Since American Apparel made a big media splash selling virtual clothes in Second Life nearly a year ago, a number of marketers have followed. But for every Pontiac that's created a thriving community or Coldwell Banker that's found qualified job applicants, there's a company collecting more virtual cobwebs than eyeballs. According to virtual-world experts who wish to remain anonymous, SonyBMG, Adidas and Reebok are among the pioneers inhabiting ghost towns. Their islands and stores are stocked, but very few of Second Life's roughly 30,000 daily visitors (a total of 6.5 million are registered) have stopped by.
Joseph Jaffe, president-chief interrupter of Crayon, the firm leading Coke into Second Life, said the soda giant has already learned from its predecessors. "Instead of big splash followed by fizzle, we plan to start small and build momentum," he said. "We just decided to join a conversation already in process."
Coke's first official entry in to Second Life comes after avatars have already littered their virtual lives with Coca-Cola signage, vending machines and other Coke-branded paraphernalia. To quietly build on that, Coke skipped buying its own island and instead rented a floating pavilion above Mr. Jaffe's Crayonville. The pavilion has become a weekly party spot and the center of Coke's vending-machine-design contest.
The contest not only gives the brand presence but also solves one of those virtual-world dilemmas -- how to market a product that's basically useless.
"Obviously an avatar cannot really satiate its thirst literally, but there is a kind of figurative opportunity here," Mr. Jaffe said. "What would a Coke vending machine look like in a virtual world? Why would it have to dispense cans? Why couldn't it dispense the 'Coke side of life' or knowledge or some kind of shared experience?"
"At the end of the day, it's all about us learning to be better marketers in new environments," said Coke Director-Global Interactive Marketing Michael Donnelly. "In this case, it's a virtual environment."
Not the only one
Coke's not the only one confronting unreal-world challenges in Second Life. Pontiac Marketing Director Mark-Hans Richer sums up his brand's problem quite neatly: "In this environment, you've eliminated all physical needs. ... Why do I need a car when I can fly?" Still, the marketer has a presence. It's Motorati Island is dedicated to car enthusiasts and car culture. Besides the Pontiac store and racetrack, the auto company gives away land to other car-culture-type venues.
And it's perhaps the latter tactic -- getting involved with an actual community -- that's netted Pontiac the highest "Dwell" quotient in Second Life, according to data that examines the number of visitors to a brand-based locale and the amount of time the visitors spend at the enterprise over a period of time.
The quickest way to become a ghost town in Second Life is to set up shop in a virtual world "just to be there," said Giff Constable, VP of virtual-worlds media company Electric Sheep. The time for publicity stunts and press releases is over. Now a company needs to bring value to the venue.
"People's first impulse is to open a store, but for a lot of people that won't work," Mr. Constable said. Given a hypothetical challenge of introducing an extremely practical product -- say, a hearing aid -- into Second Life, Mr. Constable ran with the idea. "Replicating a hearing aid won't really work, but could you build a community of people who are hearing-disabled and allow them to vent their frustrations and share the experience of what it's like to live in a world where you are not discriminated against because you have bad hearing? And that's got to build you some serious brand loyalty if you ask me."
A virtual test-run
Value, of course, can work both ways. Electric Sheep client Starwood ventured into the virtual territories to research and develop the design of a hotel chain called Aloft. In building a virtual replica of the hotel, Starwood was able to collect thoughts and criticism at an early stage from the very influencers and bloggers it hoped to attract in real life. Through Second Life, the hotelier was able to make changes to its interior-design scheme. It also decided to include waterproof radios in its showers per one avatar's suggestion.
Aloft Hotels VP Brian McGuinness believes allowing people to provide feedback will give them some vested interest in experiencing the end result when it opens next year.
But Mr. Constable said the experience was not without its learning curve. "There was a big gap between when we got feedback and when we made design changes. In between there was nothing happening, but there was so much buzz, people were coming nonetheless," he said. That led to Starwood "getting criticism for something they weren't trying to do, which was be a destination. So, they put a cardboard box around it during the interim and explained that they'd be back with changes."
Patience pays off
Like Coke, Coldwell Banker spent a long time observing Second Life before finding the right way to enter the space. Once it saw that "land barons" were driving up costs on real estate, the financial institution realized it could become a regulator of prices and make an impression as an innovative real-estate brand to generations X and Y.
Within its first two months in-world, Coldwell has had roughly 60,000 visitors who spend an average of 10 minutes in its virtual office learning about real-estate opportunities both virtual and real. The company has an average 2.3% click-through rate, a massive improvement on the average 0.13% click-through rate of banner ads.
An unexpected perk for Coldwell is the number of people who have wandered into its virtual office and asked about employment opportunities. Granted, some want to be virtual realtors for the fun of it, but many are also hoping for a real-world job.
Other companies, including digital agencies Organic and AKQA, are developing or have already developed recruitment centers in-world, where the average age is 32 and participants are seen as individualistic, authentic and tech-savvy early adopters.
With standard in-world development costs starting at $20,000 to $30,000, and with $100,000 to $300,000 the norm for a year of strong and notable presence, according to Mr. Constable, the cost is small compared with the overall marketing budgets of major advertisers. The risk of failure, then, is also minimal.
Second Life Do's and Don'ts
-- Joseph Jaffe, president-chief interrupter, Crayon
-- Mark-Hans Richer, marketing director, Pontiac
-- Giff Constable, VP, Electric Sheep
-- Michael Donnelly, director-global interactive marketing, Coca-Cola Co.