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Second Life’s Potential for Virtual Consumer Marketing

Posted by SIM on April 23, 2007

Latest GMI Poll Reveals Second Life’s Potential for Virtual Consumer Marketing and Branding
PRWeb
April 23, 2007

The latest GMI Poll, powered by global market intelligence solutions provider GMI (Global Market Insite, Inc.), found the virtual world of Second Life is a burgeoning market for real-life brands and product promotion. Fifty-six percent of users believe Second Life is a good promotional vehicle. Only 16 percent say they would not be more likely to buy or use a brand that is represented in the Internet-based virtual world. In Second Life, residents can explore, socialize, participate in individual and group activities, and create and trade virtual property and services with one another.

GMI interviewed 9,529 consumers, representing a broad sample of the U.S. population aged 18 and above. The interviews were conducted online among GMI’s permission-based consumer panel using GMI’s data collection software.

‘Second Life is still in its infancy, and nobody knows if this virtual world has true staying power or is just a fad,’ explained Michael Cai, director, broadband and gaming at Park Associates, a Dallas-based market research and consulting firm specializing in digital and connectivity products and services for the home. ‘What is clear from the GMI poll is that Second Life is a potential, untapped source for marketing and branding. The people at Linden Lab have the opportunity to build out a new platform for promotion, much like Yahoo and Google did for the internet.’

The poll also revealed that many Second Life users go to the virtual world to avoid reality. Twenty-four percent of respondents claim they go to Second Life to escape real life, which they are not satisfied with, while 64 percent present themselves differently. Additional findings include:

45 percent give themselves a more attractive body
37 percent make themselves younger
23 percent give themselves a different nationality
55 percent watch less television since becoming active in Second Life
22 percent have more Second Life friends than real-life friends
29 percent feel Second Life interferes with their real-world social life

About GMIPoll
The Second Life GMIPoll surveyed a total of 9,529 U.S. consumers between March 27th and April 9th, 2007 on the GMI platform. Additional Second Life polls were conducted in Australia, China, Denmark, France, Germany, the Netherlands, Norway, Sweden and the UK. For more information about GMIPoll, please contact GMI (Global Market Insite, Inc.) at info @ gmi-mr.com.

About GMI
GMI (Global Market Insite, Inc.) is the only provider of integrated solutions for global market intelligence for market research firms and Global 2,000 companies. Solutions include market research software, desktop analysis tools, 24x7x365 service bureau, and one of the world’s largest, highly profiled, double opted-in managed panels, providing reach to six million consumers in 200+ countries. Founded in 1999 with world headquarters in Seattle, Wash., GMI has operations on five continents. In 2006, the company ranked #93 in Inc. Magazine’s Inc. 500. For more information, please visit us online at http://www.gmi-mr.com or email us at info @ gmi-mr.com.

Media Contact:
GMI (Global Market Insite)
Cathy GOerz
(415) 321-1883

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Marketing To The ‘New’ Consumer

Posted by SIM on April 6, 2007

Use Non-Traditional Approaches
By Felicia Hudson
April 6, 2007

Technology has changed the marketplace and along with it the consumer. The emergence of new technologies and multi-tasking consumers make it a challenge for marketers to reach their intended audiences. As marketers compete to reach consumers and sell their products, one thing has become clear: Traditional approaches are no longer working.

Joseph Jaffe, president and “chief interrupter” of crayon, will teach marketers how to break through the clutter, get the attention of consumers and generate the sale, as he speaks on “A New Kind of Marketing for a New Kind of Consumer” at the CUES Nexus Conference™, April 24-26 in Dallas.

Jaffe—who describes his company, crayon, as a new kind of marketing company that is equal parts agency, consultancy, training and education, and empowerment—helps marketers and companies make sense of the change that is occurring right now and figure out what comes next, what to adopt, what to embrace, what to leverage and how to do it by using bold, alternative, non-traditional approaches.

“Advertising as we know it—if it does not change, if it does not adapt, if it does not evolve, if it does not become more consumer centric and consumer facing—will eventually become meaningless, and relatively ineffective, to the point where its cost will no longer be justified based on its benefits,” Jaffe says.

Jaffe explains this is because of the increased competition for consumers’ attention. He uses the example that in 1965, when there were only three major television stations—ABC, CBS and NBC—it would only take one commercial on each station to reach 80 percent of the American population. Now it would take over 125.

“Think about people that are on their laptops while they are watching television or instant messaging while watching television,” Jaffe says. “Even just to get in front of a person is not good enough—it does not guarantee success.”

He stresses that even if marketers and advertisers succeed in gaining consumers’ attention, making an impact is critical.

Jaffe, author of the book Life after the 30-Second Spot, uses the metaphor of the three primary colors—red, yellow and blue—for the three traditional approaches to advertising: television, radio and print. He says that because Crayola™ today sells a big box full of 96 different colors, it was the inspiration for his company crayon. He wants marketers to learn to use a color other than just the primary ones.

“I’m not saying television, radio or print should go away,” Jaffe says. “I’m saying that these are just three crayons in the box of 96 and we have to figure out the art and the science associated with choosing which crayons to paint our picture with, in which combinations, in which quantities and in which order.”

Among the many different colors Jaffe describes, the non-traditional approaches that credit unions can use include communal marketing, which he defines as marketing to, through and with the community collectively as opposed to marketing to a demographic segment. This can include Wikis, blogs, podcasts, and gaming—virtual worlds such as Second Life—among others.

“These approaches themselves are different colors in this ever-increasing spectrum,” Jaffe says.

He says that credit unions—even those with smaller budgets should not shy away from using these new and interesting approaches.

“This is not about money,” Jaffe says. “The thing about these (other) 93 colors, as I call them, is that as you move further and further away from saturated television, radio and print—just from a cost-effectiveness standpoint—these approaches become a lot more affordable and I think that’s an encouraging message.”

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Gold Rush Is On For Virtual Worlds

Posted by SIM on March 28, 2007

Corporate Gold Rush Is On For Virtual Worlds, But Approaches Vary Widely
By Peter Svensson
Wednesday, March 28, 2007

NEW YORK (AP) – Companies are flocking to market themselves in virtual worlds, game-like and usually three-dimensional online universes, but the long-term shape of this fledgling industry is far from clear.

“We’re pretty much where the Internet was in the mid-’90s,” said Steve Prentice, a vice president at technology research group Gartner Inc., echoing a view held by other participants Wednesday at the Virtual Worlds conference in Manhattan.

Joe Laszlo, analyst at JupiterKagan Inc., said the virtual worlds are “like the early days of the Victoria’s Secret webcast, where it was crappy, but hot, so everybody went.”

MTV executives touted their TV-show spinoffs “Virtual Laguna Beach” and “Virtual Hills,” which have attracted 600,000 registered users since they were launched six months ago. Almost like the real Southern California, these 3-D online spaces have perfect weather, but in an improvement on real life, its users are all represented by attractive, slim and young online embodiments known as avatars.

These avatars can interact with each other via text chats and commerce, providing a social element that virtual-world pioneers see as more realistic and engaging than chat rooms and MySpace pages.

“When you get people deep and passionate in a community, money just comes out of it in so many ways,” said Matt Bostwick, senior vice-president of franchise development at MTV Music Group, which is part of New York-based Viacom Inc.

As an example of the branding opportunities, Bostwick said MTV has sold more than 11,402 virtual cans of Pepsi. The buyers can’t drink them, since they exist only on the screen, but they act as a form of decoration for their avatars.

MTV’s “Nicktropolis” is growing even faster, with 2.4 million registered users who have logged 7.5 million visits since its launch two months ago, according to Nickelodeon’s executive vice president of digital media, Steve Youngwood.

MTV’s endeavours are “closed” virtual worlds, entirely controlled by the company. Every tree, building and piece of clothing is approved by MTV, though the underlying technology for “Virtual Hills/Laguna Beach” comes from another virtual world, “There,” which was created by San Mateo, Calif.-based Makena Technologies Inc.

The virtual world “Second Life” represents a dramatically different approach. There, users can create, out of thin virtual air, almost any object they can imagine, if they’re skilled enough with 3-D modelling and programming tools.

The freewheeling and in many places sex-oriented spirit of “Second Life” is reminiscent of the early days of the web. The company behind it, San Francisco-based Linden Research Inc., says its goal is nothing less than a 3-D Internet.

But given the wide range of uses for online worlds – games, communication within companies, flirting, self-expression – it’s not clear that a single world is going to dominate.

“There is not going to be one metaverse, there’s going to be a multitude of them out there,” said Corey Bridges, a Netscape veteran and co-founder of the Multiverse Network Inc., based in Mountain View, Calif.

His company is creating a program that will give access to multiple online worlds built using its technology, much like Netscape’s browser gave access to multiple websites, kickstarting the Internet boom of the 1990s.

The technology will include the option to make avatars portable between different worlds, providing a middle road between MTV-style walled gardens and a wide-ranging “metaverse” like “Second Life.”

“Once you can move from one virtual world to another, the growth we have today is going to look pretty stagnant,” said Gartner’s Prentice.

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Virtual Marketing

Posted by SIM on March 27, 2007

Learning To Market In Virtual Worlds
By Daniel Terdiman
Tuesday, March 27 2007

NEW YORK–Think the recent flurry of big media and technology operations setting up shop in virtual worlds like Second Life is a passing fad? Think again.

Starting on Wednesday, representatives of companies including MTV Networks and its Nickelodeon, IBM, AOL and Disney, as well as institutions like Harvard University, the American Cancer Society and the Centers for Disease Control, will gather here for Virtual Worlds 2007, the first major conference designed specifically to promote marketing in virtual worlds to Fortune 500 companies.

“It’s all about the future of marketing and media,” conference organizer Chris Sherman said. “It’s about finding the right partner for whatever partnership you might be looking for.”

The two-day conference comes at a heady time for virtual worlds and 3D social environments. Even as the Virtual Worlds event kicks off, the Accelerating Studies Foundation is readying its formal written report from last year’s Metaverse Roadmap Summit–in which participants were tasked with prognosticating the look and feel of the 3D Web in 2016–and a Congressional committee is nearing completion of recommendations on whether the economies of virtual worlds should be regulated.

Such developments might seem absurd to those people who see virtual worlds like Second Life, There, Entropia Universe and others as little more than games. Yet the list of companies that have staked out space in these virtual frontiers is impressive: Microsoft, Warner Music, Toyota, Major League Baseball, Starwood Hotels, Bain and many others.

That’s why Sherman and his colleagues at Show Initiative, which formerly ran the Austin Game Conference, have decided now is a good time for a conference where media and technology professionals can converge with developers of virtual-world platforms. More than 600 are expected to attend.

“There’s critical mass now,” Sherman said. “There’s a number of people looking at the space; it’s permeated the consciousness of Madison Avenue, as well as Silicon Valley.”

Certainly, one of the main topics–how to profit from marketing in virtual worlds–has drawn its share of skeptics. Their hesitancy centers around the notion that there’s no proven business model for big companies marketing in virtual worlds, and there is little, if any, demonstrated return on investment.

There’s no doubt that those concerns will get a healthy hearing at the Virtual Worlds show. Yet there’s also a level of enthusiasm among participants that comes from the perception that they’re on the cutting edge of what could be the next great marketing canvas.

“It’s not going to be the case that any one company is going to solve a bunch of these issues, and it’s going to take a bunch of companies talking about it,” said Corey Bridges, co-founder of The Multiverse Network, a company that has developed a platform allowing anyone to create their own online game or virtual world. “So even though it’s early in the applicability of this new medium, this show, in particular, has got just a dynamite roster…It’s the best of the best of this market.”

Of course, Virtual Worlds is hardly the first conference devoted to immersive digital environments. Others have included State of Play, an annual event focused on the legal, social and academic aspects of virtual worlds and online games; and the Austin Game Conference, which looks at the latest design and development innovations of such environments.

But this week’s event is the first real business conference devoted entirely to virtual worlds.

Keynote speakers include Jeffrey Yapp, executive vice president of MTV Networks; Colin Parris, vice president of digital convergence at IBM Research; and Matt Bostwick, senior vice president of franchise development at the MTV Networks Music Group.

Panelists, meanwhile, plan to explore such subjects as “Defining your strategy: What does ROI mean to you”; “Integrated marketing: Merging virtual activities with real-world activities; and “Virtual world applications that work.”

Some regular attendees of the other gatherings say they’re excited to go to a place where there’s potential for witnessing change in action.

“For once, I’m actually interested in the subject matter that’s going to be examined,” said Mark Wallace, editor of 3pointD.com, a leading blog about virtual worlds and 3D digital environments. “The panel topics that have been chosen are a lot closer to the kinds of things that the edge thinkers in the space are looking at than they are the kind of mass-market panels you often get at broader conferences, where a lot of what’s going on is audience education, and the real conference goes on in the hallways.”

Wallace, whose blog is a “media partner” of the conference, said he expects to see a high level of expertise on the part of the participants. “It’s almost like this has been set up to be the Davos of virtual worlds,” he said.

At the actual World Economic Forum in Davos this year, Second Life was on many people’s lips–and it is similarly expected to be a major topic of discussion at Virtual Worlds. But there is now a growing list of potential competitors for marketers’ dollars, including Bridges’ Multiverse Network, which is building a virtual-world platform, as well as Areae, a start-up of former Sony Online Entertainment Chief Creative Officer Raph Koster, and There.

The conference will also be a place to see what the third-party companies developing projects in Second Life and other virtual worlds for big clients are up to. And that’s what some attendees are most looking forward to.

“I’m looking to meet with the people who are in charge of levering their existing properties and taking them online,” said John Donham, vice president of production at Areae. “I’m (also) interested in meeting the other developers and seeing what they’re making. It’s a good opportunity to spy.”

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Second Life Marketing

Posted by SIM on March 12, 2007

Second-Guessing Second Life: Is this Virtual Playground Worth Your Marketing Dollars?
by Kenneth Musante
March 12, 2007

The massively multiplayer world Second Life, a creation of 3D software developer Linden Labs, represents a bold new trend in online marketing. Auto manufacturer Toyota set up a virtual city in Second Life so users could test drive an electronic version of the Scion xB compact hatchback. Clothing manufacturer American Apparel opened a virtual store in Second Life that sold virtual versions of American Apparel clothes and used the environment to get feedback on a newly developed style of jeans. Many other companies have followed suit. But is Second Life really a good place to spend your marketing dollars?

Second Life jives heavily with the Web 2.0 mentality. It’s community-based and gives users control of just about everything. In fact, almost everything in Second Life, except for the land itself, is created by users with the scripting and 3D modeling tools provided by Linden Labs. Users buy and sell these in-game creations, powering a growing in-game economy made entirely of virtual “Linden Dollars.” The fluidity of the environment makes Second Life both an attractive and an uncertain platform for marketing.

For a Second Life marketing campaign to be a success, it has to generate word-of-mouth spillover into the Internet at-large. The audience that can be reached directly by a Second Life campaign is actually very small. That entails about 20,000 to 100,000 people over a period of a few months, estimates Reuben Steiger, the founder of Millions of Us, a company that builds campaigns in virtual 3D worlds like Second Life. However, those few who experience the campaign usually spend anywhere from one to five hours interacting with it. “That’s a level of engagement that’s off the charts,” Steiger notes, considering that most online advertisers measure engagement in seconds.

In order to participate in a campaign on Second Life, users have to actively seek them out. The virtual land area in Second Life is about five times the size of Manhattan and growing. Finding a virtual construction requires knowledge of that location’s coordinates through other means, usually a blog post. Those who actively seek out a campaign are already interested in the brand. That, coupled with the high level of interactivity, can create brand evangelists, influential voices online who blog about things they’ve experienced and can amplify the reach of a campaign. “We’ve seen exposure and reach in the blogosphere anywhere from 10-30 million impressions, and we see similar numbers in main stream media coverage,” says Steiger.

In one campaign, Millions of Us worked with Butler, Stein, Shern & Partners to generate spillover by creating virtual screenings in Second Life of a series of funny videos called Hammer and Coop promoting the MINI Cooper S. The series stars Starsky and Hutch-esque crime fighters named Hammer and his buddy Coop, a KITT-styled talking MINI Cooper. Users are encouraged to share different elements of the campaign through other forms of social media. In one instance, they were encouraged to take photos of themselves and upload them to Flickr, Yahoo’s photo-sharing service. The creator of the most popular photo in turn will win a prize.

Still, there is no surefire guarantee that a campaign will resonate with the blogosphere or garner mainstream attention. Millions of Us has had both successes and failures. Steiger believes the key is to make campaigns that are as open-ended as possible to allow for maximum user interaction.

Marketing within Second Life itself also has technical hurdles to overcome. For example, Second Life’s search system makes it difficult for users to find obscure items and locations like the Hammer and Coop screenings. Linden Labs’ user interface is also complicated and confusing to new users, which can prevent them from exploring further into the world.

There is also no way to measure a direct correlation between a marketing campaign in Second Life and sales. Any exposure is currently used for brand recognition and testing. For example, when it created the virtual store, American Apparel also used the virtual space to test people’s reaction to a new style of jeans before they were released in stores.

“Businesses are still going to check it out even if it’s just in their R&D budget,” says Clay Shirky, a faculty member at NYU’s Interactive Telecommunications Program, and a critic of Second Life’s business model. Shirky believes that the number of actual users within Second Life is much too small to have a real commercial impact.

Aside from extra publicity, Linden Labs actually has little to gain from marketers in Second Life. Linden’s income comes from the sale of virtual land, user subscription fees, and Linden Dollars (Second Life currency)-to-US Dollars transaction fees. All advertising and marketing transactions are handled by third-parties like Millions of Us.

Linden Labs’ director of marketing, Catherine Smith, contends that Second Life is a platform that anyone can build on, marketers included. But she was unable to say how much virtual land was purchased by companies and organizations rather than individual users.

“I think a great indication of what’s happening in Second Life would be to look at the velocity of the economy,” says Smith. The economic information is posted regularly on the Second Life home page and details the growing in-game economy, based on the virtual currency of “Linden Dollars.” She encourages anyone thinking about marketing in Second Life to first get involved in the community and get a feel for the culture and then to look at the economic statistics and talk to Second Life software developers to find out what works business-wise and what doesn’t.

So the lesson learned here is to launch a campaign in Second Life, you need the patience to understand the community, the willingness to let users take control of your brand, and the resources to burn if it doesn’t work as-advertised.

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Gamer Rewards

Posted by SIM on March 6, 2007

Say What? Soon, We’ll See ‘Frequent Gamer Rewards’
CNET News
March 6, 2007

On Tuesday, a theater in the Regal Cinemas multiplex in New York City’s Union Square filled up with advertisers, brand marketers, new-media types, and interested bystanders for the PSFK Conference, a series of lectures and panels organized by New York- and London-based trendspotting blog network PSFK. One of the speakers was David Rosenberg, director of emerging media for Manhattan advertising firm JWT, who was speaking on the subject of the cultural shift caused by video games and online role-playing virtual worlds.

Rosenberg stressed that he believes we are seeing a whole new set of economies with online games like World of Warcraft and Second Life–despite the fact that auction giant eBay recently placed a ban on virtual goods.

He posed a rhetorical question to the audience: “How long is it going to be before credit card companies start giving out frequent gamer rewards instead of frequent flyer rewards?”

It’s an interesting thought. I wonder how many Warcraft players would jack up their American Express spending if it meant they could earn themselves some cool new enchanted swords?

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Marketers Allocate More for New Media

Posted by SIM on February 8, 2007

Marketers Allocate More for New Media
by Steve McClellan
February 07, 2007

NEW YORK — Marketers now earmark on average 15% of their media budgets for nontraditional outlets, according to a new survey by the American Advertising Federation. And 73% of those responding said they now allocate up to 20% on emerging or innovative media.

Just over 10% of those surveyed said they still earmark all of their budgets for traditional media, while 12% said they direct up to 40% of their ad dollars to nontraditional venues.

The survey polled approximately 1,000 ad industry leaders, the AAF said.

A majority of those polled (80%) said that the pace of change in media in 2006 was faster than in the previous year. And almost 60% said they anticipate the pace of change to accelerate even more in 2007.

The most surprising innovation in 2006 was the rush to advertise in the Second Life virtual community, with 77% of those polled saying they didn’t see that trend coming. The second biggest surprise was the rise of YouTube, according to more than 60% of the respondents. Third on the list of surprise innovations was the popularization of “mash-ups,” or Web contents that originated with more than one source.

The most expected innovations were the availability of TV programs on the Internet, the mass adoption of text messaging and the rise of social networking.

When asked to rate their own performance at managing and adapting to change, one-third of those polled gave themselves high marks while about 20% said there was a lot of room for improvement.

A slight majority (52%) said they were “more likely to anticipate, prepare for and get out in front of changes in the media landscape in 2007.”(

Among specific media, newspapers (51%) and network TV (35%) were seen as the outlets with “the most opportunity for reinvention.”

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