Anything you can do in the real world (RW) you can do in virtual worlds (VWs), only more.
Numerous separate and independent VWs exist where consumer and business-to-business marketing opportunities lie dormant and underdeveloped. But marketers can now establish a dynamic presence in VWs that can position them for the new and future internet (Web 2.0 and beyond) made up of parallel and eventually integrated social networks and virtual worlds.
Marketing within social networks and VWs is becoming a viable means for reaching and influencing the attitudes and behavior of consumers in ways that was never before believed possible.
Experiential marketing in VWs is immersive and real. Millions of people visit VWs, interact with others, seek out entertainment, have relationships, learn, play, earn, and purchase goods and services. They are also conducting sales meetings, training seminars, board meetings, conferences, and new business presentations.
Coke, IBM, Motorola, Wells Fargo, Toyota, Sears, Disney, and others have integrated their respective brands within VWs in different ways. Key to their initial success is the engaging "experience" that is unlike any other medium's.
"When designing online environments, keep in mind the kind of experience you want your users to have. If the experience is compelling, whether it is branded or not becomes a non-issue because if the experience is compelling so is the brand experience," according to José Pablo Zaga, PhD Candidate at the College of Computing, Georgia Institute of Technology.
A virtual world is a computer-simulated environment intended for its users to inhabit and interact with. Participants typically represent themselves in the form of two or three-dimensional graphical characters, referred to as avatars. They can range from simplistic cartoon-like images to realistic human characters to extreme fantasy. My avatar did some time in Second Life as a six-foot rabbit named Harvey, wearing a double-breasted tweed suit.
Marketing in VWs can be compared to event marketing in the real world, but only better. At real-world events, consumers are attracted to a population-surge location, intercepted with a brand engagement experience, and then move on. Virtual Event Marketing (VEM) provides a similar experience, but more.
First and foremost, all activity is measurable; it can be monitored; and it can evolve as needs arise. VEM can be persistent, happening all of the time or intermittently, any time you want. Elements of the campaign can be incrementally modified to maximize effectiveness, or the campaign can evolve on its own and there's never a rainy day to spoil your plans.
The key benefit to VEM is that it immerses a visitor with a brand experience that encourages word-of-mouth and viral marketing that breeds brand ambassadors who influence others in the virtual world as well as the real world.
Some virtual worlds like Whyville.net have been around for eight years, while others—including Second Life, Habbo.com, Kaneva.com, ProtonMedia, Disney World Magic Kingdom Virtual Tour, and Coke Studios—have developed over the past few years. All of them share the goal of providing an immersive environment for people to engage in real and fantastical social and business experiences in a virtual social environment.
Whyville.net is a Pasadena, CA, based, "edu-tainment" virtual world for teen and pre-teens. It has more than 2.1 million registered users who engage in three basic types of activities: social, entertainment, and educational, all in safe, walled garden environment that exceeds all standards established by COPPA.
Within the Whyville virtual world marketers have built relationships with "citizens" that are deeply immersive. Compared with the impact of traditional passive advertising, a presence or advertising in VWs is inherently more fulfilling. People have become averse to traditional advertising (broadcast, print, internet banners) and immune to its influence; however, people in VWs select what they want to do, how often, when, and where; and they determine how deeply they want to get involved.
According to the 2007 Digital Future Project survey by the University of Southern California, Annenberg School for Communication, 43% of Internet users that are members of online communities say they "feel as strongly" about their virtual community as they do about their real-world communities. From a user's perspective, these experiences are often perceived as real.
In April 2006, Whyville established a first-of-its-kind relationship with Toyota Scion, establishing the first ever virtual automobile dealership. This campaign generated breakthrough results. Victoria Pearson, Director of Marketing, Whyville, explains:
Kids in Whyville have built and test driven the Scion more than 1-million times. This compelling, persistent campaign in a virtual world delivers many simultaneous, high-quality primary and secondary impressions on a 24/7/365 basis. Thus, unlike the banner ad and other traditional offline media which are disruptive, a well crafted virtual sponsorship or campaign/event will enhance a user's experience, motivating users to seek out your brand and interact with it on an ongoing basis, rather than actively avoid it. The new frontier of VWs is a marketer's "Holy Grail" and provides an opportunity for marketers to "teach their brands" to users, over hours, weeks, or months. This is the most efficient advertising dollar a marketer can spend.
Another example of how a virtual world can provide value to its users while establishing an experiential brand presence for a marketer is a live concert that was recently staged by EMI/Virgin. This VEM live concert was presented by pop/R&B singer Stacie Orrico in Whyville's Greek Theatre. An avatar representing the performer was on-stage in a virtual stadium filled with the avatars of more than 6,000 Whyville kids and first-time guests. The virtual concert lasted approximately 45 minutes and allowed "citizens" of Whyville to enjoy all of the dynamic activities of an actual concert in a safe online environment.
At the concert, Orrico's avatar previewed songs from her new CD. She also had a live question and answer session with her fans and made several wardrobe changes during the event. Ms. Orrico's virtual outfits were later auctioned on E-bay, with proceeds donated to a charity.
A multitude of opportunities can leverage VW experiences into real-world consumer behavior and real revenue. The propensity for virtual concert-goers to pay to attend live concerts in VWs and purchase music and ring-tone downloads has yet to be established on a wide scale. Still, the sale of virtual Stacie Orrico souvenirs to tap into this enormously engaged consumer base will rival the effectiveness of any medium to date.
Limited evidence shows that a virtual venue for concerts, market research, professional symposiums, consumer education, and the like lead to real world revenue; as results are quantified, we will likely see many more VEM concerts in VWs.
As marketing opportunities in VWs expand, a new breed of marketing communications planner is evolving—one who understands the environment and is not limited by the constraints of traditional advertising and promotion metrics. The Virtual World Marketing Planner can be compared to directors at advertising agencies but with a wider range of talents and insight into reaching and influencing visitors to VWs.
Reach and frequency are traditional metrics that are not applicable to VWs. Entirely new measurement tools need to be developed for this medium, perhaps a "Frequency of Engagement" or "Consumer Virtual Value Index" (what the customer is willing to pay to virtually interact with a brand) and a "Blended CPM" model that calculates the aggregate value of immersive interaction and primary secondary impressions (a user buys a virtual Scion with real currency, virtually drives it around for several hours per week, while also taking his virtual friends for a ride about the virtual town).
There are questions regarding consumer attitude and behavior in VWs that still need additional data points: e.g., how do people determine the amount of real money they will pay for virtual products, whether real-world or virtual brands? Also, when real money is not required to buy, sell, and trade in VWs, how does this affect brand preferences? If a product is wildly successful in a VW, how does this virtual success translate to the RW? If a virtual product achieves success, fulfills a virtual need, can it serve a similar need in the real world?
This leads us to the billion dollar question: Does avatar-based consumer purchase behavior in VWs translate to actual behavior in the RW? If so, how is it similar or different? If not, how can marketers build RW brands in VWs? Or, should marketers build virtual brands in virtual worlds for which consumers are willing to pay real money?
Thom McLean, PhD, of the Georgia Institute of Technology, observes:
Participants in persistent VWs frequently co-mingle their on-line and real-world experiences. They will talk casually about meeting on-line. When they meet the next day they relate their online experiences. How much does their on-line experience shape their real-world interactions? I'm finding that many people don't distinguish between the two modes of interaction. I strongly suspect that a behavior that is reinforced in a virtual world is very likely to manifest itself in the real world.
He goes on to say:
It's clear that the video gaming world has figured out the product placement and advertising appeal of the background scenery in their products. They are following more of a Hollywood marketing scheme, however, which is not, by nature, interactive. There is a fundamental difference between a static billboard in a video game, and the type of brand experience a virtual world can provide.
Creators of VWs have huge startup costs associated with generating content. It is incredible that marketing firms aren't lining up clients to populate these worlds with brand experiences.
The future for marketing RW brands in VWs is certain to be significant. As VWs grow in number and more people are introduced to them, marketers will find their way there.
Dr. McLean, speaking of a recent visit to Second Life, said, "I was astounded by how sterile it felt without the typical product placement that happens in the real-world. There were no brand names or logos on anything. What struck me was how uncomfortable I felt without my familiar brands surrounding me."
This will change with time, as marketers realize that VWs are not a fad any more than banner ads were hoped to be. As marketers and planners are dragged kicking and screaming toward the next iteration of the Internet, they need to educate themselves, and "VW Marketing Planners" need to be very sensitive to the attitude of the people behind the avatars. Brands in a VW must be presented in a way that is compelling and provides an engaging interaction with the consumer.
Christopher Klaus, founder and CEO, Kaneva (www.kaneva.com) says:
Virtual worlds are going to be the next major form of communication on the Internet. Immersive 3D virtual worlds represent a new way in which we can engage with each other and experience a more human element as we make authentic connections with others. In order for the 3D Internet to become a reality, we need to bridge the gap between the 2D web and the 3D environment. Integrating web functionality like robust social networking, collaborative community interaction and shared media with a real life 3D experience will be key to making these worlds appeal to the masses and to unifying the 2D web and 3D experience. As the mass market gets experience with Virtual Worlds, we will see virtual worlds become more widely repurposed for other industries including businesses and education.
Ron Burns, founder of ProtonMedia, a company that has been building private and secure corporate virtual environments for learning, training, knowledge sharing, and collaborative work has a different perspective, dealing with the long-term value of virtual worlds for business use:
What do learning, selling, and marketing have in common? They are all more effective when they happen within the context of a powerful, committed, and knowledgeable community. The best learning organizations and the best marketed products all share networks of loyal advocates. Training an employee on a product or service is very similar to the process of selling that same product or service to a consumer, which is why in the near future, winning companies, will be those that adopt Web 2.0 technologies to foster such communities.
Another consideration for VWs is government regulation in the form of taxation and other legal issues. People have become RW millionaires as a result of transacting their virtual goods in a VW. This is certainly a challenge to the tax codes, because significant income is increasingly being generated in VWs via the selling of virtual products and services. If the profits from these transactions are taxed as if they were RW profits on business revenue, then how far will the federal government reach to regulate activities in VWs that are composed of a global population?
In this context, time-tested promotional tactics such as sweepstakes are worth considering. The sweepstakes industry is regulated by state and federal laws that are meant to protect consumers from fraud. If a sweepstakes is implemented in a virtual world, do real world laws apply? And if someone wins a million dollar virtual currency prize, is there a legal obligation to pay real world taxes on their virtual winnings?
Despite the many questions that have yet to be asked, virtual worlds as a marketing medium are here to stay. Strategic marketers on both the corporate and agency side are quietly building their teams with VW subject-matter experts so as not to be caught short-handed when the talent pool of these experts dries up.
The business of advertising and promotion has adapted to the Internet but will have to reinvent itself for VWs and Web 2.0.
Marketers who have dabbled in VWs recognize the enormous potential of the medium but have ventured only far enough to reveal the tip of the iceberg.
When VW initiatives become a line item in annual marketing budgets and VW planners/directors are an integral part of the planning process, VWs will generate real results.
After all, how many of us were visionary enough to include banner advertising in our media plans after a meeting with the very first banner advertising salesmen who pitched us a few years ago?
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