May 062007

NOTE: Based on my sticky post ‘The Brand Owners Guide to Joining the Metaverse”.

As promised a rough transcript of my keynote talk to CeBit last week based on my experience of actually building some Second Life sims, talking to those who use them and creating branded environments that have more usage than any others inworld, so far. There will be a video and/or podcast at some point from CeBit TV and linked from our Project Factory main site but for now lots of ‘nice’ words and this YouTube video I uploaded…

Hello I’m Gary Hayes and thank you for inviting me here to speak at CeBit this afternoon. I hope that by the end of this very brief introduction to virtual worlds, and particularly Second Life, you will be more aware of the major changes that are happening to what we used to call ‘the web’. Virtual worlds are a new disruptive and transformative medium and one that is becoming a significant force alongside our traditional media experiences. But it is still early days. It is the silent movie era, a bit like TV in the late 40s or the web itself in the early 90s – but already virtual worlds are a place where the audience stops being the audience, who become and create their own stories. For those without any exposure to virtual worlds this talk will be a beginners guide and for those who already know something or a good deal about these 3D shared spaces there will perhaps be one or two surprises, Hopefully we will go inworld too if the connectivity gods are with us.

So what do we mean by virtual worlds. In very simple terms they are a bit like MySpace meets the Local Pub meets YouTube meets The Shopping Mall meets Flickr meets World of Warcraft – ok not that simple. We are really talking about non-game based, online spaces where people create new identities and become a part of a larger resident community. There are often no rules, only those set by the inhabitants themselves, this makes it a particular challenge for brands as we will see later (they don’t like to be told how to live!). Many of you would have heard of Second Life, with nearly 6 million registrations at the moment, but there are many others. Habbo is interesting as a simple isometric service for teens now with 76 million registrations and nearly 8 million regular users. Playstation 3 is about to launch ‘home’, a sort of virtual apartment suburbia connected to other PS3 players and EA games has just teamed up with Endemol to deliver what we sometimes call Mixed Reality (cross-over programmes between TV and virtual worlds). There are quite a few others such as, Kaneva and many new kids growing up on the block such as multiverse, croquet or outback online. MTV Networks used the engine to do some extremely interesting TV/Virtual World cross-over services like Laguna Beach, which I sadly won’t have time to talk about. Common to all of them are people using these shared worlds to interact with others around the globe, for hours at a time.

So what are the forces at work here, what is driving this change? Well I suppose there are two key ones. The first is the shift from humans wanting the internet to be more than the rather lonely and non-real time experience to one where as a “participant” they can have real time, collaborative and far richer immersive social interactions. Note I am careful to not call them, the audience – be aware that any media that still thinks of the residents of virtual worlds as audiences are doomed to failure. The second force at work here is to do with residents in worlds wanting to be far more active, creationist and imaginative. They are creating their own experiences versus passively consuming media, such as on TV or via YouTube for example. You have all heard of web 2.0 (blogs, wikis, flickr – the sharing web) well I like to think of virtual worlds as ‘part’ of web 3.0, the real time, co-creative web. It is still about sharing but in a far more natural setting – this is a space where you can walk up to someone and ask -Where can I buy some shoes and will you come shopping with me” versus typing the word shoes into some abstract search engine on the web and spending hours looking at flat pictures. A question I often get asked is, -Is this hype and something that will go away?” Absolutely not. I am old enough to have lived through the dawning of the web and early failed 3D world services, this is totally a part of that on-going evolution and this will now be here for good. The real question that should be asked, and perhaps the focus of my talk, is how are brands and professionals attempting to integrate into these spaces, will they create a virtual paradise or another dotcom burst?

The thing that’s common with all virtual worlds is the real time shared experience, and that should be the key to anyone thinking of setting up a branded space inside these worlds. Participants want to be just that, participants and co-creators. In a world like Second Life (now four times the size of San Francisco around 210 square miles) and where 99% of the content is made by the inhabitants, for a brand to simply plonk some souless buildings, or theme park, or even well displayed real world product falls way short of what the residents actually want. The message that we are getting from the inhabitants is for businesses to -play with me, don’t sell at me.” This is very important. These worlds are extremely ‘sticky’ and inhabitants invest a great deal of themselves in co-creating the environment and the numbers speak for themselves. In second life at the moment there are over 200,000 unique entrants per day spending an average of 4 hours in world – that’s nearly 1 million user hours, and with a population growing at around 30% per month you can see why many other virtual worlds will be popping up in the next few months and years to meet this demand.

Lets have a look at a very short video (which can also be seen on the Project Factory stand throughout the day) showing some of the social activities, the thing that is really driving demand in these environments.

SELF CUT VIDEO -a montage of a variety of experiences” (in background starting up SL if connectivity for demo)

So a brief taste of what goes on inworld, very experiential activities such as dancing, sport, ‘inworld tourism’, education, collaborative building and so on. These are often missed or ignored by the mainstream press. With my other hat on as Director of the Laboratory for Advanced Media Production at AFTRS I am also active in the educational areas in Second Life where collaborative, experiential teaching is growing into a powerful tool – a very vibrant and active community. But who are the real inhabitants? In Second Life it is far from being just young males. The average age is 33 and women constitute around 43% of the total. Interestingly the time spent gender wise is reversed. Of the total time spent by all participants, females account for 60%. Looking at the international split around 31% are from the USA, 48% Europe and 21% rest of the world. Europe is by far the fastest growing area now with growing numbers of English, French, Dutch and Germans so the servers (currently in San Fran and Texas are in the wrong place!). Back to the age question, one fascinating statistic I gleaned last week from Phil Rosedale, the CEO of the makers of Second Life, was that those over 60 years old spend 30% more time in Second Life than those aged 30. Lets try to pop into world now, hopefully, and have a quick two minute wander.

DEMO INWORLD. This space is called the Pond. The one that the Project Factory produced and built for Telstra BigPond. I am not sure who is around but regardless lets have a look at how Second Life works. That is me, the one with the wings and here I am at the main welcome area. Lets go for a short walk, if we meet anyone we may have a chat. It is important to have a welcoming or totally unique environment, look the ripples on the lake, palms, things to do, boating, dancing and of course a popular pastime, flying – (impro a bit here depending on audience reactions). I would like you to notice too how the advertising and brand presence is not ‘in your face’, more about that later. CLOSE DEMO.

Second life is not just about sex, money and griefing. Griefing, by the way, is a term used to describe irritating behaviour, which actually is extremely easy to control. Most of the stories you hear about ‘virtual terrorism’ is really a toxic combination of unprepared companies inworld and the media that likes to find ‘an angle’, just like the real world then. The Project Factory and other Second Life developers have many easy to implement strategies to reduce this to a minimum.

Onto money and opportunities for brands. For the moment it is about getting in there early (first mover advantage), learning about what works and collaborating with the existing resident communities. This both shows that you are ahead of the curve but also open to really having a direct relationship with your customers and most importantly learning from them. It is a way to reach and understand your existing clients and prepare for what will be a mass audience in a very short time. A recent inworld survey by CB News in partnership with Repères asked over 1000 Second Life residents their opinion of real world brands and there were some surprisingly results. 66% believe that the presence of RL brands has a positive impact on SL and 45% of respondents even want more brands because they enhance and give more credibility to Second Life, a realism and make SL more interesting, by increasing the number of residents. But at the moment we are not talking about mass audiences. Successful brand presences, and two of the recent Project Factory builds in Second Life are in the top five, may have anywhere between 30-60 thousand unique visitors per quarter. These will seem like small numbers to some brand owners and advertisers, but, and here is where it gets very exciting, the inhabitants are spending anything between 15 minutes and 6 hours per visit to your brand! That figure is unheard of in almost any other media even more significant and important for those concerned with reach is that those residents are the most active in the blogosphere, and millions of impressions are generated outside these worlds – they tell of their lengthy experiences in the other social networks.

Shopping in virtual worlds is actually fun for the inhabitants and comes up as one of the most popular pastimes. The ability to browse products alongside your trusted friends is more akin to the mall than eBay of course so this is a real opportunity for those who want to attempt to make in or out of world sales. The more progressive companies are allowing consumers to co-design product and even order real world product from within the environment. A simple example. Very similar experiences to real life are being created in these worlds such the shared ‘media’ experience – listening to music, watching movies with others is pretty cool, you can chat and play-around with your fiends alongside the latest film. Dominos pizza realised this early and now allow you to order your ‘real’ pizza while you virtually watch movies with your ‘distributed friends’. Domino’s IT director Jane Kimberlin said “Second Life is where Domino’s customers are and therefore that’s where the pizza company needs to be too.”

How to make money? As is well publicised (in fact I can’t believe I am still talking about this) Linden dollars is the Second Life currency which can be converted into real world dollars. There are some businesses operating in Second Life that are earning real money selling virtual products. These include clothing, dance animations, selling or leasing property, buying even selling shares and the number of Second Life residents generating more than US$5,000 in monthly income has more than quadrupled to 116 in the past year, according to Linden Lab. Also brands who create product inside Second Life own the IP inworld and more importantly they retain it if they move it outside and create out of world, real product, so great news for inworld R&D. But selling things shouldn’t be your focus. It should be about integrating your brand and becoming a trusted addition inside this unique and vibrant social network. You must add value and not just build and run or build and not be around to welcome your visitors. There are way too many empty branded spaces in some virtual worlds. Lets see some of the brands that have already taken the plunge, this is a short edit of a longer video I compiled on the stand and it looks at a few recognisable names.

SELF CUT VIDEO: Motion grabs of branded spaces in world. 3 minute edit of the longer 30 minute stand one.

Quite a few recognisable brands there, so how are they doing?. Well on Thursday last week I went inworld and using the built in Search/Places facility which brings up the standardised traffic figures I looked at the ‘dwell’ traffic for each of them. Dwell is not just how many visits but how much of their inworld time they spent with each of the major brands. Also the inworld traffic measurement is the only real way to compare like with like which is why I am showing it to you. So here are the results.

1. BigPond – 18139
2. Pontiac – 13832
3. IBM – 12850
4. Showtime (L Word) – 7233
5. ABC TV Australia – 6898
6. NetG Training – 6536
7. Mercedes-Benz – 5656
8. Nissan – 4269
9. Mazda – 2827
10. Dell – 2759
11. MTVN – 2317
12. Toyota – 2119
13. Sun Microsystems – 1728
14. Sears – 1596
15. Sony BMG – 1560
16. Cisco – 1521
17. Adidas Reebok – 1351
18. Sony Ericsson – 1242
19. PA Consulting Group – 1138
20. Circuit City -1089
21. Reuters – 1019
22. BMW 842
23. Intel – 829
24. AOL – 797
25. NBC Universal 745
26. American Apparel – 596
27. Starwood Hotels – 35

Great news for Australia with BigPond and ABC (built by the Project Factory) in the top five and this is months after launch, so outside the hype curve. But why are some of the others so low? All those wonderfully designed, branded buildings with lots of things to do? Well to me a couple of the critical elements that many brands have missed are –
Firstly- Creating spaces that are just really nice to spend a long time in. Sounds simple but many corporate builds are just cold and too representational. They should be organic, of value and welcoming and where inhabitants can create their identities inside their own stories. Of particular note is the outback bar area of the Pond which is currently in the top ten of all second life brands itself on a ‘dwell’ basis, but more importantly it is part of a mix of features and functions that you need to create.
Secondly – A space where the inhabitants can create or contribute to the environment. So both The Pond and ABC have sandbox areas where residents (particularly new ones) learn to build and add things to the branded space. Also requests for changes from the visitors to the existing build should be taken seriously and acted on. Give them a sense of ownership of the space and they will thank you which will build trust.
Thirdly – Be authentic and talk to them at an equal level. Too many companies still talk down to their customers as their avatars do the ‘hard sales pitch’ thing. This is a real opportunity to show the human side to the brand, give it personality and again that insight will be endearing to the residents. A major consideration for many brands is to actually commit ‘real life’ people to be in the environment with the visitors 24/7. If you think you wont be able to collaboratively manage the community by factoring in the human resource follow-up, it might make sense not to start at all.

Advertising in these worlds are often seen as a big no, no from those inworld. Especially the old in your face, irrelevant, broadcast ad model. One thing we are experimenting with at the Project Factory is personalized and targetd advertising. This is not some Orwellian (or Minority Report) nightmare, more a way that the environment (at its crudest level ad hoardings) will change dependent on who is around them but there are many more subtle ad R&D experiments we are trailing. We, like many other developers, are learning as we go along and will never assume that this sort of functionality will prevail. An area that we definitely believe is here to stay is allowing residents to creatively interact with your brand or product. So let them co-design new product with you and listen to what they say about your existing products or services. Never before have brands had this opportunity to be so close to the consumer, you are in there with them, in real time, collaboratively.

Companies succeed in virtual worlds when they take much more of a lifestyle approach to their marketing. Whether you choose to go down this road and participate or not, Virtual Worlds will remain to be one of the most compelling ways we will interact socially and commercially in the future. The Project Factory’s virtual world services are also about merging the real with the virtual and creating experiences that are interactive, social and immersive. It is a very exciting time to be involved now at the dawning of this very real, virtual revolution. I hope that this brief talk wheted your appetite. If you want more come talk to us on our stand and check out the website listed here.

Thank you and time for a few questions?

and not mine but a great video about potential for brands (albeit slightly smoke and mirrors re: the interactions in this video) from Text100 and thousands of views on YouTube.

Posted by Gary Hayes ©2007

Jun 072006

Yesterday I chaired the Mobile Content World Australasia 2006 Conference in Sydney and moderated a couple of panels. I gave an opening (provocative as far as an industry conference goes) address and a few people have asked for copies. So as powerpoints were banned (by the switched-on Terrappin organisers), and as my notes eventually turned into a script (I prefer not to read scripts – no room for personalised delivery!) – well I had it to hand. So here it is. Short, succinct and afterwards I list the people on the panels during the day – and when I get time I will give some opinion, add on what I thought of the event, the discussions and a few of the toys I saw such as a 3D phone and some great social network services, very cool.

Where are we? Where is mobile content on its evolutionary path? Is it well adjusted late teens or is it still a screaming adolescent? What are the real signs of maturity in the industry?

I am Gary Hayes, Director of the Laboratory of Advanced Media Production in Sydney, part of a government initiative run through the Australian Film TV and Radio School. We work with major ‘heritage’ media producers to prototype next generation cross-media services. We will have prototyped over thirty eight services by October many of which utilise mobile devices. I am originally from a digital broadcast and broadband TV background and when I was senior development producer at BBC New Media for 8 years I started out by putting the first audio, video and vr services onto broadband PC too. This makes me sound old but this was only ten years ago remember. I also worked in the US for a couple of years developing broadband TV services. The only thing mobile was useful to the broadcaster, when we were beginning Interactive TV services six years ago, was to vote, SMS chat or send in text messages – at premium rate of course. Have things changed that much?

The mobile industry today reminds me to a great extent of the early digital TV and broadband PC days back in 1996/7. We weren’t sure if putting video (or TV as we used to call it) onto the web was really going to work. We were not sure if communities and social networks would grow with any permanence on the web, which in those days were mostly shopping malls and advertising billboards (web 1.0) – and we weren’t sure that people would really use the web to be creative – many thought the web was about email (simple communication) and information. Ring any bells?

On mobile phones, of which the current incarnation has evolved out of the early web so the comparison is slightly flawed, we certainly have lots of walled gardens, chat communities and ubiquitous shopping malls. We have first generation services streaming live video (or TV as we used to call it) and video downloads – and in trials people are using DVB-H for up to 20 minutes a day. We also have games that are catching up to the quality of PS1 consoles of the mid-90s and communities in a sort of trial phase. Then there are the tablets, the iPods, PDAs all part of a convergence as everything becomes connected and we can store all the content you would ever need, at any one moment in time at least.

But mobile devices, particularly connected, location senstive ones have so much more potential, even now. What is holding them back from becoming the epicentre of consumers media universe? Price? Storage? The Experience? Interoperability? Quality of Service? The Business Model itself? ROI or Greed?

In the last five years things have changed considerably on the web – and now web 2.0, as it is called, is flourishing, and millions are actively participating and creating content. Blogs, vlogs, podcasts, shared spaces and mass multiplayer online role playing games are everywhere. People who play online games are not watching TV anymore, in fact they are not doing much else besides these social network based, online games. So why did this happen, what can we learn?

Part of why this happened is that firstly TV, a medium that used to be the media hub, has not evolved quickly enough for the active consumer – who need to share, communicate and participate ‘in’ the medium itself. Sure TV (the form – bite sized chunks of entertaining video) is gradually breaking free of its chains in the corner of the room, slowly becoming connected on the web, but we all know it will have to quickly morph and change its stripes to survive the next decade. Those early broadcast interactive services I had a part in creating or the early TV walled gardens such as Sky’s Open… (RIP) were in retrospect, stepping stones towards the great triple play of IPTV – also known as broadband content delivered to the large screen we used to call ‘a TV’. So why did this happen, what can the mobile industry learn?

People move to where media (their own and that which they pay for) is easily shared, published and moved between all their devices and friends and family. They buy content for themselves and not one device. They go to where their voice is heard and where they can be active participants. Any platform that locks the active ‘panther-like’ consumer in a cage, in the medium term, is doomed to failure. Early web portals like AOL and digital TV walled gardens know this. The mobile industry needs to take stock and grow up. Break down the walls, create interoperable marketplaces that will create traffic, activity and flourish. It also needs to treat the consumer as an individual and it has such potential to be the test bed for real personalisation – in fact that is it’s USP, its saviour and the true thing that can set it apart in the platform jungle. Getting the right ‘rich media’ content on top of each individuals portal in real time, on the move is key and ARPU will increase exponentially.

Speaking of personalisation, or rather customisation, I forgot to tell you I am a flasher. Not in the pants domain no. Dismayed by the amount of relevant rich content on various 3G portals I tried, I decided to flash my Moto v3x phone a few months ago. Yes I joined the dark side of the force, the modder community and now, move ‘my paid’ for content freely between PCs, iPod, PDA and phones. I suspect there are many more that would like to do so too. Beware of that crowd, unless you deliver quickly they will be looking elsewhere and WiFi, WiMax and Bluetooth connected (non mobile phone) mobile devices are getting itchy feet in the queue behind you.
Imagine now Ennio Morricones theme tune as we quickly look at the Good, The Bad and the Ugly of the mobile industry, the themes that we will be exploring in today’s conference.

The Good – three of them:
1 – mobile phones are still the most effective way to connect, mobile people. So we have two sessions dedicated to how mobile communities can increase traffic and ARPU. In publishing consumer content there has been some innovative phone user generated TV shows such as Syamekke in Japan, Cult TV in France and even a dedicated TV channel Tu Media in Korea showing nothing but viewer content. Using the phone as a tool to vlog and publish onto TV will both educate and inspire the audience and inspire.
2 – Another good seachange is at for example. They are creating tools to allow consumers to sell content (ringtones, wallpaper and create webpages) to each other – micro viewer economics that really drove traffic for eBay, MySpace and a few virtual shared spaces on the web like Second Life.
3 – Also in the good camp is the phenomenal success of the mobile phone billing system. Some have called it ‘implied commerciality’ – people accept they have to pay for everything – but that also means people are far less eager to try new things which is also…

…The Bad – to me bad is still the simple lack of interoperability and the walled garden. Interoperability between mobile devices, between operators, and across the off-portal piece – but really, between consumers. Sure things are improving but without simple ways to share and move media consumers will find alternate routes as digital content wants to spread. No one operator can fulfil the need of any consumer so providing easier routes to get to off-portal content is critical and providing a higher quality experience on that journey is even more so. We have sessions looking at fulfilling the promise of 3G and on and off portal internet

The Ugly – We can do so much more to get the right content to right consumers. Personalisation, targeting and easier search are critical. Finding content is sometimes ugly at the moment, no in fact it is very ugly. Deep menus, busy interfaces and superficial content once you get there– we have panels today focusing on the consumer experience and how to create stickiness through usuability that will hopefully help us out of this maze.

OK enough from me time for some statistics now and a look at What Consumers Actually Want from the Australian mobile perspective, from Claudio Sagripanti of AIMIA and Venture One.

Welcome and Opening Remarks from the Chair
Mobile Content State of Play – the good, the bad and the ugly
Gary Hayes, Director, Laboratory for Advanced Media Production

Mobile content industry landscape
What consumers want – results from the Australian mobile phone lifestyle index
Claudia Sagripanti, Chairperson, AIMIA MCIDG and Venture One

International Keynote
Engaging customers through mobile entertainment
Ira Rubeinstein, Executive Vice President,
Sony Pictures Digital Entertainment

TV to Go – Effective programming for the mobile
Jim Shomos, Creator and Executive Producer,
Forget The Rules

Panel Discussion. Carrier Panel session – Fulfilling the promise of 3G
Gary Hayes, Moderator
Michael Padden, Head of Mobile Content, Telstra
Mark Mulder, General Manager of Content and portals, Optus
Adrian Crouch, IPX Country Manager, Ericsson
Richard Sherwood, General Manager of Mass Markets, Vodafone Australia
Scott Taylor, General Manager of Content and Services, 3 Australia

Communities – find the way into the truly viral market
Jennifer Wilson, Head of Mobile, HWW

Panel Discussion – Exploring the benefits of mobile communities
Jennifer Wilson, Moderator
Olivia Hilton, Chief Executive Officer, Jumbuck
James Cleary, Founder and Managing Director, Amethon
Paul Gruebar, Product Marketing Manager Premier and Youth, 3 Australia
Gregan McMahon, Regional Director Australia and NZ, Yahoo! Mobile

Creating a compelling – customer focused experience
Gary Hayes, Moderator
Annie Mackin, Head of Mobile Content, 3 Australia
Cyrus Allen, General Manager, Telstra Product Management, Telstra Corporation
Steve Watson, General Manager Group Portals and Entertainment, Legion Interactive
Oliver Weidlich, Managing Director, Ideal Interfaces
Trevor Goldberg, VP Global Partners, Bango
Arun Gupta, CEO, Mauj Telecom

Mobile Media: Mobile as a new opportunity
Peter Egberts, Business Development Director, South Pacific Region, Netsize

Speed Networking

Creating mobile content differentiation and brand experience through a consistent user interface
Dr. Yan Zhuang, Director Business Development, QUALCOMM Internet Services

Roundtable discussions
Roundtable one: Mobile Communities
Facilitated by Jennifer Wilson, Head of Mobile, HWW

Roundtable two: User Experience
Facilitated by Oliver Weidlich, Usability Specialist, Ideal Interfaces

Roundtable three: Mobile Media
Facilitated by Peter Egberts, Business Development Director, South Pacific Region, Netsize

Closing remarks from the Chair

Posted by Gary Hayes ©2006

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