Has Second Life peaked?

Gartner analyst Steve Prentice recently predicted a drop-off in Second Life hype, followed by a stablization and eventual trend toward sustainable growth in this burgeoning metaverse. Meanwhile, bloggers and other social media sorts have been debating whether Second Life is so... well, 2006.

Greg Verdino admits that he might have contributed to some extent to the "outing" of Second Life. Verdino earns his chow advising Digitas clients on how to best leverage emerging media and technologies to meet their marketing goals, and he's also leading a virtual tour of Second Life for marketers this week. So lately he's been spending a lot of time leading... well, a second life as a metaverse drifter.

Here, the refreshingly honest Greg offers a balanced view of the opportunities and the risks of doing business in Second Life.

Q: So—Wow. What buzz Second Life is generating these days, both good and bad, on the MarketingProfs blog, on your blog, and around the blogosphere and in the press. Why now?

A: Well, there is certainly some basis to the buzz. Second Life's population has grown tenfold in the past six months or so. Real money is changing hands in-world every day. And some big brands are spending their money to get in there.

On top of that, for better or worse, buzz begets more buzz. But I think we've turned the corner and people are starting to look beyond the hype, weigh the realities, and question whether there is a "there" there. That's what you're seeing now on the MP blog and on a number of other blogs as well.

Q: And what's your take? Is there a "there" there?

A: There is a "there" there, but we're not even in the first inning yet. The total population (never mind the actual concurrent population) is still small, the technology is still relatively unstable, and the community isn't exactly embracing outside marketers so far. But as I wrote in my MarketingProfs article, Second Life quite possibly represents the next generation of online communities or even a whole new way of navigating the Web. And it's entirely possible that Second Life gets "Frienstered" by another metaverse platform (there are dozens of other metaverses that nobody is really talking about yet) that does it better, is more stable and more "friendly" for the average consumer.

Q: So it doesn't sound like you're convinced that Second Life, as a metaverse platform, is sustainable. So why should marketers care about investing in learning about it? And do you think those who have invested in it—like the high-profile examples of Pontiac, Dell, Reuters, American Apparel—will regret their investment in SL?

A: Whether or not any of these companies regret their investments really depends on their goals and objectives for Second Life. But unless marketers go into the metaverse expecting significant (and unrealistic) real world results—increased sales, lifts in awareness and consideration, etc.—they should at least see value in the experimentation and learning.

Whether or not Second Life is the long-term platform of choice, metaverses will only become more and more prevalent over the coming years. With that in mind, Second Life represents a great environment for learning how to integrate into 3D virtual environments, what types of approaches are most well received, and how activities in the virtual world relate to results in the real world.

These don't all need to be about marketing and sales—for example, virtual world implementations can be built to support R&D or employee training initiatives. But the key is doing something now that will set the stage for smarter metaverse integrations down the road.

Q: Blue-sky it for a minute. How do you envision companies will be integrating in Second Life or similar platforms, say... five years out? What's the potential there?

A: I don't believe the brand-island model is sustainable, at least not without some prominent form of in-world promotion that can drive traffic to those islands. But even with that, the metaverse shouldn't really be about simply driving eyeballs; it should be about engaging consumers in interesting new ways and providing consumers with added value in exchange for their attention.

At Digitas, we talk about creating "loyal brands" rather than creating "loyal consumers"—and one of the key tenets is that a loyal brand meets the consumer where they already are. We don't pull the consumer away from what they are doing in order to interact with us. I think there will be a wide variety of marketing applications for the metaverse—and let's be clear, I am defining marketing very broadly to include any touch point between a company and its customers or prospects.

I would expect to see companies leverage Second Life or other similar metaverses as customer service centers, collaboration spaces where consumers can co-create, alongside the companies' own employees, true extensions of their retail or e-commerce environments and rich experiential marketing platforms. To me, one of the interesting things about Second Life is that a number of brands are already trying these things today, even if the platform isn't quite ready. And let's be clear, even if the platform isn't quite ready I am definitely in favor of experimenting with 3D now, while we still have time to test and learn.

Once the metaverse scales and attracts a more mainstream audience, these applications will become more viable and more valuable for marketers.

Q: Are companies experimenting with some of the approaches you describe?

A: Yes—many of these approaches are being tested today. But the issue becomes increasingly how they will be implemented in the future.

Brands will need to find ways to integrate their presence outside of brand island "safe zones" and actually present themselves in other well-populated areas of the metaverse. And when they do so, it should be less about messaging at consumers, presenting "virtual brochure-ware" or selling products. Instead, they should be thinking about the ways in which they can add unique value and make the residents' metaverse experience better.

Q: Can you offer up an example of someone who's starting to think in those terms?

A: One would be VOIP provider Vivox. They have a brand island but, more importantly, they've integrated virtual phone booths around Second Life, outside their brand space. Any resident can download the Vivox client and make free VOIP calls. They even have an entire customer service team dedicated to supporting their Second Life clientele. Free calling for SL residents provides clear value—and even though the brand island is there, residents don't need to hunt it down in order to take advantage of the service. All you need to do is pop into a phone booth.

The upside for Vivox is that once you get hooked on the free calling service, you just might sign up for their paid service. This is smart metaverse marketing.

Q: What are some other metaverse marketing approaches that you would expect to see become more prevalent?

A: Real quick—brand-sponsored avatars that actually participate in the communities, interact with residents and dole out benefits (cash rewards, access to exclusive experiences, discounts, other incentives, and so on); brand sponsorships of existing in-world experiences similar to in-game marketing integrations; the broadcast of traditional ad-supported TV- or radio-style programming into private and public metaverse spaces; the use of "short term" metaverse environments by media companies and marketers that tie in with specific time-sensitive programs.

And finally, I also think that it will be vital for brands to find residents and communities inside the various metaverses that are already engaging in their own grassroots activities that may be brand-appropriate, and then find ways to support those grassroots efforts rather than simply building out their own thing.

In other words, just like in any form of social media, companies should join their customers' communities, as opposed to trying to do it the other way around.

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image of Ann Handley

Ann Handley is a Wall Street Journal best-selling author who recently published Everybody Writes 2. She speaks worldwide about how businesses can escape marketing mediocrity to ignite tangible results. IBM named her one of the 7 people shaping modern marketing. Ann is the Chief Content Officer of MarketingProfs, a LinkedIn Influencer, a keynote speaker, mom, dog person, and writer.