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Material Living in a Virtual World
Companies are looking to take a piece of Second Life's digital pie because of its explosive membership, but will this move prove virtually insignificant?
For the rest of the March 2007 issue of CRM magazine please click here
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Second Life is a virtual world where the names, places, and people are imaginary; the money, on the other hand, is real. Linden Lab, the creator of Second Life, has done everything possible to make the environment a virtual fantasyland. Users can create a digital representation of themselves, shape their appearance, change their gender, build a dream house, and quite literally sprout wings and fly; however, Second Life is tied closely to the real world. Interactions are in live time and property costs money. As of January, Second Life residents, or avatars, were able to shop via (real-life) credit cards for brands like Sears and Circuit City, which have opened up virtual stores (or islands) in the online environment. Techies might call this heaven, academics a metamoment. For companies, it may spell hot marketing and cold cash. Aimee Weber Studio, a provider of three-dimensional virtual content that specializes in building stores in Second Life, started in 2005, two years after Second Life's launch. Alyssa LaRoche, CEO, says that in the past year business has boomed. "I was getting almost zero requests last April. Now, I have 30 inquiries per week." The expanding prevalence of broadband and an elevated comfort level with social computing have led to explosive growth for Second Life. Now, with more than 2.7 million characters alive and spending in the game (up to $1.2 million in transactions take place daily), it is no wonder that more companies are looking to catch digital eyes. American Apparel, AOL, Circuit City, Coca-Cola, Dell, Sears, Toyota, and Vodafone are some of the dozens of companies that have developed virtual identities on Second Life. Brand presences have come in many forms. For example, at the American Apparel virtual store you can purchase clothing for either yourself or your avatar. AOL has developed a kind of Second Life theme park, AOL Pointe, while Vodafone is creating a Second Life phone network that enables avatars to keep in touch through text messaging and voice calls with the use of branded virtual handsets. Nikos Drakos, a researcher at Gartner, says, "This is a social environment that encourages creativity. There is asset ownership. People are much more interested in putting in an effort at something if they can use it commercially." Indeed, many of the early business transactions in Second Life were user-to-user. Before American Apparel entered the scene, avatars were selling outfits to each other that they had digitally created. Companies hope this natural inclination to creative expression will be mirrored by an attraction to brand names. The novelty of the channel, however, has not allowed time for the effectiveness of brand promotion to be proven.
There are certainly drawbacks to consider before a company builds its own island. As with any online environment, the possibility for embarrassment through connection with unsavory content is real. Both LaRoche and Drakos also cite technical issues in Second Life, and a faster, smarter site might in the near future eclipse this one in terms of popularity. However, Drakos argues that the idea of a complicated connection between the real and virtual world is something businesses must consider. "It's slightly premature to talk about the 3D Internet, but it's important to think about how we interact with the Internet," he says. "This isn't just hype that will die away."
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