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Virtual Worlds: The Next Realm in Advertising?

by Bill Nissim  |  
September 26, 2006
  |  11,159 views

What do Major League Baseball, Coca Cola, Well Forgo Bank, the W Hotel, and the American Cancer Society have in common? They all use a virtual realm to reach out to potential customers and supporters in novel ways.

Today, traditional media captures less attention from the younger generation, including the young at heart. New venues that address this demographic are evolving. One such approach to connect to this allusive audience is videogame advertising. Consider Massive Corporation, which is now part of Microsoft. The premise of Massive is to reach "Lost Boys" (ages 18 to 34) who pay less attention to mainstream media.

The advertising spend for this market segment is estimated at $12 billion for television and another $10 million on static product placements in videogames. The challenge for advertisers is a declining use of television due to other distractions (Internet, music, messaging) or simply "skipping" ads via TiVo or other recording devices. Another age-old problem for advertisers is the inability to directly measure results or return on investment (ROI).

Massive Corporation's value proposition was to "insert" a series of ads into select Internet-based videogames, visible during play. Massive worked with videogame publishers to install code into their programs allowing for dynamic advertisements to flow into place cards within the gaming environment. Concurrently, impression data flowed back to Massive to be packaged as data for the advertiser. This data allowed the advertiser to adjust content on an ongoing basis for greater effectiveness.

For the first time, advertisers had real-time data about their ads which where directly targeted to the audience they sought. Since most Internet gaming environments require payment and personal information, demographic detail increased.


Another untapped arena for advertisers is virtual worlds. Places like Second Life and Entropia Universe provide opportunities to interact and communicate with users in ways not achievable through traditional mediums. In these settings, individuals create a 3D "avatar" (human or fantasy characters) and through walking, flying, or teleporting can explore imaginary worlds.

These virtual spaces take shape in numerous forms and may resemble a city street in Amsterdam, a walk through the Louvre Museum in Paris, or standing on the bow of the Titanic—strike a pose as Rose or Jack! As part of your "Second Life," you may acquire land, build a house, and shop at yard sales to buy clothes or home furnishings. Real dollars are exchanged in these worlds, and the lines between fantasy and reality become blurred.

In addition, you may form relationships with neighbors and groups that share similar interests or causes. Innovative organizations may create venues that interest this younger generation and weave their brand into the activity or environment.


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Bill Nissim consults with organizations on strategic branding imperatives. He has helped firms make the transition to Second Life and has fostered brand creation in virtual worlds. Bill has held senior management positions at Fortune 100 firms. Reach him via www.ideawerksstudios.com.

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