When I read Frank Rose’s recent article in Wired, “How Madison Avenue is Wasting Millions on a Deserted Second Life,” I felt a distinct sense of déjà vu. I’ve been wandering around in Second Life for the past three months, and what I read in Wired took me back a dozen years ago.
There are many parallels with virtual worlds and the early days of the commercial Web. Back in 1994, when the Web was still embarrassingly known as the “Information Superhighway,” Donna Hoffman and I wrote a short article about future commercial prospects for the Web. We noted that the Web was very different from what marketers had seen before, and that mindless application of traditional business models and current best practice was just not going to work. The conclusion of our 1994 article applies to virtual worlds in 2007, just as much as it did to the nascent Web in 1994:
“This suggests that there will be pitfalls to developing interactive multimedia products and services… [on the Web | in virtual worlds] … A large mass market, deep pockets, and previous mass-media experience alone will not guarantee success. Understanding what customers want, are willing to pay for, and what satisfies them remains deeply misunderstood or understood too little by many marketers.”
Unfortunately, Rose’s Wired article abounds with examples promoting such misunderstandings. Rose is not alone, of course, we see these misunderstandings about virtual worlds all over the business press. For now, I’m going to focus on just three: 1) the deserted world, 2) nothing to do there, and 3) puzzlement over the failure of deadly dull business builds.
Nobody home. First among the misunderstandings is the “deserted world” lament. Rose laboriously grinds down the 7 million Second Life registrations as of June 2007 into 4 million distinct individuals, then further down to 1 million log-ins in the past 30 days, and then down to “100,000 Americans per week to be targeted by US marketers.” One thing that is amusing about this quote is that Second Life residents are just as unlikely to want to be “targeted” by US marketers as Tivo owners are to want to watch commercials. Targeting implies a passive consumer, and we should all have learned the lesson by now that Web-based consumers are active, in control, and if anyone is doing the targeting, it is the consumers who are targeting the marketers they are interested in establishing relationships with. There was a lot of misdirected focus on numbers in the early days of the commercial Web, and from those lessons we should expect that virtual world growth will happen rapidly, but will then be followed by the more important policy concerns about equality of access and the emergence of a new digital divide.
There is quite a bit of hand-wringing about “ghost towns” and “deserted sims” in Second Life. But, the Web as a whole has a much longer tail than Second Life. If you think about the fact that 10 Web sites control 40% of page views, and there are tens of billions of Web pages, the Web is a far more empty place than Second Life. True, there are no crowds in Second Life – the in-world population is widely dispersed throughout the virtual world at any one point in time. But why is this a bad thing, and why would we want to cram avatars into a handful of locations? The marketing obsession with crowds reflects a death-grip on the broadcast metaphor. The problem with Second Life isn’t the emptiness, but the lack of good navigational tools and decision aids. It’s pretty hard to find things in Second Life. There isn’t a good search engine, nor established systems for rating and recommendation. You can ask your friends, but there is no automated social networking yet, so search costs are high.
Nothing to do. The second misunderstanding is a pretty serious one. Rose says, “Once you put in several hours flailing around learning how to function in Second Life, there isn’t much to do.” Well, yes, and after you’ve spend two hours learning a few words of Japanese you aren’t going to be well-equipped to handle an interesting conversation when you visit Tokyo! Second Life has a learning curve; an extremely steep learning curve. It is a self contained and consumer-built world with its own economy, its own sub-cultures and social norms, an ever-present tension between real and virtual identity, and mental maps of how the physical world operates have to be completely revised when you visit Second Life. But just because you don’t have the skill to do it all doesn’t imply “there isn’t much to do.”
There are an amazing amount of things to do in Second Life (for starters, see Mitch Wagner’s list). The real story is not that there is nothing to do in SL, but that there is too much to do, and that it takes considerable skill to become fully engaged in SL. This makes SL a perfect environment to study the concepts of play, skill and flow. The learning process, and the role of play and experimentation in the learning process, is itself a fascinating topic that companies should be studying.
Simulated stores. The third misunderstanding is epitomized by Wired’s quote from Rishad Tobaccowala, “Second Life is not that hard to understand. … I have a store in the real world; I have a store in the virtual world.” Wrong! What is the evidence that consumers want to walk their avatars around inside little toy mockups of physical stores and play “let’s go shopping”? There are way too many mockups of physical stores in “corporate pavilions” in Second Life – they are all devoid of visitors, and this should come as no surprise. There is no demonstrated consumer need for these types of stores. Virtual replica stores are an awkward and tedious navigational interface, and we avatars aren’t going to virtual worlds to simulate a trip to the mall.
What would work instead? One clue is Wired’s observation that Money Island is the top Second Life destination. But you have to think a bit about why that might be the case. Rose’s answer is that people want free money. Think deeper - why do people want free money? So they can do things! But why pay when you do things for free? Because it cuts the learning curve; instead of making virtual clothes or a house, you buy them from someone else, so money saves time and makes life easier. While I’m happy pumping in $10 from time to time to fuel my Second Life Linden Dollar balance, it seems that other residents feel it is worth their time to earn SL currency by doing things they would never do in the real world, like sitting in camping chairs for starvation wages. Companies have a tremendous opportunity to engage SL residents by providing meaningful opportunities for residents to earn SL currency, or by subsidizing SL purchases, or by providing virtual products that actually meet in-world needs (i.e. not a virtual can of coke, but perhaps a virtual iPod that lets me stream my music in-world). There is very little of this today, but eventually companies will figure this out.
So…we’ve learned these lessons before, and we’ll learn them again. Right now, the consulting companies who are building the corporate in-world presences appear to be earning handsomely. The companies paying for the services, however, won’t begin to profit until they begin to understand what motivates people to spend time in virtual worlds.
16 comments ↓
Great insight, and anyone who has a hard time understanding the parallel you draw between SL and the early web (or for that matter the current web) is going to be far behind as virtual worlds gain more and more in users time and attention.
One key part of your article is the observation that (paraphrase mine) the learning curve is only as steep as you want it to be” When you can buy a four bedroom, ultra-modern prefab house for the equivalent of US $1.30, you don’t necessarily need to go to SL architecture school. It’s all about what you want to do there and whether you want to be a creative master or a couch-potato consumer, or something in between.
Good comment Tom - I posted a similar entry regarding a real estate blogging associate who used the Wired article as a proof point when he panned the effort by Coldwell Banker in using Second Life as a presentation tool for a house they are selling in RL.
Tom — this is the best refutation I’ve yet read to the backlash against Second Life. I would only quibble with one small point — anecdotally, the phenomenon of ’social shopping’ is powerful in Second Life, despite the ‘mall UI’ being inefficient by comparison with many tools, including flat web. People frequently shop together or in parallel (sharing information via IM), spreading out through malls in sort of hunter-gatherer process of discovery. And I’m convinced that this will become ever more important as a factor distinguishing 3d from 2d ecommerce as VR population density increases.
Second, to amplify your point about ‘nobody being home’ — people have become disappointed with Second Life traffic before any best-practice has been adopted for traffic driving. Firms with expertise in online audience qualification and content provision to discriminating participants, like CMP Technology, are having no difficulty finding what we’ve come to call ‘hyperqualified’ audiences for Second Life events. Our Dr. Dobb’s Life 2.0 Summit event, held in Second Life in late April, drew over 1000 registrants — the majority C-level and senior software architects from Fortune 1000 globals. These people came to our six-day ‘deep metaverse tech’ show and stayed for essentially the entire event: 21+ hours of content plus additional (unmetered) hours in networking and entertainment; just as they would were they attending a real-world technology event in a destination city.
Businesses interested in engaging deeply with customers can’t, in my view, afford NOT to look at Second Life as a platform and community.
John, actually I completely agree with your comment about social shopping and that point crossed my mind after I posted my piece. Social shopping in SL - for clothes, hair, shape, skin, eyes, avatar animations, etc. - is definately lots of fun and I’ve enjoyed that experience myself. But too many RL companies are focusing upon their SL clone store as the main draw, when in fact the process of shopping is the main event. Also, I think it would be very interesting to study the meaning of RL brands inside SL - at this point in time, I think most avatars would be embarassed to be caught in RL branded clothing! With all the potential to create yourself as a unique individual in SL, who wants to be wearing a mass market brand?
Wonderful read.
It is amazing how in the history of new mediums, companies continue to make the same mistake…trying to replicate the business model of the previous medium. The “if you build it they will come” approach that gave us the first .com flop is exactly what’s happening in Second Life.
SL is clearly not yet a mature medium for the distribution of products and services or even mass advertising, it may never be - but that’s not the point. It is a platform that enables creativity and interaction, which at a minimum should be leveraged by companies and individuals for the development of innovative marketing…in the real world.
I also look forward to the day someone nails the right level of convergence between the virtual and real worlds - the classic example of visiting Amazon and being able to interact with other people looking at the same products I am…
Thanks again for making your insight available.
I agree with Tom on most issues he raises, what interests me with second life is that many consumers are there to experience duality of existence, a parallel life with an idealized self. Many of these consumers dont mind having nothing to do, just being there and knowing that they exist in this wonderful virtual world is sufficient reason. through my recent work I also find characteristic and qualitative parallels between time spent in second life and time spent laying flat on a bed day dreaming; to me second life is a contemporary technological manifestation of imaginitive space which allows indviduals to enact, stage and choreograph a consequence free performance before an audience. This level of agency and empowerement is seldom available in real life. Consumers are not reviewers - they are consumers, and if anything we have learnt about their power, is their ability to accept or reject.
The first article was right, this one is wrong. Ghost Town is correct . There is currently about one sim online for every two people currently online, so many places are empty and people are getting lonely and businesses are seeing fewer customers, more research should be done before just writeing an article.
There is an excellent recent blog article by Mark Bell titled Second Life is Not Empty:
http://www.storygeek.com/?p=99
I think perhaps the question of whether SL is empty or not is related to whether the glass is viewed as half empty or viewed as half full.
Since a mainland region allows 40 avators maximum in it and there are only 2 avators currently online for every sim online, then it is way less then half empty.
Linden seems to now agree with this fact, the proof of that is they have stopped all land auctions for days. In an eariler blog release they had stated they were going to reduce the number of regions released for auction to 8 per day. If Linden themselves, haveing all the true numbers, didnt think there is a current prolbem, why would they themselves stop auctioning all land ? I think Linden’s actions have only confirmed my veiwpiont.
Ellen, you really should look at Mark Bell’s article (see my 9/9/07 comment). He has made some very thoughtful observations that may get you to think about the numbers in a different way.
I have read Mark’s article and will be replying to that shorty. Mainly about Canada haveing a population density of 8.3 /sq mi. If he does the math he wil find out that second life has a population density of less then 3 /sq mi. when there are 40,000 people online, it dosent even come close to Canada.
I apolgise, i made a math error in my last comment, he is correct that Canada has a lower population density.
The correct population density of second life when there are 40,000 people online is 79 / sq mile. Please excuse my math error, i should have double checked it first.
Thanks
For anyone who is curious how big a square mile is in second life, it is roughly 39.5 regions.
Second life is a remarkably unique concept that is somehow related with virtual worlds associated with the early days of commercial web.
Wired is right to assert that “Nobody’s home,” and Tom’s response misses the point by introducing math to “prove” SL is somehow relatively crowded. Experience is king, and the experience of SL is that you can’t find anybody unless you already know their coordinates.
Tom agrees SL has a steep learning curve. Other than a brief interest in SL as a novelty, I can’t find any reason to tackle that curve. It’s kludgy, no fun, pointless… If virtualization is the coming thing, SL is not where virtual worlds will reach maturity.
It’s dangerous to generalize from one’s own personal experience. LingoSlinger may not “find any reason to tackle” Second Life’s learning curve - but many people have found reason to tackle and master Second Life’s learning curve - and have found the experience to be very meaningful. Just as with the early web, it is those early adopters who are the most interesting to study and who will provide companies the greatest insight into what lies ahead.
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