In 2006, the USA mainstream media started covering virtual worlds with newfound enthusiasm, although this was far from the beginning of virtual worlds. Virtual worlds and online games such as Alphaville, Ultima Online, and World of Warcraft had existed going as far back as 1997 or even earlier, depending on your definition of a virtual world. While the actual nomenclature is still up for debate, one easy classification that works for most observers is MMOs, or Massive Multiplayer Online, whether games or virtual worlds. Most early views on these MMOs would have labelled them purely as games. However, in 2006, the tone and focus changed with the emergence of an American platform called Second Life, developed by Linden Lab of San Francisco, California.
Second Life was not wholly unique in its feature set, nor was it the first in its segment. However, it did not have a game focus and had no particular goals. Users of the system, called residents, could create free-form objects and experiences. Through word-of-mouth, and later media attention, Second Life grew to a scale large enough that marketing departments started to pay attention. And given the authoring tools and 3D quality, many thought that they could extend their online messaging into this virtual world.
There was another key motivation for companies trying to get their message heard – mindshare and time exposure. With the growth of online services, not only in MMOs but also in social networking and other such services that consume a lot of time and attention, the traditional advertising channels were no longer capturing eyeballs as before. Television watching was down by literally hours per week per viewer. As an example, in Japan, people were playing console video games for tens of hours per week. American consumers were shifting more time to online activities. This is time that was previously spent watching television, reading magazines or otherwise being engaged with other media outlets.
Even in traditional media outlets, advertisers felt a need to change their mix. Viewers now largely record programming and watch on a tape delay, with the ability to skip commercials. The other major viewing model is now YouTube, watching only snippets of programming for highlights, where advertising is either in text form and not yet established. This has led to an increased focus on product placement and paying for implied product endorsement in conversation within the scripts of programmes. Billboards now often include links to related content via Bluetooth content like free ringtones or short-message services (SMS) or hyperlinked colour codes like ZapCodes. These interactive services may be of higher value than purely static advertisements, because every interaction, from download to message requested to ZapCode scan, indicates an active acceptance of the message and therefore implied interest in the product or service. This allows for greater tracking, and more personally identifiable information about the consumer, such as mobile phone number, and associated demographic information. All of this blend of experimental advertising is parallel to Internet-based advertising, which is more aimed at click-throughs and converting passive eyes to actively interested prospective consumers.
The first experiments in virtual worlds were interesting for a couple of reasons. One was that the launches into virtual worlds were not led by agencies, but largely by the companies themselves. The low costs and technology barriers were not well aligned with full service agencies, although specialist agencies like Millions of Us, Anshe Chung Studios and The Electric Sheep Company do exist. Brand, product and service companies set up their own virtual headquarters and islands in Second Life and other virtual worlds, and largely tried to replicate their offline businesses. This had mixed success, with some businesses that translated well succeeding, and others failing almost completely. The experimentation mix was very reminiscent of the early phases of the worldwide web. But the 3D interactive environment demands more attention than one-way web presences. After some time, many of these same early adopter companies have pulled out of virtual worlds.
The key learning from most of these companies is that the level of interactivity in their messaging and presence is directly parallel to their level of perceived success. Another key area of attention for advertising in virtual worlds is that virtual worlds can take tracking and interactivity to a new level, and in many new directions. Companies are literally able to track every single view, click, or action on their content in the virtual world.
The second wave of advertising in virtual worlds is now starting to take shape, and is leveraging those key learnings, along with one other major consideration – which world? The success of these MMOs, both in terms of monetisation and traffic, has led to the launch or growth of other virtual worlds platforms, like There.com, Twinity, Kaneva, Football Superstars, HiPiHi and more. Also, there is now a clearer distinction between virtual worlds and game-oriented MMOs. Advertising in game-oriented worlds is still at a very early stage, and is mostly confined to ads that are completely relevant in context. For instance, Nike or Adidas could succeed in Football Superstars, but no company to date has found a way to leverage World of Warcraft via in-world advertising.
Virtual worlds now differentiate on niches, whether demographic or otherwise. HiPiHi is very focused on the Chinese market, while Twinity and Near Global replicate real-life cities. Habbo and Gaia Online specialise in the teenage market. This is a key consideration for advertising in virtual worlds – does the virtual world context match the product or service being promoted?
A well-defined virtual world campaign now will take all of these factors into consideration. One recent example was of a company who launched a series of virtual clothing based on Hip Hop artists. Their goal was to extend brand awareness of the artists to their target demographic. For that reason, they chose a teenage-focused world, and combined their marketing collateral, namely images and banners, with objects that would be beneficial and interesting for the consumers, in this case fun and attractive virtual clothing for avatars. These items could also be made to include sneak peeks into new music, or include subscriptions to exclusive artist-related content.
For most in the travel or hospitality industries, they will find the real-life virtual worlds the most compelling. This will mean Twinity, with its real-life community of people using their true identities and interactive avatars, or Near Global, with its storefronts. Twinity also provides a wide range of advertising environments, from virtual storefronts to interactive shared video players to billboards to advertising columns in a real city context. This will help make the transition to the virtual world more seamless for most advertisers. All of those objects can be interactive, so that clicking or viewing the content will launch an experiential ad, more likely to be remembered by the customer.
In short, the shift of time focus, the increase of trackability and new levels of interactivity make advertising in a virtual world an attractive proposition for most companies. The second wave of advertising is now taking shape, with more understanding of what makes a virtual world’s ad campaign successful. Companies should consider their target market, the context of their product or service, and which virtual world that they may resonate best within, and set realistic goals for their efforts in virtual worlds.
Jeremy Snyder serves as the VP of Operations for Metaversum GmbH and as Managing Director for Metaversum Asia Pte Ltd. Snyder has been working in virtual worlds since 2006 and has been a frequent contributor to virtual worlds thinktanks such as The Metaverse Roadmap and the Association of Virtual Worlds. Snyder has also presented his thoughts at industry events such as Mapping the Metaverse and the State of Play. Snyder writes regularly at the Metaversum and Twinity blogs. Snyder is based in Singapore and can be reached at email@example.com.