Frank Rose has an excellent piece in this month's Wired suggesting that advertisers are wasting millions of dollars by building "pavilions" in the 3-D world that nobody visits. Excerpt:
At least 50 major companies have ventured into the virtual world to
date, spending millions in the process. IBM has created a massive
complex of adjoining islands dedicated to recruitment, employee
training, and in-world business meetings. Coldwell Banker has opened a
virtual real estate office. Brands like Adidas, H&R Block, and
Sears have set up shop. CNET and Reuters have opened virtual bureaus
there. It's as if the moon suddenly had oxygen. Nobody wants to miss
out.
Once you put in several hours flailing around learning how to function in Second Life, there isn't much to do. That may explain why more than 85 percent of the avatars created have been abandoned.
On a random day in June, the most popular location was Money Island
(where Linden dollars, the official currency, are given away gratis),
with a score of 136,000. Sexy Beach, one of several regions that offer
virtual sex shops, dancing, and no-strings hookups, came in at 133,000.
The Sears store on IBM's Innovation Island had a traffic score of 281;
Coke's Virtual Thirst pavilion, a mere 27.
The Internet will eventually be full of such 3-D environments; Second
Life might even be one of them. But in the meantime, it's just slurping
up corporate dollars and delivering little in return.
After factoring out all the double-counting of avatars and the overwhelming presence of visitors from Europe and Asia, Rose estimates that all of Second Life at this point offers an audience of maybe 400,000 American a month to advertisers, and they never really tend to group together in any one place (partly because of the technological limitations of Second Life's architecture—each "island" is typically a single processor on a server). Rose also makes a convincing case that ads in video games are routinely ignored because players are too engrossed in the games themselves, trying not to crash their car or avoid being fried by a laser gun, to pay any attention.
Maybe the best way to advertise in such worlds is to give people there something interesting to do, not just set up a virtual store or put up a virtual billboard that nobody cares about. If advertising works at all in such virtual worlds, it won't be the advertisers who come up with the cool in-world destinations and activities. (Bud.tv anyone?).
In virtual worlds like Second Life, advertisers might be better off trying to sponsor islands or destinations that are already popular, just as they do on the Web. And if they want to go beyond that and get consumers to engage with their products or brands in a more immersive fashion, they need to actually become part of the game-play. That would mean somehow getting programmers or in-world designers to incorporate their brands into the virtual experiences they are creating. I'd much rather spend time tricking out and driving a virtual BMW than clicking on a virtual billboard of the same car. And I certainly don't want to go to BMW's pavilion. I'd rather go to an in-world drag race where I can pick and choose from dozens of virtual cars to drive myself.
Open-source software has proven that users are sometimes the best designers with products like the Linux operating system and the Firefox browser. The next logical step is open-source hardware, a movement that is gaining ground in design circles. For instance, Chuck Messer at Tackle Design in Durham, North Carolina has developed an open-source jaundice light for developing countries using blue LEDs that can be manufactured for $75 (versus $3,000 to $5,000 for a similar piece of hospital equipment). And he is also involved with the Open Prosthetics Project, which is trying to bring back an updated version of the popular World War One-era Trautman Hook. Similarly, there are efforts to create open-source computers, cars, telephones, and 3-D printers. There is even a venture-backed company called Bug Labs trying to apply the concept to the commercial realm with what sounds liek open-source consumer electronics. As Fred Wilson, an investor in Bug Labs, cryptically puts it:
