to run with an idea.

    Cheers,
    SL: Douglas Douglas

  3. Mike on

    There are definitely a lot of ways to do things wrong in SL. Companies that think they can just get in there and draw traffic based on their name will be very disappointed with their results. People don’t on SL to shop or be impressed upon; they use SL to interact with people and places. Companies who focus on interaction rather than selling will see success.

  4. Adam Broitman on

    Doug

    Great post!
    I totally agree with the statement that marketers need an “differentiated and sustainable experience that adds value for that target community.”
    Well said🙂

    I am writing about similiar things

    http://amediacirc.us/2007/08/10/blame-second-lifei-am-getting-some-focus/

  5. […] came to the same conclusion of many prominent Virtual World observers: Most real world brands just didn’t understand how to approach the medium.  It would not be appropriate to reveal details as Circuit has not done so.  I will say that the […]

  6. Ezenwa on

    the problem with these sites is that people would rather spend time spamming them then actually use them.


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