Go Virtual: It’s Just Good Business

Gartner Research reported that 80% of Active Internet Users will be in virtual worlds by 2011. They also noted that moving into fantasy worlds like Second Life or World of Warcraft may prove less than lucrative for marketers as the online fantasy worlds really haven’t stabilized and matured as of yet – they just aren’t real.

Still, more and more companies are opening up shop and at significant investment. Buying into the worlds’ fantasy currency costs real dollars, usually US, not to mention hiring employees – usually full time - to manage their company’s presence inside. Overall, Gartner research suggests that companies should investigate this trend and experiment with it but work to avoid significant financial investments right now.

And it makes sense for fantasy worlds like Second Life and World of War Craft. In these worlds, the E-economy is based off of real-world elements but the sales channels are often exploited under false pretenses. Take Toyota, for instance, that opened shop in Second Life but couldn’t sell its virtual car to anyone. Users want to be marketed to in terms to which they relate –terms that can exist and make sense inside the virtual world itself. Why buy a normal Toyota when all of your friends have flying cars or are moving from A to B with their Teleporters.

Understanding How Branding Works in Virtual Worlds

Great branding has long-since been synonymous with instinctive brand integration into a consumer’s life. It becomes successful when the consumer stops saying “I’m thirsty” and instead says “I need a coke.” Understanding this begs the question: even if Toyota had initially had flying cars on offer and sold some, would that have translated into real-world sales and real-world dollars?

The strength in marketing inside of virtual worlds comes when you provide a way to connect to the audience in such a way that the virtual brand still relates to the real world brand. This is best accomplished of course, when companies move into virtual worlds with real-world elements.

Enter Weblo.com, a virtual world based off of the real world. Dubbed “Monopoly on Steroids,” users can buy and sell their favorite cities, states, people and internet domain names – all carbon copies of the real-world. Everything in Weblo is actually a profile page. In this virtual world, a user adds pictures, videos, has a community and interacts with other users through their profile pages built around their favorite people, places and things.

Building profile pages to build a virtual world… sounds like these guys have figured out how to help the average Joe jump onto the Virtual World bandwagon – get good PR for it - and keep the barrier of entry low. I still can’t figure out how to walk around in Second Life so I just haven’t gone back. For $10/hour a couple of days a month, however, I can hire a kid to build a community in the Weblo Virtual World by building a profile.

Going In: Four Questions and Examples

Real-world companies are wise to consider going into Virtual Worlds to offer their virtual services just as they do in the real world – and simultaneously drive brand integration – not just recognition - for their companies. Developing a coherent strategy would consider the following elements (each illustrated with an example):

1) What product or service will we sell virtually? Does it relate to our real world products/services?

In Weblo.com, users need to have virtual immigration papers to a country in order to sell something from that country. You have to “Fly” to this country in order to get the immigration papers. It makes sense to have to take a virtual flight from American Airlines International, Japan Airlines, British Airways, Virgin Airlines or Quantus Airways.

2) Will our presence be offensive to the community or is it relevant, timely and well placed?

Re/Max, Sutton, Century 21: people are buying and selling properties, businesses, cities, states and countries. Once bought, users put them up for sale. How long it will be until one of these companies looks to put their Real-World Real Estate “For Sale” sign on every single page up for sale? Non-intrusive branding, a real-world element and excellent online advertising now make sense. Think further and imagine every one of those signs said real estate and linked back to your company website. That will spur natural site optimization traffic you can’t beat – or pay a fortune to have otherwise!

3) How can we interact and engage with the audience without force-feeding our presence to the user? Can we do it in such a way to make the choice to use our service instinctive?

When people buy virtual world products, they can’t buy insurance. What kind of insurance can you offer that really won’t cost you anything but allow you to brand your products? How about privacy insurance? Or assurance, as the case may be. Users are investing in these virtual assets. Maybe they want to elect to keep their portfolio private. Why wouldn’t AXA Insurance, Geico or AON insure something? They’re already spending a fortune in online advertising. Why not do it in such a way that you can have an additional revenue stream.

4) Is there opportunity for virtual world revenue streams in order to justify the cost of virtual world entry?

Internet Domain Names have previously been limited to the real world but Weblo.com has opened up a new market by selling duplicates of real world domain names in the virtual world. People have snatched up the virtual business.com, money.com, sex.com, credit.com – well, you get the market idea.  Real world domain registrars should consider selling virtual world domains. Then when you go to GoDaddy.com, 1&1.com, NetworkSolutions.com - or any registrar for that matter – you would find that business-dot-anything is gone but available for $1.00 at Weblo. This just makes good sense. Alternatively, you could provide real-world WhoIs data to the virtual world domains sold. Now you’re providing a service, being non-intrusive and opening up revenue streams. That’s gold to the user and to your company’s bottom line.

In all cases, these companies would capitalize on the enormous amounts of press that hits every time a company joins a virtual world. That’s PR for marketing dollars spent and significant natural traffic to your real-world internet site.

Entering the virtual world can make a lot of sense. Just think about the user when you think about your strategy. Your bottom line will thank you for it.

Chris Wade

VirtualReport@Yahoo.com