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The Post-Hype State of Virtual World Marketing: What Works, What Doesn't, and Why -- Wagner James Au.

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Presentation on theme: "The Post-Hype State of Virtual World Marketing: What Works, What Doesn't, and Why -- Wagner James Au."— Presentation transcript:

1 The Post-Hype State of Virtual World Marketing: What Works, What Doesn't, and Why -- Wagner James Au

2 A look at the state of virtual marketing since the hype wave began, roughly May 1, 2006, with the cover of this magazine...

3 ... and began cresting with this Wired Magazine article from last July.

4 Meanwhile, the medium continues growing...

5 In terms of numbers...

6 ... and virtual world marketing ROI: Gaia Online Six million monthly active - Scion campaign: Gaians acquired a million- plus virtual Scions last year - More views of the Nancy Drew movie trailer in Gaia than the Yahoo homepage - 200K+ Gaians responded to a Nordstrom clothing style survey

7 Problem: No universally accepted metrics on virtual world ROI

8 We better figure it out, because this is where a large part of the Net audience is going in the next 8 years

9 The biggest success stories in marketing seem to come from virtual worlds with heavy user-created content component... At its core, Habbo is about social interaction, having fun building a world for self-expression and creative experiences. Products... that exemplify these traits or can add to the existing sandbox of UGC game play are a great start. - Jeremy Monroe, director of Marketing and Business Development, Sulake North America

10 Gaia Online community driven not by passive entertainment, but active user-generated activity and group interaction Bulk of Gaia user activity happens outside virtual world: 30% participating in Forums 10% sharing artwork online 10-15% playing multiplayer games (10% in Gaia's virtual world)

11 Advertising/virtual item sales dominate medium Medium is dominated by children/young teens... and therein lies a concern.

12 Potentially addictive medium + Advertising to children/young teens = Regulatory backlash (No matter who wins in November)

13 Backlash and demographic limitations may drive advertisers in search of older users But where will they go?

14 WW... As yet no transition world for those who grew up in them. (But one.)

15 Which brings us back here: what happened, and how can it be avoided in the future?

16 Second Life homepage, December 2006 Inflated user numbers miscommunicated by Linden Lab and misunderstood by most media:

17 Misunderstanding of user- created culture-- SL as an Impression Society "If they like virtual commerce so much, they'll love our [banal real world] commerce too!"

18 Mistaking virtual simulated locations for geographic reality-- not a good idea in a place with instant teleportation and flying avatars. In Second Life, realistic simulations are metaphorical and community- based. "I'm in a New York state of mind" is a literal concept.

19 Consequences: Let's FAIL like it's 1999!

20 Behind the empty marketing sites... An vast Web 2.0 ecology of unnoticed activity (i.e., the long tail of virtual world culture)

21 Web 2.0: Bridge Between 1st & 2nd Life Identity (Or what Gartner's Adam Sarner dubbed "Generation V") Image:

22 In a non-genre, non-narrative virtual world, blogs, video sharing, and other Web 2.0 systems become the world's folklore. I.E., e.g., famed cartoonist Scott Adams gets kicked in the nuts by Dilbert. (Total views: 62K+.)

23 So what kind of marketing works in Second Life, and by implication, other virtual worlds with strong user- generated component?

24 Leverage worlds' unique strengths and characteristics... L'Oreal Paris Campaign in Greenies, 34,000 branded items taken by users

25 Serve existing virtual community needs Harry Potter IMAX campaign via "buzz agents", IMAX credits SL marketing for boosting opening weekend sales

26 Co-branding with the virtual world Playboy Island, among SL's most popular real world company destinations

27 Relinquish user control over branding experience in exchange for genuine user passion and creativity: Campaign for Iron Man movie, Marvel Films

28 SL specific advice: Hold off on mass market campaigns until broader adoption CSI in Second Life, neglibly successful, especially in relation to expectation

29 Think bigger than consumer marketing-- think enterprise-level marketing

30 Questions? "Hamlet Au" in Second Life "Wagner James Au" on Facebook /

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