Advertising in 3D or Virtual Worlds (Second Life)


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Overview


Advertising in Virtual Realities and in 3-Dimensional Worlds is a newer form of reaching consumers, one that has drawn success for some, and skepticism from others. Companies and brands in all areas of business have utilized the existence of virtual reality to reach their consumers; a cheap form of advertising, many more are jumping in to test the waters of virtual world advertising. The main virtual reality taking in-world marketing to its full potential is Second Life, a virtual world where realistic lifestyles and surroundings are highly emphasized.

Advantages


Advertisers and business are searching more and more to find alternative ways of reaching consumers. Virtual advertising is a new way where customization and flexibility are easy to incorporate into the ads. Companies can sponsor events, place virtual counterparts of actual products in the 3D world, establish opportunities for V-commerce (virtual product sales) and even broadcast ads through virtual malls, radio stations and billboards. The opportunities for creativity are nearly limitless when deciding how to reach the consumer in Second Life. The exposure also creates interactive possibilities where consumers can actually take part in the advertisement or companies' virtual activities.

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The National Basketball Association gives residents a way to interact with their organization in the Virtual Reality


Limitations


In Second Life there are possibilities for residents (the term used to refer to individual avatars) to purchase and sell their land and properties. Because of this advertising has one limitation, that it may not impair view of other residents' assets. Based on content, there is nothing preventing companies from what can be displayed. Also real world advertising must compete with in-world advertising, that is, residents advertising their own assets to other users.

Costs


One of the cheapest forms of advertising, a virtual billboard that has 200,000 impressions (measured a single impression as 15 seconds of cumulative exposure) is valued at $30 which would mean a CPM (Cost per thousand ) of an amazingly low amount at $.15.

U.S. dollars are not used in the game, but instead there is an exchange rate for Linden dollars. Based on the current value of the U.S. dollar the exchange rate varies, but usually within the range of L$260/USD to L$320/USD. During a given day there about 2000 unique visitors to any one “public sandbox,” a place where residents interact, and placing ads runs for L$350/week to L$650/week and ad banners get an average of 1-20 clicks per day, meaning there is some consumer involvement with these ads.

Reach and Frequency


The consumer audience in Second Life is misleading from the claims made about their resident subscriptions. Their front page claims to have 3.1 million residents with a resident being defined as “a login of its software." Clients belonging to the same email are populous and make up about a half a million residents with almost another half million existing on the same IP address. Further into the misleading statistics of residents is that in a given registration period, only 15 percent of residents log in after their first 30 days. If you take out those residents from the remaining 2 million, the number then rests at about a quarter of a million. Finally, one step deeper reveals that only about 15,000 are typically logged on at one time. A typical ad banner gets an average of 1-20 clicks per day. The numbers aren’t bad, but it is important to know an advertiser is not reaching millions of people like the information may make someone infer. All of the members in the Second Life virtual world are over 18.

Impact


The advertising in virtual worlds has led to other areas of society reaching out to people in the virtual world. in 2007, congressman George Miller held a virtual press conference on the steps of a virtual Capitol Hill. The opportunity to involve oneself in an entirely alternate reality is changing consumer behavior, marketing behavior, and reaches into the pillars of our society when government officials are utilizing it. Residents are also using Second Life to make an income in some cases as well. selling and buying virtual property and creating a marketplace for them has evolved from the advertising for in-game and real-world products and services.

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Virtual screen shot of capitol hill

Audience Qualities


The residents in Second Life all are over 18. The users who are loyal to Second Life and are frequent returners to the service are highly interactive and involved within the world.








Success in Virtual Advertising


The Return on Investment (ROI) for many of the companies is not high. The reason many of the companies and organizations are advertising is mainly because of the new medium and they do not want to miss out while it is cheap. This young form of advertising is still in experimental stage, but all agree, it is too good an opportunity to pass up. Those who have been successful in using Second Life to help their cause are:
  • IBM
  • NBA
  • American Apparel
  • Cisco Systems
  • Coca-Cola
  • Dell Computer
  • Intel
  • Major League Baseball
  • Reuters
  • Sony
  • Toyota
  • Vodafone



Related Images



Burnout Paradise
Burnout Paradise

January 2008: An In-Game Virtual Billboard for Presidential Candidate Barack Obama in EA's racing video game Burnout Paradise.


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An In-Game Virtual Poster Advertisement for Playboy in Capcom's Dead Rising 2.

References


McCormick, A.. (2009, July). New virtual worlds to cater for brands. Revolution,17. Retrieved October 27, 2009, from ABI/INFORM Global. (Document ID: 1825491901).
Kaplan, A. M., & Haenlein, M. (2009). The fairyland of second life: Virtual social worlds and how to use them. Business Horizons, 52(6), 563-572. http://www.sciencedirect.com/science/article/B6W45-4WYCT71-1/2/99dfc211a597959e35eb6867e4ba35.
Rolph, Shaun. (2009).The Phony Economics of Second Life. The Register: Music and Media. 20 Feb 2007. http://www.theregister.co.uk/2007/02/20/second_life_analysis.
Rose, Frank. How Madison Avenue is Wasting Millions on a Deserted Second Life. Wired Magazine. Issue 15. Vol. 8. 24 July 2007.
Scott, Amy. (2007). Second Life Gets a Reality Check. American Public Media: NPR, Marketplace. 5 Jan 2007. http://marketplace.publicradio.org/shows/2007/01/05/PM2000701053.html