MARKETING BEYOND ONLINE…

VIRTUAL WORLD OPPORTUNITIES!

Prepared for the Fashion Group International–Houston

Kay E. Strong, Ph.D.

kestrong@uh.edu

University of Houston / futures program

30 Sep 09

VIRTUAL WORLDS (VW)

“..virtual worlds aren't the ugly sister of social networks, but really Cinderella in disguise”

--Michael J. Griffin, Creative Director, Leap In Entertainment

“virtual worlds present a new type of marketing opportunity”

--KZERO: Resident experts in virtual worlds

WHO & WHY

“…interactive leaders like Coke, Motorola, Wells

Fargo & Co, Disney, and Hollywood film studios

are experimenting with the next dimension of

online-- virtual worlds.”

“Their missions vary-- to seek new life for

wavering brands, to expand civilizations

(audiences) or even make "first contact."

http://www.imediaconnection.com/content/8605.asp

VIRTUAL ECONOMY

An analyst referenced in the Wall Street

Journal predicts that "non-subscription

revenue" from the volume of real-money

trade of virtual items (RMT) market will reach

$5 billion by the same year 2011

Source: http://virtualeconomy.org/comment/reply/100/9314

Linden Lab, the creators of VW Second Life report Sep09:

The in-world economy grew 94 percent year-over-year from Q2 2008 to Q2 2009.

At nearly USD$50 million each month in user-to-user transactions, the Second Life economy is on an annual run rate of more than a half billion US dollars.

Source: http://www.virtualworldsnews.com/2009/09/linden-lab-release-second-life-stats-onslaught.html#more

DIGITAL CONSUMERS SPEND OVER $1.5 BILLION ON VIRTUAL ITEMS EACH YEAR…

…these virtual objects are nothing more than a series of pixels!

VW PRODUCTS (1) Virtual products created purely for in-world

consumption

(2) Real world products marketed in-world for virtual consumption but sold for platform currency

(3) Virtual in-world items traded out-of-world using real world cash, then brought back in- world.

IN-WORLD PRODUCTS

Virtual Services include camping, wage

labor, business management, entertainment

and custom content creation.

Virtual Goods include buildings, vehicles,

devices of all kinds, animations, clothing,

skin, hair, jewelry, flora and fauna, and works

of art.

VIRTUAL GIFTS

"And now Facebook, MySpace, and Bebo are all

getting into virtual gifts - a pretty strong vote

of confidence that the market is out there in

North America, and not just with teens.”

--Michael J. Griffin, Creative Director, Leap

In Entertainment.

WHY?

“My theory is that people buy digital goods for the

same reason that they buy goods in the real world;

(i) to be able to do more,

(ii) to build relationships, and

(iii) to establish identity.”

Source: Viral Blog: http://www.viralblog.com/research/why-digital-consumers-buy-virtual-goods/

DOING MORE

The simplest way to use digital goods is to

buy greater functionality. Just as I might buy

special tires for my car so that I can corner

better, so I might buy special virtual tires for

my virtual car so that it too can corner better.

BUILDING RELATIONSHIPS

…the price of the bouquet (I give) is as important

as how pretty are the flowers. It is a measure of

the depth of my feeling.

Virtual gifts work the same way. The gift giver,

the recipient, and all the visitors to his/her profile

page know that virtual gifts cost real money. That

fact alone distinguishes the birthday wishes of

the gift giver from the rest. Again, it isn’t just the

thought that counts.

ESTABLISHING IDENTITY

Users can go to great lengths to customize

their appearance to suit their preferences. This

self expression shows other users what they

think is cool, and hence highlights the users’

tastes.

NOTE: IMVU (source) has the world’s largest catalog of virtual goods with over 3 million items, produced by over 100,000 content creators. It currently generates approximately $1 million in revenue per month, 90% of which comes directly from in-game consumers.

CONSUMER PROFILE

Survey – 46% Virtual World Fans Buy Most

LARGEST DEMOGRAPHIC OF CONSUMERS WHO HAVE REPORTED BUYING VIRTUAL GOODS:

17% of Females ages 25 to 34

15% of Males 12 to 17 & 18 to 24

15% of Females 12 to 17

15% of Females ages 35 to 44

Source: Virtual Currency Report 31 July 09

ETHNIC BREAKDOWN OF VIRTUAL GOODS PURCHASERS:

16% of Asian Americans

14% of Latinos

12% of Caucasians

10% of African Americans

Source: Virtual Currency Report 31 July 09

VIRTUAL WORLD MARKETING SPECIALISTS

http://viximo.com/

http://www.roiworld.com/

http://riversrunred.com/immersive-brandspaces/about/

http://kzero.co.uk

Source: http://images.businessweek.com/ss/06/04/avatar/index_01.htm

VIRTUAL WORLDS …

Marketing beyond online!

SHOPPING EXPERIENCE SECOND LIFE

http://secondlife.com/shop/