You Mean Second Life Marketing's Not All It's Cracked Up To Be?
from the hype-hype-and-more-hype dept
It seemed pretty obvious from the outset that all the corporate interest in Second Life was driven more by hype than clear thinking. Company after company set up shop in the virtual world, either coming up with some pointless way to try and do business there, or more frequently, for marketing purposes. The only problem for marketers? Second Life is a pretty worthless place to try and sell people on your company's brand and products. Wired gives a laundry list of drawbacks, but the biggest is that very few people actually use Second Life. As has been pointed out before, the number of active SL users is nowhere near the number of "residents" it's supposed to have. SL claims more than 7 million residents, but that's just the number of how many avatars have been created. Linden Labs, the company that runs Second Life, says that 4 million people have created avatars, but just 1 million have accessed the world in the past month, and less than a third of that had visited in the past week. And within the world, people seem interested in little more than gambling and sex, Wired says. Still, companies that build in-game properties for big corporations say they're doing booming business, thanks to many marketers' lemming-like attraction to fads. A quote from Coke's director of interactive marketing sort of sums things up: "This is not about reach anymore. This is about connecting. It's about establishing meaningful, impactful conversations. So when people ask, 'Why Second Life?' I ask 'Why not?'" It's lovely that he wants to have these "meaningful conversations" with people about Coke. It's too bad that the lack of real interest in Second Life and the marketing efforts within it show people aren't interested in having those conversations with him.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: marketing, second life, virtual worlds
Companies: coke, linden labs
Reader Comments
Subscribe: RSS
View by: Time | Thread
[ link to this | view in chronology ]
Second Life's New Gambling Policy
Guess that only leaves sex then.
[ link to this | view in chronology ]
I wanted to post it too.
First?
[ link to this | view in chronology ]
Hmmm...
[ link to this | view in chronology ]
Gambling and sex...
I am starting to think they may be looking on the the third life pretty soon and they better be careful before they reach number 9 and then....
[ link to this | view in chronology ]
That and big corporate interests.
Oh, nm - one in the same.
[ link to this | view in chronology ]
Here we go again
Well, after all the "Second Life -- the second coming of the Internet" hype, it's inevitable we'd get the "Second Life -- fringe environment for perverts" reaction. Actually, Second Life is an interesting experiment, somewhere between the two extremes. It's worth noting that those population figures leave out something important: the approx. 1.5 million dollars that get spent there every 24 hours.
What's actually happening is that the large companies that are building the Second Life equivalent of "brochureware" web sites are being ignored. Little Mom and Pop outfits that fill a niche and interact personally with people (or avatars) are doing just fine.
[ link to this | view in chronology ]
Well right before the the 'web' got big - a company called Mustang software made a new BBS server program that used TCP/IP.
Prior to that, all the BBS Systems were basically a 'single' pipe communication system. You could check mail, download a single file, or do other stuff - but only one thing at a time.
Second Life - I liken to them. It's a 3D world, that offers a mix of Chat, Music, Video, Code... all sorts of things, but it's pretty 'linear' still.
There's potential there, but it still has yet to mature.
Why gambling is even illegal is quite beyond me.
[ link to this | view in chronology ]
7 million residents
If I want to run around in a virtual world, I'll play something like Guild Wars, Ryzom, or (God help me) World of Warcraft. Ya know, a game that's actually fun.
[ link to this | view in chronology ]
I'm an OLD-TIMER myself...
The ability to actually create in 3D real time, and not worry about gravity is fun for me. I'll never be an architect or builder in Real Life, I suck at math, but in Second Life I'm able to ignore those silly rules of design, like a load bearing wall needs to go there, and gravity has an effect on this, and just build whatever I think is cool.
As far as the Commercial Entities that have been coming and leaving Second Life, I really don't know what the people like Coke were thinking. It's not like I'm going to buy a virtual soda, hold it in my hand, and then break into a song about how we've got the whole world or something.
There are other businesses in Second Life though that have been doing quite well. One Consulting Firm has been taking their "ideas" about what a new bank layout would look like and building it out in Second Life, then inviting their clients into the world to view it. I think this is where a lot of people either don't get it, or just don't understand Second Life. Second Life is an ideal place to build a 3D simulation of a structure you are proposing in Real Life, and having your client(s) get the chance to see it before it's actually built in Real Life. Other then that, I personally don't "get" the other Commercial Entities that come into SL just for marketing, seems a bit off to me.
For me, Second Life has been an enjoyable place to be for the past 4 years. A place where I don't have to follow some static ARC that was put in motion by some game company that doesn't even understand it's user-base. When I want to follow someone else's story line, I'll read a book. When I want to create my own world, I'll go into Second Life.
[ link to this | view in chronology ]
however marketing products in second life can work. but they should head more towards the viral content creation rather than the empty sim approach(there's really nothing to do there except look at their advertisements, it's empty of content and empty of people for that reason).
[ link to this | view in chronology ]
Screw marketing, we are so bombarded by marketing that's mind numbing. I don't even pay attention to it anymore .
[ link to this | view in chronology ]
'Why Second Life?' I ask 'Why not?'
[ link to this | view in chronology ]
If I want to run around in a virtual world, I'll play something like Guild Wars, Ryzom, or (God help me) World of Warcraft. Ya know, a game that's actually fun."
Right on, except I used to play CO.
Also when I first went to second life, I had to walk through an annoying tutorial. Then, I quickly got lost and found myself fallen off a cliff and clueless. I never found any of these companies marketing there. Haven't been back since.
freak3dot
[ link to this | view in chronology ]
I've spoken to virtual world developers from some of the companies that have set up shop on SL. What I think this post is missing, is that companies like Cisco and IBM aren't on SL to do heavy duty branding or marketing. Yes, they do that too, but it doesn't seem to be the main focus. They are on SL because they want to reach out to the development community. I recently went on a tour of IBM Islands. Yeah they have a "sales center" there but more importantly they hold developer events, even have a Redbook Library there as well.
Users of Second Life are definitely a niche crowd. It's probably not an effective marketing channel for a brand like Coca-Cola but will probably be effective for Cisco or IBM or Intel.
...and I say "probably" because this is still all too new to really measure success.
[ link to this | view in chronology ]
Broader Context of Advertising.
Any time an advertiser is talking about monkeying with the customer's subconscious, and the advertiser does not have its own retail distribution network, that advertiser is out to lunch. The retailer can easily create barriers which require conscious thought on the part of the customer, and can use this as a basis to levy "slotting fees," or other discounts. This means that there are whole classes of firms, eg. Proctor and Gamble, Coca-Cola, etc., for whom advertising is basically unproductive. The types of products which these firms make are not such as would give a retailer a competitive advantage. A grocer can get along perfectly well with house-brand soda pop, potato chips, soap, etc. There are a few cases, notably Kroger's, of chain grocers choosing to manufacture processed food in-house on a large scale. Most firms, of course, simply have their label placed on products they buy. The retailer has to ask himself whether it is worth his while to provide a level playing field for substantially identical products, when he could be using his space to carry more diverse merchandise. He can carry a somewhat wider range of "dime store goods," and try to keep his customers out of Wal-Mart or Target. If one looks at supermarket inserts in the newspaper, one will note that they are overwhelmingly dominated by meat and green goods. The idea is to draw customers in with fresh food, and to carry various odd housewares at a reasonable price (not necessarily the lowest price, merely one which does not occasion "sticker shock"), so that the customer does not need to go to the trouble of looking elsewhere for them, and is less likely to be exposed to someone else's green goods. I am informed by a couple of very good cooks (french chef level) that Wal-Mart's line of green goods is much, much better than the firm's general reputation would indicate. Wal-Mart has discovered that it can squeeze name brands, make them offers they cannot refuse, even to the point of destroying the upscale identity of their brand names. All the other retailers are following suit in due course.
The competitive advantage of a firm such as Coca-Cola or Proctor and Gamble consists mostly in its sheer size, its efficiencies of scale, and its consequent ability to be a low-cost producer. Being a low-cost producer does not necessarily mean selling to the consumer at low cost-- it may mean having money available to to pay sales commissions, etc. At the same time, such a firm cannot increase its market share beyond a certain point, because of the long-term implications of the anti-trust laws. This means that the manufacturer tends to get "boxed in," with little scope for growing the business, and no good answers for shareholders who want to reduce administrative expenses. If one compares tables of corporate revenue and advertising expenditure, on finds that over the last twenty years, firms selling common consumer goods have diminished their advertising expenditure, relative to sales, by as much as seventy-five percent, gradually recognizing the new reality of selling through Wal-Mart.
What is likely to happen in the near future is that industrial kitchen machinery is likely to become more automatic. Most of the food items in a supermarket could in principle be made by a single skilled cook working in a kitchen the size of a convenience store, pantry and freezer included. Such goods are made by fixed mechanized plant instead. Suppose this plant is replaced by machinery designed for versatility. For example, the principal ingredient of soft drinks is filtered tap water. One might have a soft drink bottling plant small enough to fit into the back of a supermarket. Such a plant would be able to efficiently bottle ten gallons of one flavor, and then switch to another flavor, without loss of set-up time. The machine would do pretty much what a human "soda jerk" used to do, only with much lower labor inputs. It might even be designed to load vending shelves from the rear. Such machinery will tend to shift the economic balance point in favor of the "vertically integrated grocer."
Television advertising for the kinds of products Coca-Cola or Proctor and Gamble sell has always had a "validation problem." There has never been satisfactory evidence that it worked. However, traditionally, before Wal-Mart, retailers were less aggressive about their own internal operations, and less ruthless in dealing with suppliers. Now all the big grocers and discount chains have computers, and scanners, and they can run programs to work out exactly what is on the shelf at any given moment, how that affects customer behavior, and how much it costs the store to carry a given item. The trend is to sell things in ever-larger packages. The underlying logic is that commodity items are not worth thinking about, and that customers prefer to buy commodity items in very large quantities so as not to have to think about them very often. The other side of the coin is that someone who buys, say, twenty dollars worth of paper plates in a single purchase is likely, for a short time, to consciously think about how much the paper plates cost. If the shopper is plugged into the mobile internet, the situation might be roughly comparable to gasoline stations posting fuel prices on billboard signs. Under those conditions, no merchant can afford to be more than ten percent off the competitive price.
At present, Coca Cola and Pepsi seem to be pre-occupied with buying up exclusive vending rights on public property, such as schools. For the time being, they are able to buy concessions at less than full market value, and probably some people will go to jail before the dust settles. Giving "spiffs" to a civil servant is a criminal offense.
Almost any foodstuff which is readily described by a brand name is an "ersatz" product of some kind or other. The real article, the good stuff, has a description prescribed by a government agency, eg. Orange Juice, Apple Cider, Sharp Cheddar. The brand-name foodstuff therefore has something intrinsically pejorative about it. Hormel Spam was definitively "dissed," by the English peer Lord Renton, in a parliamentary debate, as "...an inedible tinned food that lasted for ever and was supplied to those on active service..." Lord Renton very probably acquired his dislike of Spam in the Libyan desert, circa 1941-42. Of course, soldiers have never been very enthusiastic about their field rations, from Civil War hardtack to the modern MRE.
http://www.publications.parliament.uk/pa/ld200203/ldhansrd/vo030506/text/30506-03.htm
The automakers are something of a special case, because of course they do have their own distribution channels. At the same time, the automobile industry is being driven deeper into car rentals, which are apt to mean paying full baksheesh to an airport authority. If one even wants to park a courtesy van at the baggage claims area, someone has to be paid. To my knowledge, the Ford Motor Company put out a driving simulator program in 1988, and distributed it through shareware channels (PC-SIG, Public Brand Software, etc.).
[ link to this | view in chronology ]