Monday, August 3, 2009

Virtual Worlds Get Down to Business

About two years ago I took a maiden stroll in Second Life.

I signed on, created an avatar and spent several unfulfilling afternoons visiting a mix of islands. Most lacked much in the way of traffic and there was limited interaction among the residents I did happen upon. I haven’t logged on since.

While I understand the appeal of virtual worlds to gamers who test their mettle against distant competitors, these environments have fallen way short when it comes to business relevance.

Granted, some progressive companies like IBM have used virtual worlds for work teams to collaborate. However, my impression is most virtual residents are a curious mix of techie geeks, experimenters and, even, the lonely and desperate. They are not the sort who offers much in the way of value to Strategic Communications Group’s (Strategic) clients.

It may be time though to take a fresh look at the potential business ROI of virtual worlds. For starters, if you believe the numbers, the virtual population continues to swell. (Image source: Open Knowledge and the Public Interest)

Consultancy K Zero recently reported that membership in virtual worlds jumped by 39 percent during Q2 2009 to nearly 580 million. Second Life now boasts 750,000 unique monthly visitors while World of Wars’ subscriber base tops 12 million.

Even the kid-set has jumped into the virtual fray. Habbo sports 135 million registered users, Neopets has 54 million and Club Penguin weighs in at 28 million – most under the age of 15. Consider these online teens (and pre-teens) will be entering the work force in as little as five years.

In addition, industry groups have now formed to help translate the residential traffic in virtual worlds into measurable ROI.

The National Defense University’s Information Resources Management College has played a lead role organizing the Federal Consortium for Virtual Worlds. With a mission to share best practices, this group includes members from all levels of government, academia and corporate enterprise. It’s most recent virtual event attracted more than 500 participants.

And finally, tools have been introduced to help organizations tap into virtual worlds in a customizable fashion, comparably to how Ning enables social network creation.

OpenSimulator is one such offering. This software application allows a user to build a virtual world on the hard drive of a computer and then connect it to compatible virtual environments, such as Second Life.

Last week I sat with a client who explained she has allocated budget in their new fiscal year for a series of events in virtual worlds to communicate with customers and prospects. OK...looks like I need to dust off my avatar and give Second Life another whirl.


Joerg Rathenberg said...

The learining curve to get up to speed in virtual worlds like Second Life requires a certain tenacity.
On the business side, there is a strong trend to engaging customers in virtual environments that are really easy to use, allowing participants of conferences, trade shows and other corporate events to learn, network and connect, without having to board a plane. Unisfair has been leading this effort since 2000.

MarketingSherpa just published a nice article showing that virtual environments have the highest growth (30%), even more than search engines.

Check it out on our facebook site:

Anonymous said...

With the decline of the economy and the slashing of travel budgets, virtual worlds have emerged as a meeting alternative. All of the virtual worlds kids play in are 3D environments, leading one to believe that 3D, like 2nd Life, will be the future. 2nd Life is definitely a challenge to get in and move around and get yourself established, it's hardly for the novice user. Another company that produces 3D virtual worlds for business applications is Digitell. Their VirtualU universe, found at, is geared more for the virtual novice and is a complete turnkey system making it easy for any company or organization to use this technology.

Randy said...

No wonder the virtual world is starting to take off. It's relevant, fun, engaging, and 3D. A web page is a lonely place. A virtual world can be lonely if there's no one there; however, if the place is hopping, it's a killer application.

Stephen Manning said...

Entertainment companies are using virtual worlds to build and maintain brand loyalty and in some cases sell merchandise, even virtual merchandise. Build A Bear and Webkinz do this in a limited fashion. McDonald's has one, Disney Channel does it.

I've thought a lot about this topic. Like you I have had some negative early impressions of Second Life as a business vehicle. Many corporate and government facilities I've seen there, and some of them are actually pretty impressive, tend to be deserted when I vist. And yet I remain very intrigued and optimistic. This technology is in its infancy and there are too many barriers for most users. Ten years from now, we might all be logging into one or more on a daily basis. It wasn't that long ago that many of us thought we had no need to use the Internet to do banking or send mail to each other.

The danger in population numbers on virtual worlds is that they include people who logged in once and never returned, or return very rarely. Average number of visitors per day is more relevant than number of subscribers. Even with that taken into consideration, populations are rising and almost certainly will continue to do so.

Second Life needs to be a lot easier to use. Multiverse has what sounds like a better business model for companies (more control, for one thing) but isn't as well known, at least not yet.

For now, companies that see a potential benefit to virtual worlds should follow one of two strategies: lead, by experimenting with different techniques in-world to see what achieves organizational objectives, or follow -- watch and wait and let others figure it out, and then imitate. But there can be a lot of value in being first.

Objectives for a virtual world presence don't necessarily have to be what we traditionally think of as ROI (number of widgets sold). Recruiting, brand awareness, public education, market research, and publicity are all possible benefits to an organization that establishes a presence now.

Anonymous said...

with the exponential growth of virtual worlds, marketing within virtual worlds is an emerging and effective vehicle.

I think once virtual worlds move to mobile computers and cell phones (5-10 years from now), no marketing team will be able to afford NOT to advertise within virtual worlds.