Marketing Profs

The Second Life tidal wave has finally crossed the Atlantic and is leaping on European shores. By and large, communication professionals are perplexed about whether they should surf the hype or not.

But, to their credit, they recognize a "PR opportunity" when they see one: Over the last six months, media coverage related to Second Life (SL) increased nearly 150%¹ while SL blog mentions increased 260%.²

But how long will the Second-Life media frenzy last? And if not for PR, what is the value of investing time and money with avatars when marketing budgets are under renewed pressure to deliver real returns from real consumers?

While a reality check is overdue, I would argue that there is more than meets the eye in SL, and there is genuine value to be extracted for brands that are willing to learn the dynamics of the "metaverse" and play by its rules.

Second Life is a land of plenty, not of many

There are over 2.9 million registered users in SL,³ but most reports talk of about 300,000 active users; and it is estimated that concurrent users are only around 20,000.⁴

Marketers are interested in knowing their audience. Reliable estimates on SL demographics are hard to come by, but it is thought that 25-45% of users come from outside the US, mostly from Canada, the UK, Australia, and Western Europe.⁵

SL is developing quickly outside North America, and local European enclaves such as a virtual Dublin or Parioli, a replica of a Roman street, are flourishing. SL users' median age is 32, with an equal gender split.⁶

Residents are marketing-savvy and patriotic

Second Life residents have been busy shaping their "little" world since 2003, but big corporations discovered this vast, untouched land only last year and decided to plant their flags on it.

Some think that Second Life could turn into another ad-funded MySpace. I wouldn't bet on that. The flood of announcements about companies being the first "fill in the blank" in SL has triggered a growing backlash from residents against brands they perceive are invading their turf.⁷  In addition, it is fair to say that the PR value of setting up a presence in SL diminishes over time.

When corporations occupy virtual land, they often go unnoticed. The most popular places in SL are grassroots and resident-run (mostly in the casinos/nightclubs/adult-entertainment arena...). None of the corporate outposts is achieving decent traffic in comparison. According to New World Notes, the only corporate venue that gets decent traffic is Thomson, which offers educational content—i.e., something of value.⁸ A lesson to all?

The right rewards beckon companies with the right expectations

Despite the hype, SL is growing fast. And it is not alone: World of Warcraft passed 8 million players in January⁹ and the BBC is launching its own virtual world for children.¹⁰

Consumers are moving away from watching TV and reading magazines and moving into places where they can be their own director and actor. If consumers are spending more time in virtual worlds, it makes sense for their favorite brands to follow them in their virtual life.

Toyota, Pontiac, American Apparel, Starwood Hotels are among those already established. Philips, ABN Amro and AOL have made announcements for 2007. Even the French Socialist Party has set up an outpost in SL. (Anecdotally: It is the only place where I saw avatars smoking...)