Analysis of Company Presences in Second Life

Today's "Second Life for Businesses" workshop at Arvetica in Geneva provided me with first-hand insights and discussions about the corporate world in Second Life (SL). Arvetica's Alex Osterwalder analyzed real life (RL) company representations in SL and categorized them by "business utility (future revenue)" vs. "user/avatar (client) interaction" into several types:

1. Represent
2. Advertise
3. Events
4. Prototype & test
5. Trade
6. Collaborate
7. Engage
8. Build Relations

Representation is the most basic form, in which companies simply build a presence, announce it, and wait for attention by the SL residents. Their representations typically do not involve any form of interaction with the avatar, but rather provide information about their RL products and services. Switzerland's first bank to be in SL, the Banque Cantonale Vaudoise (BVC), is an example of a pure representation. As I was able to chat with the person being involved with BCV's SL representation today, it was interesting to find out that they're using SL to become comfortable with a virtual world, i.e. to be ready for the future.

Advertising is the next step, in which companies take an active role in attracting SL residents--traffic, basically--with the creation or rental of billboards in SL. As land ownership restricts building rights, such billboards are typically managed by special in-world advertising agencies, such as MetaAdverse.

The hosting of an event allows for more interaction with avatars, e.g. direct communication through chatting. Adam Reuters' interviews including residents' questions conducted at the Reuters Atrium during the World Economic Forum is an example of such event-based marketing effort.

Prototying and testing of new products allowed Starwood Hotels to get SL consumers' feedback on new interior design as well as general layout through their Aloft hotel in SL. This allows companies to test and improve products based on live market research--at least in the virtual market of SL. Conclusions can then be drawn to the design of RL products.

Trading involves the act of actually selling a SL and/or RL product to the SL and/or RL customer. American Apparel, e.g. sells virtual representations of its RL products to SL residents. Dell, on the other hand, sells its RL product to a RL customer through his/her SL avatar. Yet to complete the order, the SL resident has to switch to the good old Dell website.

Collaboration, as in the case of IBM, allows employees to get together for business meetings or socializing within SL. As the introduction of voice communication in SL is planned for June, the whole notion of collaboration within SL will definitely get to another level. Being in a 3-D immersive environment such as SL allows IBM's employees to experience a feeling of togetherness that enhances the involvement in the meeting--and it might actually be fun, too.

By engaging, Alex was referring to the company's goal to involve the residents in a playful manner with its products. An example might be Toyota's Scion City, in which Toyota allows residents to get and use a Scion.

The last stage--for now--is building relations. This involves cross-channel marketing and customer relationship management using SL. Wells Fargo's Stagecoach Island was an example of a representation that offered exclusive services to its RL customers. In 2006, Wells Fargo moved to SL's competitor Active Worlds.

Which brings me already to one of the problems raised by a fellow workshopper from Novell today (by the way, Novell's open-source development framework Mono can/will be leveraged to create AI applications in SL): Virtual World Interconnectivity, or the portation of code from one world to another. In the end, Wells Fargo took some of the textures from SL and reused them in Active Worlds. Yet such an adaption of code could probably be done more automated. Once such a tool exists, the risk of trying a representation for a company would probably be considerably lower. How can Virtual World Interconnectivity be enabled?

Although Active Worlds was mentioned above as an example for a competitor to SL (as seen by Wells Fargo), the whole market for Virtual Worlds seems not yet to be clearly defined. What are the competitors to SL and what features does a Virtual World need to possess in order to compete with SL?

Another rather operative problem was mentioned by the representative from BCV as well as by other residents during the workshop: the SL search engine. Currently, there's no good (as in Google-good) search engine for SL content. Here, the development of SL closely resembles the development of the Web in the beginning of the 90s: massively growing information without effective means of searching. Also the Second Life Liberation Army's efforts against the v-commerce in SL are similar to the anti-e-commerce efforts by some groups in the 90s. As Virtual Worlds--SL or another--might be the next Web (3-D), the question arises: What can one learn from the diffusion of the Web (1.0) in regards to Virtual Worlds?

At the end of the workshop, we were asked for a show-of-hands: Do you believe that Virtual Worlds will play an important role for businesses in 2009? Everyone did. On the question if you believe that SL will be "the" Virtual World for businesses in 2009 only 1 out of 10 attendees raised his hand.

Have a look at today's slides below and check out Arvetica's upcoming "Second Life: Understand & Explore the Business Potential" workshop.