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Marketing in a Virtual World

Marketing in a Virtual World

The streets are paved with gold for marketers brave enough to step into the new virtual world. Web 2.0 has arrived, and its leaders are three-dimensional social networking sites, where visitors create avatars that make friends, build homes, earn and spend virtual currency, and craft just about anything they can imagine out of thin air.

A pioneer in this terrain, American Apparel was among the first companies to market its brand in Second Life, one of the most well-known virtual worlds on the Internet. American Apparel Web director Raz Schionning, a Second Life resident, says Second Life served as an economical alternative to product placement in video games and gave the company a chance to test the waters of digital media.

Now, visitors to the site can teleport their avatars (a user’s online persona) to a large glass-enclosed American Apparel store with racks of colorful T-shirts, dresses and pants. The experience just outside the store is even lovelier with beautiful waterfalls that cascade into a pool with boulders and red and yellow wild flowers. It feels almost real.

Although the virtual store remains virtually empty because American Apparel has not maintained the property, Schionning says it was a great learning experience that at the very least garnered attention. “When you’re the first one in, you bear the burden of being able to screw up,” he says. “I don’t think we screwed up, but we certainly could have done things better.”

Indeed, Schionning will know better next time -- and so can you. Here are 10 tips on how to effectively market in the new frontier:

1. Get a Life -- in the Virtual World

You wouldn’t jump into a new market without getting to know it first, so start surfing these three-dimensional Web sites. “It’s almost as if you’re going to a foreign country,” says Alyssa LaRoche, president of Aimee Weber Studio, which builds areas in the virtual world for various companies. “You want to know the exchange rate and the culture.”

Roaming virtual worlds requires some practice with all the teleporting and flying you’ll have to do. Of course, you’ll want to speak with the natives you encounter by chatting (err, typing). It’s the cheapest business trip you’ll ever take -- and you’ll be home by dinner.

2. Choose Your Home Carefully

There are numerous virtual worlds to discover, each with its own culture, demographic and purpose. There.com tends to skew younger than Second Life. MTV, with the help of Makena Technologies, creators of There.com, built its own galaxy with Virtual Hills and Laguna Beach, which attract fans of the reality shows of the same names. And the list is expected to continue to grow.

You can keep track of these worlds by reading blogs or watching YouTube videos. Still, the only way you will be able to inform your clients about which to call home is to travel the virtual world yourself.

3. Be Willing to Experiment.

What others can take away from American Apparel’s experience is that dipping your toes before diving gives you the chance to reflect, make informed decisions and stay abreast of trends. Nike and Levis, for example, began their lives in the virtual world with branded clothing for avatars on There.com. For now, one small step into the third dimension is one giant leap in the world of marketing.

4. Remember the Purpose of Virtual Worlds

These sites popped up to help people get to know others without leaving home. “The opportunity virtual worlds offer is the ability to put together groups of evangelical fans who can interact and do interesting things around your company,” says Reuben Steiger, CEO of Millions of Us, a consulting company based in Sausalito, California, that helps clients gain leverage in the virtual world. That means any marketing efforts you try should somehow foster community. Experts agree that the biggest mistake first timers make is building opulent palaces that turn into Boringville when avatars arrive and find nothing to do but contemplate their virtual navels.

5. Ask What You Can Do for Your Avatar

Diageo, for example, offers free virtual bar kits to Second Life bar owners, which include brands such as Johnnie Walker, that give imbibing avatars the ability to toast with others or become animated. In a world where you can fly, a car is a fashion accessory, says Steiger, and considering how avatars can use your products should shape your strategy.

6. Keep It Real

Ideal plans include having a virtual world presence that translates into real-world dollars. Dell, for one, lets Second Life residents build their dream computer, which they can then purchase and have delivered to their real home from the company’s traditional Web site. Coldwell Banker will give residents a house in Second Life if they agree to meet with an agent about their real-world housing situation.

7. Take Advantage of Market Research Opportunities

“The virtual world is a phenomenal place to market, because you get to interact with consumers in a way that doesn’t happen in the real world,” says Glenn Fisher, director of marketing programs for Linden Lab, makers of Second Life. That’s why so many companies are using this new space to test ideas and keep track of avatar use of their products. For instance, Pepsi has a large presence in MTV’s virtual realm and can keep track of the number of avatars engaging with its products, says Betsy Book, director of product management for Makena Technologies. Think of the virtual world as one big focus group.

8. Be Open to User Input

Lend the people your ears and respond to what they say. “To be successful, you have to be comfortable with sacrificing a little bit of control,” says Steiger. “That’s very frightening for marketers, but it’s the future.” Even in the new world, the customer is always right.

9. Predict the Future -- or at Least Try To

One of the problems some of the pioneers are facing is that they built a store in a virtual world and now they’re lost as to how to make the space continuously compelling. If you build a store, think ahead and plan to restock it every so often and keep a virtual employee on call for customer service, says Steve Nelson, executive vice president of Clear Ink, a digital marketing company in Berkeley, California.

In addition, you should try and anticipate the future of virtual worlds in general. Voice capabilities are already on the horizon. Sibley Verbeck, CEO of the Electric Sheep Company, which designs add-on software for virtual worlds from New York, says in five years, most online shopping (for actual products that arrive at your real home) will take place in the virtual world, where you can see three-dimensional replicas of products. Most agree that the future of the Web is arriving now -- and ignoring it would be bad business.

10. There Are No Rules

They haven’t been written yet, and the possibilities are endless.

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