International: Merging the Real World and the Internet

International: Merging the Real World and the Internet

Author | Source: Advertising Age | Saturday, Apr 19,2008 7:53 AM

International: Merging the Real World and the Internet

I'm sitting in the airport in Venice, writing my first blog post. I've spent the past few days attending the Venice Festival of Media, a conference attended largely by delegates from media buyers for the large networks as well as folks from internet heavyweights like Yahoo and Microsoft and traditional content companies like NBC Universal.

Much of the conversation focused on the "changing media landscape" -- everyone seems broadly aware that media markets are increasingly fragmented, digital is on the rise, social media is a critical piece of online activity and engagement trumps pure reach. Various networks recently announced that they will be mandating training to teach their television buyers how to better understand digital. Yet truth be told, my impression is that despite our industry's best intentions, the problems outnumber good old-fashioned measurable solutions.

In future posts, I'll dive deeper into solutions available today that solve many of these problems. For today, it probably makes more sense to introduce myself to you all and paint a picture of our business.

From 2004 to 2006 I worked at Linden Lab, the company that makes Second Life. While I was there, we grew our product from an obscure 3D virtual world into a place with hundreds of thousands of registered users. One of the things I focused on was bringing the first corporations in to conduct experimental projects -- in doing so I discovered an interesting market opportunity.

Because we were not a content creation company, I would have to find companies to service these corporate clients. Uniformly, the usual suspects (digital agencies, game developers and ad agencies) were completely uninterested. It was their lack of interest that provided the spark for me to start Millions of Us. I believed that Second Life would not be a singular phenomenon, but rather was the start of an entire category that would offer large opportunities for brands and entertainment companies to engage users in new and different ways. Luck and good timing were on my side. What began in my partner's garage 21 months ago is now a 40 person agency representing 1/3 of the world's most valuable brands ranging from Coke to Nike.

In the past two years, virtual worlds have received a great deal of media coverage (arguably too much). Yet much of the coverage is warranted: Gartner Group predicts that by 2011, 80% of internet users will participate in at least 1 virtual world. While Second Life has received about 99% of the media's attention, it only accounts for about 1% of all the users globally. Globally, sales of items in virtual worlds account for $1.5 billion. Those are big numbers and they're just the beginning.

For brands, the key takeaways are as follows:

Virtual worlds are a significant and fast growing market.

Virtual worlds are a subset of social media, which accounts for 30% of consumer internet activity in the US according to Comscore.

Virtual worlds turn the web into a "place," allowing users to connect face-to-face in real time.

Early data suggest that levels of brand engagement in virtual worlds are extremely high. Millions of Us has conducted some 60 engagements in virtual worlds for clients with engagement per user ranging from 2 to 24 hours.

We view the next year as a critical one in the growth of this industry. Several key events will dramatically affect the landscape and opportunities. First, we'll start to see an increasing understanding amongst clients that existing, web-based virtual world communities like Gaia Online, Habbo Hotel and Wee World have very large, active user bases that offer brands the opportunity for powerful results. Second, media and technology heavyweights like MTV and Sony will be scaling up their offerings in the space. In the case of MTV, this means extending the worlds they have built around broadcast properties like "The Hills" and "Laguna Beach." For Sony it is the release of Home, a high definition world connecting users of the PlayStation3 globally. Finally, we'll start to see virtual worlds plugging into existing social networks. There are 550 million users of social networks and as users begin to put virtual "rooms" on their pages, the game will change significantly. Not only will this add scale to the market; more importantly it will allow users to have virtual lives based on their real life identities. This represents a sea change for advertisers and the beginning of the mainstreaming of the market.

So what should brands be doing right now? Most of our clients have moved beyond the experimental phase and beyond experimental budgets. From that perspective, we recommend the creation of a strategic roadmap, with clearly defined goals and metrics. Once such a plan is created, tactics can be map against it and measured.

Second, as an industry, we are still undeniably in the early days. We still lack consensus about a variety of issues from interoperability to metrics. Millions of Us recently put together a coalition of over a dozen of the leading virtual world platforms to begin defining ROI for marketing in virtual worlds. This study, being conducted by Forrester, is an important first step towards defining what needs to be measured and creating guidelines for all worlds to follow.

Most importantly, we need to remember our role as educators and evangelists. This is all very new and somewhat foreign, and we need to continue explaining the space as it evolves and matures. I hope this blog can play a valuable role in that ongoing conversation.


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