pROpELLER October 2007 AN OASIS IN THE DESERT OF THE REAL 1 pROpELLER Why do people use the Internet? In the beginning, it was novelty. I can recall my first encounter with the web, sitting in a University science lab waiting patiently for an image to download from half a world away. From memory it took about one hour to complete, yet at the time the minutes passed like nanoseconds. At that time, the web had yet to escape the confines of academia where it had resided for almost two decades. Then in 1991 the Internet soon crossed over to the mainstream thanks to the intervention of Tim Berners-Lee, who created the World Wide Web as a form of indexing, organization and standards control. This in turn has brought about the second age of the Internet, based on entertainment, enabling and escape. Or maybe it should be termed the second life of the Internet, given how much of that new bandwidth is taken up with virtual worlds. As we will see, however, the killer app of the Internet as a social networking tool remains unchanged. The concept of virtual worlds first surfaced in a work of fiction. In his 1992 novel Snow Crash, Neal Stephenson imagined a virtual environment called the metaverse in which people could create virtual ‘avatars’ of themselves and control them right down to the most subtle facial expressions. Today, the virtual is becoming reality. World of Warcraft is easily the most popular of the Massively Multiplayer Online Role Playing Games (MMPORG) and has over eight million subscribers (although they prefer the term residents), according to BusinessWeek online. Plus it is growing at a faster rate than any real-world city. Second Life, by contrast, is a Virtual World rather than an MMPORG and with a much smaller population at just over one million residents according to BusinessWeek online. However, it is growing at a rate even faster than that of World of. But there are other reasons why Second Life is the world’s most virtual environment. Unlike World of Warcraft, the boundaries between the physical and virtual worlds of Second Life residents are often porous. People use hard currency to buy virtual property, real brands set up virtual shop fronts and actual discussions take place in virtual settings. All are part of the Second Life experience. There is a reason why some residents call Second Life ‘the new golf ’. According to BusinessWeek online, one resident of Project Entropia, a Second Life competitor, paid US$100,000 for a virtual space station he hopes to rent out to other players. October 2007 pART ONE OF A THREE pART SERIES 2 Virtual Worlds are evolving so rapidly and are being embraced by such a large number of people that the impact on branding, marketing and Baudrillard called advertising will be immense. For us to understand the impact, however, the end result ‘the requires examining the scientific and philosophical dimensions. desert of the real’ Simulacra A French intellectual, Jean Baudrillard, wrote in his book Simulacra and Simulation that the modern world had become so media-saturated as to be devoid of all genuine meaning. Science played a part, too. Cartography had become so advanced, he said, that people now place more value on the map than the landscape. Baudrillard called the end result ‘the desert of the real’. His work directly inspired the creators of ‘The Matrix’, so much so that the character of Morpheus quotes this exact phrase. If we extrapolate current trends out by one or two generations, it is not inconceivable that a variation on The Matrix will be realized – with the crucial difference that people will have chosen a virtual reality, of their own making. Consider bowling. Ten years ago, sociologist Robert Putnam highlighted ten-pin bowling as symbolic of the way in which the US had become a fragmented, disjointed place. Whereas Americans used to bowl as part of suburban leagues, now most are ‘Bowling Alone’ (the title of Putnam’s book on the subject). Well, the bowling league is on the way back. Except now we have virtual bowling leagues, powered by the Nintendo Wii console which simulates sporting actions in a digital environment. The average age of the Wii user is 47 and retirement homes across the US are ordering them in bulk. While the visual output of the Wii is clearly computer-generated, the digital special effects in many recent Hollywood movies are photo- real. Imagine this level of detail in a virtual world. We can see it emerging now. Wired magazine has just opened a new headquarters. It is an impressive building for a publication with a circulation of only 600,000 people; a 50 story glass and steel structure with state of the art work, meeting and conference facilities. If you have trouble finding it, it is just down the road from CNet and near Reuters. You will need a computer to find any or all of them, though, as these buildings exist only within Second Life. There is of course an element of gimmickry to these efforts and the real world brands behind them admit as much. Still, some other brands have jumped in with both feet. 3 pROpELLER Intel, for example, has found Second Life to be a valuable environment Clearly, brand for seminars, training and inter-office collaboration. It is now taking owners must the place of video-conferencing in many business units, with employees interacting online using their respective avatars as opposed to being adapt to this filmed in meeting rooms. brave, new Further, advances in motion-capture technology will one day make and purely it possible for the smallest and most subtle facial expression to be virtual world received and transmitted in a Second Life meeting. Brave New World Clearly, brand owners must adapt to this brave, new and purely virtual world. In-game advertising is one of the most rapidly evolving segments of the media market, expected to grow from US$176 million in 2006 to nearly one billion dollars a year before the decade is out according to BusinessWeek online. Most brands that have entered virtual worlds have done so as if they were basically an extension of the physical environment. Ford has experimented with product placement, allowing players to drive virtual Volvos, while Coca-Cola has bought space on virtual billboards, bus shelters and other media. Other brands have been slightly more lateral in their approach. Lacoste recently ran a contest in the form of a fashion parade in Second Life with a prize of one million virtual dollars to the best avatar model. Calvin Klein has created a virtual variant of its CKIN2U fragrance purely for Second Life avatars. While such tactics may help generate awareness and recognition, they do not necessarily serve to enhance their respective brands. Moreover, gamers of all ages have a tendency to share a liberal, anti-authority streak, meaning that the wrong commercial message could result in rejection and negative brand perception. It is also important to note that a game is a game, at the end of the day. Unless it can establish a completely secure environment with controlled access, any company that deals in sensitive issues or personal well-being (e.g. life insurance, healthcare, wealth protection) may want to steer clear. But a brand in the content creation business such as Apple, Sony or Disney would be well suited to this context and run a low risk of player rejection. Viacom, one of the biggest media companies in the world, has already taken the plunge and has produced virtual versions of TV shows such as Laguna Beach. As all forms of media become fully digitized the virtual world possibilities of books, film and television will begin to multiply. One October 2007 pART ONE OF A THREE pART SERIES 4 can imagine that in the near future, media will not only be bought online but consumed there as well. The printing press may finally be a thing of the past, dramatically improving the economics of the publishing industry. In fact all products and services that exist in a purely digital form stand to benefit. For example, virtual worlds use their own form of currency and an enterprising (and appropriately branded) financial services firm could carve out an extremely profitable niche. Ginko, the most popular bank in Second Life, would no doubt agree. But even tactics such as these are only skimming the surface of what a virtual world can offer in a commercial context. To fully grasp the potential, one most stop thinking of Second Life and its ilk as channels and start thinking of them as a new, virtual wing to be added to the business itself. As with other forms of Internet marketing, the key to virtual branding is to understand and adhere to the principles of the medium. The use of virtual worlds must be done in a way that preserves the core brand personality and proposition while meshing seamlessly with the aesthetics, purpose and spirit of the game. To begin, that means treating the virtual space as 3-D rather than 2-D. For any business with an e-commerce platform, this has tremendous implications. Rather than a basic list of products, services and prices one is now free to create a virtual store where residents can roam, browse and test the product before buying. In this sense, the physical retail environment can be built, enhanced and extended in a virtual setting. But it should never be an exact duplication, nor should it conform to the rules of the world into which we are born. The last thing a resident of Second Life wants to be faced with is real life. As Neal Stephenson wrote in Snow Crash, what draws people from the physical world and into a virtual environment is imagination – their own and that of other people. To attract attention, marketers must apply the same level of uninhibited creativity to their brands as residents do to their avatars. That means finding other ways of representing brands, product and services beyond graphic identities, logos and photos e.g. developing visual metaphors around the feelings evoked by the consumer instead of tangible attributes. Another key element may be a visual identity that is constantly evolving, in line with the virtual worlds themselves. Where virtual worlds may offer the most value, however, is as a Petri dish for new ideas. One can easily imagine market researchers 5 pROpELLER replacing the focus groups and concept testing of the physical world with the placement of new brands, products and services in a virtual context and measuring the resulting resident reaction. The strongest ideas, developed via collaboration with residents, could be commercialized for use either solely within a virtual environment or could cross over into the physical world. Given the growth of Second Life in both popularity and resolution, it will not be long before it serves as a perfectly valid test bed for the real world. However, as noted earlier it should never be a complete simulation. The imagination applied to virtual branding should extend to the ideas that are to be tested. That means free and open experimentation of often outlandish concepts rather than a conservative and grounded process. “We can and we should use synthetic worlds as unregulated playgrounds for economic organization” says Edward Castranova, a leading authority on Second Life, in his book Synthetic Worlds. As any resident could tell you, there is no point to simply recreating your First Life. Emergence The long-term commercial applications are even more significant. Virtual worlds may even precipitate a revolution in the way brands, products and services are developed – one based on the concept of emergence, the governing principle behind the theory of evolution among other scientific insights. To understand emergence, consider an ant colony. Individually, an ant can achieve very little. As part of a colony, they can join forces, divide tasks, create and survive. The human brain is another example. Individual neurons are largely useless but linked up they are capable of almost anything. Brands, products and services have traditionally been created by a small group and then made available to many people. This is a one- way mechanism that runs contrary to other human endeavours, such as politics and capitalism, where two-way communication is the norm and bottom-up governance prevails. Now brand owners have the ability to transcend the cost, complexity and constraints of traditional product and service development by turning ideas loose inside a virtual world and letting the strongest survive. After all, what is market research and concept testing but virtual reality on a small scale? Emergence also has the potential to turn the Internet into the truly level playing field it has always threatened to be. Imagine amateur architects bidding for jobs alongside professional firms or amateur Think ahead. Stay ahead. www.futurebrand.com pART ONE OF A THREE pART SERIES 6 creative directors pitching for advertising assignments alongside Gavin Coombes Madison Avenue’s finest. CEO FutureBrand Asia Pacific For once, the possibilities literally are endless. And commercial Gavin Coombes is the Asia businesses need not feel threatened, as emergence can be good for Pacific CEO of FutureBrand. business. For an example, one need only look as far as Second Life Previously, he worked in and the way in which its creators work hand in hand with residents to journalism, public relations, develop the environment. advertising and Internet marketing and has contributed Early on, Second Life programmers worked night and day to keep to the development of brands the virtual world full of new ideas. However, it quickly became clear such as Visa, Chevron, Intel that residents would much rather create their own stuff. The value of and Microsoft. programming contributed free by Second Life residents is estimated at US$400 million each year according to BusinessWeek online. Cover art: DESERT The owners of Second Life discovered that people will perform the Chris Siarkiewicz most mundane and repetitive tasks if they are in the context of a game. Designer Now, Silicon Valley start-ups such as Seriosity are trying to find ways FutureBrand New York of commercializing this trend and extending the benefits to other sectors. If that puts you in mind of ‘The Matrix’, where human beings are wired to provide the energy for machines, you are not the only one. But ultimately I take a more optimistic view on the future of virtual worlds. As ‘Dilbert’ creator Scott Adams said, in possibly the truest phrase ever uttered on this topic, “the Internet is just us”.