Jan 072009


Reflections by me? Been a bit slow off the mark blog wise this year as endless layers of projects overlap and blogging has fallen off the list. But there are some goodies about to be blogged here, just simmering, almost ready for serving. Smell that goodness.

For the moment though two of my ‘thinks’ that others published for me. The first from Bettina TIzzy’s great (‘What the World Needs Now is‘) Not Possible in Real Life (NPIRL) blog who posted a selection of my slightly half-baked thoughts re: virtual worlds. Following that, also featuring SL & Telstra, a rather positive retrospective from ITWire extensively quoting me, about how companies can engage properly, The Pond is a build I created back in early 2007.

OK to the post. I know, a lazy re-posting but there are a few nuggets in here…over to NPIRL.

Gary Hazlitt turns the page on 2008 – What happened and what’s coming in virtual worlds

Sydney-based Brit and marketing wiz, musician, composer and rich content creator in virtual worlds Gary Hazlitt (aka Gary Hayes), is already done celebrating the incoming year, while we wait for a few more hours in the Western Hemisphere for 2009 to arrive.

Gary, who studied physics, is the director of the Australian Laboratory for Advanced Media Production (LAMP), and also heads up Virtual Worlds for the UK-based The Project Factory, for which he produced the highly successful and eminently revistable (as the traffic numbers indicate) Australian Telstra and ABC Second Life presences.

I welcome Gary’s guest blogpost and knowledgeable take on the recent past and the coming adventures of virtual worlds. Happy New Year, everyone! – Bettina Tizzy

In the social Virtual Worlds context, 2006 was about hype… another new frontier ‘kid-on-the-block,’ but became about fast bucks and cheap and cheerful PR. We saw that bubble gently burst in 2007 as the realisation that one world in particular, Second Life – (which is still the leading example of culturally created virtual content), was really about creative communication and artistic expression versus the local shopping mall or a crude business tool.

Last year, 2008, we witnessed a distillation in what Second Life (and by implication other customisable worlds) is really about, leading to a proliferation of new, niche virtual worlds meeting the cultural and entertainment needs of much broader demographics. We effectively saw the ‘fat’ surgically removed from Second Life and an acceptance that this new medium and form is still in its very early days, but in 2008 there are clearer reasons for being a part of the social web mix:

1. An immersive expression of community – Facebook and MySpace-meets-World of Warcraft. This community can create their own environments or swarm around trusted film, TV or lifestyle brands, too.

2. For business, it is more about a place to meet, present and recruit and far less about brand awareness, product sales or vacuous hype. The business model in 2008 clearly came into focus: the community selling to itself – brands needed to court existing inhabitants very carefully.

3. For education, Second Life is one of the most efficient tools in the learning process. Education becomes democratised, everyone can contribute and learn equally, remote learning is far more compelling, fun and immersive.

4 A creative tool. Second Life, in particular, showed significant maturity as we saw a higher number of serious live performance (CARP Cybernetic Art Research Project, NMC, DanCoyote Antonelli, for example), a record number of in-world ‘machinima & TV-like programs’ and by far the largest array of creative statements from virtual environment artists, many members of the NPIRL group. The quality of ‘experience’ creation from talented musicians, designers, photographers, artists, etc., reached new heights.


Investment across the board – more than $900 million US invested since Oct 2007 – has moved away from generalist worlds like Second Life to more focused niche or user base environments with many starting to exhibit core game elements. These include those with renewed investment after new’ish launches: vSide, Football Superstars, Stardoll, Home, IMVU, Metaplace, Multiverse Places, and Music Mogul.

Towards the end of the year, console social worlds came onto the scene. XBox360 and Wii are very similar in ‘cartoon’ aesthetic, whereas Sony is far more game focused. All have very similar business models – create a space to hang out and be ‘tempted’ by games/film/merchandise. Although these are not yet places for community creation, they will soon learn that to keep inhabitants they will need to be or, like Google Lively, have to pull the plug. Embeddable or layered worlds began in 2008 and are likely to be significant in getting people used to real time communication through ‘representational’ avatars – vs text based ‘social network’ profiles. Also, Facebook worlds like YoVille or Vivaty, or layered worlds like Rocketon or Weblin that are embedded on the existing 2D web. The dominance of the likes of Club Penguin and Webkinz at the tweens end of the spectrum will be duplicated through teens and gen y’s as a series of new, highly focused and targeted social worlds launch next year. This has already begun with Football Superstars and Music Mogul but expect to see many more – including several with user created content as a feature alongside the virtual economy.


– Graphics in Second Life become teenagers. Still some way from the likes of Crysis, Second Life Windlight turned the world into something far more fantastical for many. It added layers of light, glow and control to a previously very ‘flatly lit’ world. We still wait for dynamic shadows, better environmental sound and an even more useful scripting language (post Mono), but this was a paradigm shift for environmental artists.

– Some companies got it! There was not a plethora of companies or brands entering Second Life but those that did had continued success as they concentrated on the social (people) rather than ‘product’ aspects of their business. Although the Pond leads in dwell terms, new entrants like Warner’s Gossip Girl have done exceedingly well. Car companies still do well even though Pontiac walked away from Second Life, and Toyota, Fiat and Nissan are always in the top 10 brands.

– The quality of machinima across all social and game worlds increased exponentially this year and a growth in communities watching ‘documents’ of the worlds they spend most of their time in. In addition to some machinima appearing in heritage media (“Molotov Alva and his Search for the Creator” and HBO/Cinemax, for example) there has been a growth in long form game-engine films and notably many more serious issues tackled.

– The New Worlds. A fracturing, as it became obvious that Second Life cannot be all things to all avatars – so nearly 70 other worlds all showed up on the radar. Many are focusing on niche interest or are highly branded. Several of the new ‘jack-of-all-trades’ entrants will learn that enabling community creativity and an economy is absolutely necessary. There were several walled garden/locked content mirror worlds and builds in 2008, which will learn to be not about ‘broadcast’ spaces, and realise that their worlds are far more significant than modelling what is around us – “In augmented and online virtual worlds, humanity will exponentially evolve, free from the limiting ghosts of that other virtual world we called reality”.

The second item appeared following my presentation at the Online Distribution and Business Collaboration conference from November 2008 in which I hurriedly went through some good inworld and game marketing case studies. Kathryn Small here picked up on why Australia’s BigPond is working really well – and no, it is not all about the broadband capping situation in Australia. Most of the regular inhabitants are on other ISP’s – anyway the article covers my thoughts on this and I have a much longer analysis with stats for the nearly 2 years it has been active, in the pipeline. (Also worth mentioning something about the item at the start of this one – Tourism Victoria didn’t withdraw its funding, Multimedia Victoria requested I take down a temporary ‘trial’ build of Melbourne Laneways – which had an original 3 month ‘learn as we go’ tenure on ABC Island. Otherwise a good item below.

Despite reports, Telstra and Second Life remain inseparable
By Kathryn Small 28 November 2008 02:20PM

It’s a match made in heaven: Telstra is Australia’s biggest telco and ISP, while Second Life is one of the world’s hottest social networking tools. So when the media reported that “the game was almost over” for Second Life, Telstra was quick to defend its investment.

Recently, Tourism Victoria withdrew its advertising funding from Second Life’s ABC Island. This prompted Deacons technology and media partner Nick Abrahams to comment to The Australian that “the drop in commercial interest in Second Life had been noticeable over the past nine months”.

Abrahams said that at any given time, fewer than a couple of hundred Australians might be in Second Life.

But virtual worlds expert Gary Hayes said that virtual world ratings should be measured in engagement and user hours, not just hits.

“Immersive online experiences need new metrics, and marketeers and academics are realising that social worlds do provide the potential for very high dwell figures,” said Hayes.

“Facebook has 65 million users on for just four hours per month. 132 Americans watch YouTube but they watch only about five minutes per day or 2.5 hours per month,” said Hayes.

“Second Life (and other social virtual worlds) has the highest rates of loyalty and stickiness of any social network generation, more than 50 hours per month per user.”

Hayes said that Telstra’s islands, known as The Pond, had a steady stream of around 50-100 users at any given time.

Telstra spokesperson Peter Habib quoted figures compiled by The Project Factory which said that BigPond’s islands were the most popular in Second Life.

The Ponds were founded in March 2007 with 11 islands (now 16) which have hosted virtual concerts, ANZAC Day commemorations and even New Year and Australia Day events.

BigPond recently hosted an AUSTAFE event which involved live streaming of the event from Adelaide into Second Life.

The Ponds also contains five residential islands for users to build themselves virtual real estate to live in, at near 100 per cent occupancy.

Telstra spokesperson Peter Habib told iTnews, “BigPond’s commitment to innovation, interactivity and entertainment in Second Life is a key part of our success.”

Habib said that BigPond has opened a virtual in-world service kiosk that allows Second Life users to interact with BigPond customer service staff in a virtual way.

Hayes said that The Pond’s approach to customers differentiated it from many other brands.

“The real success of The Pond is more about the regular events, the creativity of the builders who often come from the community, elements of nationalism, and many of the organic spaces that promote stickiness by their ‘ambience’ rather than superficial interactivity. This has been a real differentiator.”

Habib dismissed the concerns of other providers with success on Second Life.

“While other companies may not share BigPond’s successes, we are more than pleased with the popularity of our Second Life islands”

Hayes said that companies might not succeed in Second Life for two reasons. First, that many brands were brought into Second Life for the wrong reasons, and with misunderstandings about the social network. “You cannot build into a social network and not be social,” said Hayes. “Early entrants simply did not act human; they acted like a corporation, and built clones of the real world, and didn’t think experientally.”

Second, Hayes said that companies needed to change their offering to virtual customers.

“We are seeing the natural exodus of ‘showroom, build-it-big-and-boring’ brands and the settling of second generation ‘social’ and ‘purposeful’  brands. So The Pond, Accenture, Playboy, The L Word, and about five other key brands are really getting to grips with setting up a virtual base in a social world.”

John Brand, research director at Hydrasight, agreed.

“Only organisations who want to be perceived as ‘bleeding edge’ should ever have been involved in Second Life in the first place,” said Brand.

“Now that Second Life is entering its relative teenage years (measured in Internet years at least), the early adopter bandwagon has well and truly been jumped on.”

But Brand (edit: Hayes) noted that Second Life is not the only virtual world.

“There are at least 50 other mainstream entities and the total audience (according to a trusted site on this topic, KZero) is well over 300 million. In the second quarter of 2008, $161 million was invested in 14 virtual worlds, in the first quarter $184 million put into 23 virtual worlds, so the total this year alone is $345 million across 37 new worlds.

“Australia is a tiny market compared with Europe, Asia, South America and the USA, so fluctuations are highly likely. The fact that the user base of one virtual world fell by 23 per cent in a year is common with any service coming out of a hype phase into a stable mature phase.”

Jul 172008

I am presenting at this years Advertising and Marketing Summit alongside a nice array of fellow ‘bubbled’ keynoters who are tackling a bewildering range of topics, bulleted below that make lovely Google search strings!:

  • Unleashing the power of brand experience
  • The Consumer is King – forecasts and trends of tomorrow’s consumer
  • Creativity techniques to become an idea generating machine
  • Advertising in new worlds
  • Brand study
  • What marketers want and how they want it
  • The Digital Leaders forum
  • You media – monetising social media
  • The future wasn’t what it used to be – creativity that engages
  • Integrate to engage
  • Word Up – Getting WOM in the mix
  • The broadcaster’s insight
  • Partnerships for success Developing agency client relationships that last
  • The mobile marketing advantage
  • Y speaks – Y we participate
  • The Mobile Marketing Advantage
  • Continual brand repositioning
  • Where can sport sponsorship take a brand
  • The power of emotional branding
  • Brand Relevance
  • 3 mega trends which are redefining consumer engagement models
  • Innovation in the Digital Marketplace
  • The view from the boardroom – the role of branding and advertising to the CEO
  • The broadcaster’s insight – the future of television advertising
  • Experience the message – Profiling experiential marketing
  • The Power of Experience – A high impact marketing programme through a non traditional approach
  • Integrating Optus: Challenge – Solution – Results
  • Revitalising an Aussie favourite – by an American
  • Lovemarks – giving your brand the kiss of life
  • Transitioning your brand into a virtual World
  • New Business Models for a Digital World
  • A Decade of Delivery and beyond
  • Original Content equals engaged consumer
  • Leadership in the digital media
  • The Mitchell Prediction – the media landscape 2008 and beyond
  • Engage don’t enrage

My part of the mix is in the closing stages alongside a Word of Mouth session and it will be fun looking at the near term opportunities now Google Lively has joined the mix alongside a tremendous amount of investment ($345 mill this year already) in new ‘youth’ social virtual worlds. We also have fresh funding being kicked into existing worlds such as Sony and Time Warner’s Gaia Online, and both are very likely going to really kick start a sudden growth in casual world populations of what are becoming known as Generation V (virtual). I will be posting shortly about the sudden growth in Parallel Virtual Worlds, avatars layered over the top of traditional 2D web browsers – stay tuned! My bit of the programme…

14.10 Marketing Opportunities in Social Virtual Worlds 387a6be2bfae954a84e5bc9db296a983 Gary Hayes :: Head of Virtual World Development :: The Project Factory 14.35 WOM Interactive Session 940515f53a10bb6d5b02ddcdaeddd274 Piers Hogarth-Scott :: CEO :: Yooster & Trustee :: VBMA

Full list of speakers here:

International Keynote Speakers:

* Mark D’Arcy :: Chief Creative Officer :: Time Warner Global Media Group (USA) * Steve Simpson :: Chief Creative Director & Partner :: Goodby Silverstein & Partners (USA) * Ian Stewart :: Senior Vice President :: MTV (Asia)

Keynote speakers:

* Harold Mitchell AO :: Chairman :: Mitchell & Partners * Siimon Reynolds :: Co-Founder :: The Photon Group * Karim Temsamani :: General Manager :: Google * Jack Matthews :: CEO :: Fairfax Digital * Rohan Lund :: CEO :: Yahoo 7 * Richard Freudenstein :: CEO :: News Digital Media

* Mike Morrison * Amanda Howard :: Marketing Director for Beverages :: Pepsi * Bill Obermeier, MD Brand Advertising & Sponsorship, Telstra * Graham Christie, Consumer Marketing Manager, Vodafone * Jon Bradshaw, Director of Marketing, Virgin Mobile * Letitia Hayes, Experiential Marketing Manager, Sony * Gary Hayes, Head of Virtual Worlds, Project Factory * David Whittle, Managing Director, Mark * Rob Belgiovane, Executive Creative Director, BWM * Piers Hogarth-Scott, CEO, Yooster * John Du Vernet, Head of Special Projects, Naked * Lyndall (25 y/o)::John Paul (20 y/o):: Michael (20 / y/o):: Janine (20 y/o) * David May :: Director of Marketing :: Jetstar * Ben Wicks :: Group Marketing Manager :: Fosters Group * Bill Curtis :: Managing Director :: CJB :: & Director :: IAA Australia * Heather Leembruggen :: President IAA Australia Chapter :: International Advertising Association * Joan Warner :: CEO :: Commercial Radio Australia

Jun 232008

For those folk who fancy a trip down to Monash University Law Chambers on Wednesday 25 June and who want to see where ‘Underbelly’ meets Social Virtual Worlds and Online Games well we have just the seminar for you. My opening talk’s title “The Sex, the Violence and the Dirty Money: The Truth about Social Virtual Worlds” constructed several months ago now seems a little OTT, wonders how he will live up to the promise…oh yes just cite every mainstream ‘heritage media’ article about the evils of online games and social virtual worlds and voila. Of course I will be talking about some of the benefits too. I might also use this lovely video I picked up from a side exhibition in Seoul last week from APEC Education Foundation Series which points out the evils of the internet (sorry, safe use of) – this particular one entitled ‘Copyright Infringement’ is ‘so swank’…btw I will be putting up my Seoul talk at the trilateral Broadband Summit in a day or so.

Seminar (PDF available from here)
Wednesday 25 June 2008, 4 – 6.30 pm
Monash Centre for Regulatory Studies, Monash University Law Chambers
472 Bourke Street Melbourne
Key Speakers
Gary Hayes, Director LAMP @ AFTRS and Head of Virtual World Development, TPF
Dan Hunter, New York Law School, Melbourne University Law
Melissa deZwart, Senior Lecturer, Monash Law
David Lindsay, Senior Lecturer, Monash Law

Businesses, and communities of users are increasingly operating in virtual worlds, such as Second Life. But doing business in virtual worlds raises many complex, novel legal issues. Already, potentially landmark cases have come before US courts. This seminar features well-known experts and legal academics in this rapidly-emerging area. It will be an indispensable introduction to virtual worlds, as well as an overview and analysis of significant legal issues.

4 pm Welcome
4.10 pm The Sex, the Violence and the Dirty Money: The Truth about Social Virtual Worlds
Gary Hayes
4.40 pm Property, Intellectual Property and Virtual Worlds: What Do Virtual Worlds Tell Us About Property?
Dan Hunter
5.10 pm Beyond the Terms of Service: Legal Issues in Regulating Virtual Worlds
Melissa deZwart
5.40 pm Copyright Protection of Buildings and Artistic Works in Virtual Worlds: Comparative Legal Analysis
David Lindsay
6.10 pm Questions & Discussion
6.30 pm Refreshments

Speaker profiles
Gary Hayes is the Director of the Australian Laboratory for Advanced Media Production
(LAMP), which is run through the Australian Film, TV and Radio School (AFTRS), based in Sydney. LAMP is rapidly emerging as Australia’s preeminent media R&D and production lab. Through AFTRS, he runs workshops in multi-user virtual environments (MUVE), exploring the potential of shared social online virtual spaces for collaborative production, creativity and education. Gary is also Head of Virtual Worlds with the UK-based Project Factory. In this capacity, he has produced and built both the Telstra and ABC Second Life presences, and is currently building and devising other commercial and game-like services for virtual worlds. From 1995-2004, as a Senior Producer and Development Manager for the BBC in London, Gary led the BBC’s development of the internet, interactive TV and emerging platforms. As a published music producer, composer and performer, he has had over 200 works performed live and on TV, film and radio. Gary has been an International Interactive Emmy juror for the past two years.

Dan Hunter is an expert in cyberspace and internet law, and artificial intelligence and cognitive science models of law. He holds a chair in law at the University of Melbourne, and will join the New York Law School faculty permanently in mid-2008. Dan regularly publishes on issues dealing with the intersection of computers and the law, including papers dealing with the regulation of virtual worlds and high technology aspects of intellectual property. He was one of the first scholars to examine the social significance of virtual worlds, co-founded the scholarly blog Terra Nova (terranova.blogs.com), and ran the 2006 State of Play/Terra Nova Conference at New York Law School, and the 2007 State of Play Conference in Singapore. Dan holds a PhD from the University of Cambridge on the nature of legal reasoning. He was a tenured faculty member at the Wharton School, University of Pennsylvania, from 2000-2007, where he continues to teach as an adjunct faculty member. Prior to joining Wharton he taught on the law faculty at Cambridge University in

Melissa deZwart is a Senior Lecturer and Director of Teaching in the Faculty of Law at Monash University, where she teaches Cyberlaw, Law of the Internet, Intellectual Property and the Internet, and Introduction to Legal Reasoning. Melissa is an expert in cyberlaw, e-commerce law, information technology law, technology contracts and copyright law, and is widely published in these areas. She is the co-ordinator of a Monash Arts/Law grant researching the law and regulation of virtual worlds, and has been instrumental in establishing the Monash presence in Second Life. In 2008, Melissa will introduce the graduate subject, Law of Virtual Worlds. Melissa has a PhD from Monash on the intersection of copyright and contract in the digital environment. Prior to joining the law faculty, she was the Legal Manager at CSIRO.

David Lindsay is a Senior Lecturer in the Faculty of Law at Monash University teaching Intellectual Property Law, Copyright, Law of the Internet, Communications Law & Regulation and Trusts. He is the author of many articles and reports in the areas of intellectual property law, internet law, communications law and privacy law, and a wellknown speaker on these areas. David is a contributing author for Copyright and Designs (Butterworths, Sydney, 1996-) and the author of International Domain Name Law: ICANN and the UDRP (Hart Publishing, Oxford, 2007).

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 there.com, Kaneva and many new kids growing up on the block such as multiverse, croquet or outback online. MTV Networks used the there.com 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

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