VideoEgg

2008 Ushers in the Next Generation of Virtual Worlds

By blog_editor on Jan. 02 2008

Some people call them virtual worlds, others call them virtual playgrounds, but whatever you call them, sites where avatars and alter egos run wild are in the middle of an extreme popularity growth period. While this subject isn't brand new, the New York Times published a piece this week highlighting the number of new virtual worlds that are slated to launch in 2008, and quoted one media analyst warning, "get ready for total inundation." Most marketing experts agree that marketing in first generation virtual worlds was more about hype than value, but now there is a new crop of sites about to open 2008 that could have significantly better success for marketers.

First generation virtual worlds such as Second Life offered a blank canvas for creative marketers to play with. Because these worlds aren't real, brands can deviate from their standard practices and do things that they would otherwise never be able to do, for example Nissan let anyone virtually test drive their Sentra. On the other hand, who are they are marketing to? Is it an extension or augmentation or someone's real-life identity, or is it their alter-ego? I assure you that my alter ego wouldn't go into VideoEgg everyday and have a sloppy roommate known as "Guns n' Roses Mike."

The issue of who marketers reach in first generation virtual worlds is an issue that the Electric Sheep Company didn't consider carefully enough. Their company helps marketers advertise in virtual worlds and they recently laid off 1/3 of their staff (just before Xmas to boot). And I haven't seen any third-party studies showing that ad recall or, more importantly, purchase intent in virtual worlds is worth the price; also keep in mind that it isn't just a media buy, there are considerable creative costs involved to make that weird pixelated image that is not even close to looking as good print or video.

There is an alternative to marketing within first generation virtual worlds, and that is creating your own fully-branded virtual world. This is where the market seems to be heading. There are fewer general sites like Second Life and There.com opening up, and more sites like Disney's Pirates of the Caribbean and Mattel's virtual Lego Land. Unlike a fully branded micro-site that has a short shelf-life, these new virtual worlds are intended to change with whatever the brand is pushing at the moment. I can see how these could be a massively successful marketing tool that could pick up where DVD sales level-off for media brands, and increase sales of toys and games for others. The major consideration, however, is value. Nickelodeon is said to be investing a staggering $100 million into creating several of these virtual worlds.

I don't doubt that for brands like Nickelodeon that cater to a very young demographic, creating these virtual worlds could end up being a success. They already have a vehicle to drive membership and they have plenty of things to sell and cross promote. But brands that are trying to reach a teen and young adult demo may have a more difficult time attracting active members to their branded worlds - and there is a very significant cost risk. My money is still on social networking sites as the best opportunities to engage teens, but with the possibilities that branded worlds bring to marketers, and their ability to eat up major part of marketing budgets, I will be carefully following their performance this year.

Post by Eric Klotz
Director of Creative Development