Marketing beyond Online: Virtual World Opportunities

MARKETING BEYOND ONLINE… VIRTUAL WORLD OPPORTUNITIES! Prepared for the Fashion Group International–Houston Kay E. Strong, Ph.D. [email_address] 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