May 312011
 

I promised quite a few folk to provide a walk-through of my short 35 minute presentation at the Augmented Reality Event in California last week. The intention of the presentation was to take my AR Scenario & Business Model thinking to the next level, to go beyond marketing eye candy, clunky ‘questionable’ games and really dig down and think hard about the value proposition for users. In creating the presentation I had to look at a deeper level at the nature of experience, as in that we can start to really find true value in Augmenting our Reality. To begin though a little compilation video I threw together for this post and some future talks looking specifically at a range of locative augmented and alternate reality services (entertainment, promotion and advertorial) to set the landscape.

Music track is called Zemith from my ‘Calm After the Storm’ album in progress – subscribe free

The only way the Augmented Reality industry is going to emerge from its current commercial birthing period is for the brands, corporates & creatives to make sure that AR is delivering a unique, immersive experience and to start to consider the value of experiential (a marketing definition here). This nature of experience, which I believe is inextricably linked to the future of AR, and the value users place on immersive services also leads at the end into a ‘experiential’ panel I am leading at Creative Sydney at the Opera House this week and I cover some of my thoughts in that space first.

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Mar 122009
 

Dying? More in the middle of this post – Thought I would share my lil’ introduction slides from ad:tech 2009 earlier this week. It is such a short time (each panel is given 50 minutes) to cover such a vast area and myself, Jeff (habbo.com.au) and Mitch (SmallWorlds.com) were all struggling to impart tons of great info/examples and have enough time to get interactive. I hogged the first 15 minutes by giving a broad overview and some examples I have been involved in that fitted the brief of the talk.

Below are my slides,  a little descriptive text below that and at the bottom of this post some deeper insight into SmallWorlds (given most of my readers probably know Habbo already? – If not, Why Not!? ). I included one slide from Jeff Brookes set looking at Hitwise’s stats on browser worlds and other sites in terms of session length which will raise a few eyebrows!

Virtual Worlds & Business: What’s The ROI?

Virtual worlds are maturing at a rapid rate and brands are realising there are valuable business opportunities within them. Whether the objective is engagement, research or brand presence, virtual worlds are proving to be a legitimate marketing channel. In this session our panel will look to provide insights into the business benefits of working within a virtual world.

Presenters

  • Gary Hayes, Director, Laboratory for Advanced Media Production, AFTRS & CEO MUVEDesign (Australia’s leading SL developer!)
  • Jeff Brookes, Regional Director – Asia Pacific, Sulake Corporation (habbo.com.au)
  • Mitch Olson, Co-Founder, SmallWorlds.com

There were several important messages in my introduction. Firstly making sure we all understand the different platforms social virtual worlds are operating on so I briefly described

  1. Layered or Parallel worlds – cute 2D type avatars that move over the top of 2D web
  2. Browser Worlds – walled garden that run inside web browsers, often as isometric views as flash or shockwave
  3. Client Worlds – anything from 20MB to 3GB downloads of data and the world is obviously much richer than browser worlds but do need higher spec computers
  4. Console Worlds – a relatively new kid on the block, social spaces that exist on games consoles. All the rendering grunt is there and the avatars are often linked to the PS3, Wii or XBox360 real life account. PS3 Home is the easiest way to match to worlds like Habbo or There.com
  5. Note there are hybrids of the above and  I would put ExitReality down as a hybrid of 1 and 3 as it turns a web page into a client style world

Here are the images of the above part of the presentation

worlds_platforms

I decided that a good ‘spine’ to hang the introduction on was the sort of negative questions floating around from those who don’t really understand what’s happening with web 3.0, the live virtual world space. This includes the paranoid printed press, a few out-of-touch businesses, and digital media companies/consultants more interested in iPhone/mobile games or Facebook widgets which is something they can truly explain (read: make money off).

Press hyperbole or myths?

  • Virtual Worlds are on the decline?
  • There’s no one in them?
  • & people don’t spend long there?
  • They are for kids or social ‘games’ not business?
  • There are no marketing models?

But I then addressed each question in turn showing real world stats and examples which turned all of these on their heads. Obviously in recession investment in new tech/services are going to be hit and recent reports do suggest a minor consolidation of investment into kids worlds, hinting at a lowering of VC in the ones I highlighted in my presentation, but this whole area is still something education & business are advised to R&D and understand fully – as a minimum. As we know it will be new ways of doing business, more immersive and efficient ways to collaborate and alternate forms of entertainment that will be partly what will bring us out of recession. Some reports even say that investment is high regardless (hat tip Mitch)

For Virtual Startups, There Are VC Funds Aplenty

If there is an economic crisis, then it isn’t impacting any of the startups making virtual goods, online games or virtual worlds. In just the last month alone, three companies have raised mega-millions from venture capitalists.

  • Greystripe, a games-related advertising network, raised another $5.5 million in funding, bringing its total to $15.6 million. We have covered them in the past.
  • SuperSecret, a San Francisco-based online social gaming company, raised $10 million in Series A funding led by Opus Capital. They are targeting the tween market and hoping kids graduate from Club Penguin or Webkinz to their offering.
  • Offerpal, a startup that links virtual currency to real-world marketing deals, raised a whopping $15 million in funding late last month from D.E. Shaw Ventures and others.

The investor interest in these startups mirrors the growing popularity of social games and virtual worlds, especially among younger web users.

I finished the talk with a quick overview of the main models that virtual worlds (and most online games) can be monetized. Items 1, 3 and 4 were picked up in a talk on the 2nd day of ad:tech looking at how Nike engaged with console ingame campaign experts Massive across a few platforms.

  1. Static Advertising
  2. Promotions & Sponsored events
  3. Virtual Goods & Product Placement
  4. Dynamic InWorld Advertising
  5. Branded Spaces
  6. AdverWorlds & AdverGames

After my talk some great examples from Jeff Brookes from Habbo followed by Mitch from Smallworlds. I am always fascinated by the methods Habbo engages with its loyal and large community and was equally fascinated by Small worlds thinking too and how they are ‘integrating’ themselves with the existing 2D social networked web. This video by the infamous Robert Scoble features Mitch Olsen and Ted of SmallWorlds

They talk about the main traditional world features but then go onto the interesting areas of embeddable worlds (the Google Lively Killer app – not exploited), API integration with almost anything (twitter feeds, YouTube vids, FB updates on walls anyone) and the most interesting ‘missions’. You are encouraged to explore, meet folk, shop and basically get involved – Mitch says this is like the LinkedIn profile thinking, until your profile is 100% filled in you feel like you are missing out. I likened it much more like World of Warcraft, set players tasks, set them group tasks, give them rewards. This to me could be SmallWorlds real killer applet. At the moment they have around 400 000 users and that looks set to take off in the next months.

Tony Fendall blogged about a particularly cute feature that allows (his words) –

One important thing which was missed is that they didn’t have time to talk about all the cool micropayment features (which Ted alludes near the end) such as Gambit, OfferPal and Zong. Gambit and OfferPal are both services which allow users to earn SmallWorlds currency by completing tasks. These tasks include things such as answering surveys and give amounts of currency proportional to the amount of effort put in. This is a great way for players (who may not have a credit card) to still be able to earn a premium SmallWorlds experience. Zong is a simple cell phone payment service, where by users can pay for a premium SmallWorlds experience using their mobile phone. For an excellent look at how we have integrated Zong into SmallWorlds, check out this YouTube video created by the developers at Zong: