Brands flocking to Second Life

By Simon van Wyk

Simon van Wyk takes a look into the frenzy of excitement around the rich virtual world of Second Life and what it holds for brand marketers.

BusinessWeek put Second Life onto its front cover in May this year accompanied with the provocative headline “Virtual World, Real Money”. Since then the 3D virtual world has never been far away from the media spotlight.

Now home to close to 1.9 million super savvy, switched on individuals, media coverage has intensified lately for two major reasons. Firstly, there’s an increasing number of brands moving into the space and secondly the link between the thriving, if fledgling, virtual economy and real world US dollars is suddenly enticingly apparent.

It seems that so far most of the money being made in Second Life is a result of virtual land speculation. Just last month, a Second Life property tycoon Anshe Chung, known in our world as Ailin Graef, announced that she had amassed virtual assets worth over $US1 million purely by buying and selling land within Second Life.

But it’s just a game - isn’t it?

Not exactly. The 3D world is attracting savvy digital natives from around the globe and with them opening up major new branding opportunities for switched on brands. Second Life is a virtual world that anyone with a broadband Internet connection can be belong to. In Second Life you create a virtual identity or avatar and live out an imaginary life. In this virtual world using the software’s tools you can hang out, meet people, visit music and film festivals, buy things, build things, create things and sell them all for Linden dollars - the game’s currency. At virtual currency exchanges you can convert your stash of Linden dollars into cold, hard US dollars.

As the site says: “From the moment you enter the World you’ll discover a vast digital continent, teeming with people, entertainment, experiences and opportunity. Once you’ve explored a bit, perhaps you’ll find a perfect parcel of land to build your house or business.”

A thriving economy

Most Second Life residents just hang out there for free. But there is a growing interest in buying land in the virtual world. Happily though, we’re not talking about Sydney real estate values with a typical parcel of land selling for the equivalent of US$15. Businesses on the other hand are splurging on private islands and building stunning architectural masterpieces for their Second Life headquarters or reinventing the retail experience with ambitious landmark designs for their flagship stores.

Of course, it’s not just land that you can buy. Second Life residents can purchase a growing array of products and services from apparel and footwear, cars and hotel accommodation.

For brands that are finding it increasingly difficult to get traction with other forms of media, Second Life offers a halcyon environment - a truly social world where consumers can immerse themselves in the brand. No doubt helping to strengthen the brand appeal in the real world.

The connections across Second Life run deep

The first thing most new residents do is to join a group - depending upon their interests and virtual lifestyle needs. Marketers can tap into this connectivity by creating groups to which interested residents can join and in that way enabling the brand to exercise precision marketing campaigns and enjoy the connectivity inherent within the targeted groups.

So it’s no surprise that for some time now companies have been opening virtual extensions of their businesses in Second Life and using the virtual world as super-charged, technology advanced marketing and communication tools.

From opening up virtual stores or offices, to conducting market research and testing virtual products, Second Life is quickly becoming an effective marketing platform and realising a number of communication objectives, both internally and externally.

For instance, a presence on Second Life could be used to establish employee collaboration and networking opportunities. Or consider the test marketing and research potential. There’s also the opportunity for real world event tie-ins and promotion. Indeed the clothing retailer, American Apparel, proudly boasts a fabulous retail environment in the virtual world and offers a 15% discount to Second Lifers who visit online and later shop in a real world store.

The key aspect of getting into Second Life is to develop the brand within the virtual world and translate products into virtual ones.

A taste of the trend setters

Teleporting is the preferred means of transport in Second Life allowing residents to fly off anywhere in the Second Life universe at a whim. So whilst cars are totally unnecessary, it’s interesting to see that car manufacturers are creating a strong presence in the virtual world in the hope of making a strong impression in the real world.

For instance, Toyota opened a dealership in Second Life in its own neighbourhood called Scion City. Here it sells three models of its Scion which are all fully customisable. The virtual vehicle costs about 300 Lindens - or about US$1.00.

Meanwhile Nissan provides its Sentra to Second Life residents free of charge. Residents pick up their cars from a gigantic vending machine the size of an office building and then take their Sentra for a spin on the Nissan Island test track.

And GM has a Pontiac dealership which sells the Solstice GXP. Like the Toyota Scion, it’s fully customisable and comes in absolutely any colour you want. GM has also created Motorati Island where it is giving away land grants to residents who are interested in spending time in car related projects.

The new retail experience

American Apparel was the first clothing brand to set up shop in Second Life. With its imposingly sleek store, it’s a very cool environment to check out their label. Adidas and Reebok both boast flagship stores on private islands. In the Adidas store, customers can test the bounciness of their Adidas sneakers on a special trampoline, while Reebok extends its real world marketing by only selling white shoes and allowing customers to customise and colour their shoes to their particular tastes.

Serious money

ABN AMRO, the Netherlands’ biggest bank has opened a branch in Second Life that offers financial advice and is set to create a virtual bank that resembles ABN’s real-life branches.

Serious entertainment

SONY BMG Music Entertainment has created a feature-packed space on The Electric Sheep Company’s Media Island. Their space contains fan zones for leading SONY BMG artists with video and audio content. The company plans to experiment with selling music within Second Life directly to residents.

Meantime, Sun Microsystems has created the Sun Pavilion as a better way to reach out to developers and customers than conference calls or webinars.

Whilst Starwood Hotels owner of Westin, Sheraton, and W chains is testing out a new loft-style hotel in Second Life called aloft. The virtual world provides a test market for the hotel’s design and a means to prototype the evolving design.

And respected news service Reuters has opened up a news bureau inside the virtual world and, very smartly, has employed a virtual reporter to cover it full time.

The test market

It’s easy to see why companies are flocking to Second Life. Residents in Second Life are giving companies first hand insights into what they would like to do by enjoying experiences that aren’t quite possible in our world.

And whilst traditional media is losing its appeal, having a presence on Second Life certainly suggests being in touch with the latest trends and an understanding of where the market is headed.

Although the number of residents at 1.8 million and counting is not vast, these residents are pure gold - technologically savvy early adopters - key influencers that are vital to brand building.

Of course the brands spending real marketing dollars to create a presence in the virtual world will need to establish clear measures of success. At this stage, it would be fanciful to expect to generate revenue from such a presence, but the benefits of providing immersive branding experiences will undoubtedly flow through to real world perceptions.

Clearly, for a company considering jumping into Second Life now, serious homework is needed. But Second Life gives consumers an opportunity to engage with a brand on so many levels. And what I think is becoming apparent is that companies will all need to have virtual world extensions of their real world businesses in order to gain a foothold into new products and services development.