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Fallon Brainfood: Virtuality

Aki Spicer
Aki Spicer
Aki SpicerDirector of Digital Strategy+Content Planning

Fallon strategic planners Aki Spicer (Aki Octagon) and Avin Narasimhan (Desi Stoneage) have come back from the future to offer their POV about Virtuality and it’s implications for brands. One of the hottest debates in marketing circles today is the viability of virtual worlds like Second Life. What are they? What do people do there Why? What’s in it for me—if anything? We’ve seen companies flooding these worlds, and some are finding it difficult to translate their virtual world presence into real world gains. The truth is, we traverse virtual dimensions every day without even thinking about it. From financial transactions, to games, to our daily Facebook interactions with friends, Virtuality is a new normal and it impacts many facets of our lives. It is through this lens that we explore what Virtuality means now and in the future, and what our agency needs to know to extract the most from it. *Brainfood is an monthly digest of Fallon Planner’s strategic intelligence and bridges the gap between trends, business issues, and actionable opportunities for the agency and clients.

Fallon Brainfood: Virtuality

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Virtuality
                                                         October 23, 2007
                                                                            ::Brainfood::




Copyright ©2007 Fallon Worldwide. All rights reserved.
Introduction


In today’s session of Brainfood, Fallon strategic planners
Aki Spicer and Avin Narasimhan break down the vast and
complex trends of Virtuality and their implications
for brands.




                                                             Copyright ©2007 Fallon Worldwide. All rights reserved.




                                                                   2
“80% of active internet users
will have a “second life” in a virtual world
                       by the end of 2011.

                 Gartner Symposium/ITExpo 2007




                                                 Copyright ©2007 Fallon Worldwide. All rights reserved.
Welcome to the first session of Brainfood.
What can you expect today?

A brief introduction to Virtuality and how we got here.

Virtual Worlds: the most visible form of Virtuality.
     Implications and trends in society.
     What it could mean for business.

Key takeaways for you and your clients.




                                                          Copyright ©2007 Fallon Worldwide. All rights reserved.




                                                                4
Virtuality: Our lives are increasingly “virtual,”
but we often don’t recognize it as such.




                                                    Copyright ©2007 Fallon Worldwide. All rights reserved.
We can trace the roots of our virtual pursuit
back to 1955 when Sensorama recreated the
full experience of riding a motorcycle.




                                                Copyright ©2007 Fallon Worldwide. All rights reserved.




                                                      6

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Fallon Brainfood: Virtuality

  • 1. Virtuality October 23, 2007 ::Brainfood:: Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 2. Introduction In today’s session of Brainfood, Fallon strategic planners Aki Spicer and Avin Narasimhan break down the vast and complex trends of Virtuality and their implications for brands. Copyright ©2007 Fallon Worldwide. All rights reserved. 2
  • 3. “80% of active internet users will have a “second life” in a virtual world by the end of 2011. Gartner Symposium/ITExpo 2007 Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 4. Welcome to the first session of Brainfood. What can you expect today? A brief introduction to Virtuality and how we got here. Virtual Worlds: the most visible form of Virtuality. Implications and trends in society. What it could mean for business. Key takeaways for you and your clients. Copyright ©2007 Fallon Worldwide. All rights reserved. 4
  • 5. Virtuality: Our lives are increasingly “virtual,” but we often don’t recognize it as such. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 6. We can trace the roots of our virtual pursuit back to 1955 when Sensorama recreated the full experience of riding a motorcycle. Copyright ©2007 Fallon Worldwide. All rights reserved. 6
  • 7. Flash forward to the 80s and 90s: works of fiction laid the groundwork for the concept of today’s visual Web. Copyright ©2007 Fallon Worldwide. All rights reserved. The Matrix Metaverse 7
  • 8. And beyond fiction, the work of French social theorist Jean Baudrillard helped to explain the basis of Virtuality as seen in culture. Copyright ©2007 Fallon Worldwide. All rights reserved. 8
  • 9. Virtuality reframes our economy, worldview, and culture. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 10. As early as the first iteration of Windows, we began a mass adoption of 3-D virtual surrogates on PC desktops. Copyright ©2007 Fallon Worldwide. All rights reserved. 10
  • 11. We trade millions of dollars everyday based on the virtual values. Copyright ©2007 Fallon Worldwide. All rights reserved. 11
  • 12. We express who we are and how we feel through digital representations and alter-egos. Copyright ©2007 Fallon Worldwide. All rights reserved. 12
  • 13. And many of us, particularly young people, are turning to games instead of movies and TV, driving mass awareness and further blurring lines. Copyright ©2007 Fallon Worldwide. All rights reserved. 13
  • 14. We’re moving away from 2-D MS-DOS style flat apps towards rich 3D environments that bring the same data to life. Copyright ©2007 Fallon Worldwide. All rights reserved. 14
  • 15. Digital prototyping enables the real parts to work flawlessly before they’re ever made real. Copyright ©2007 Fallon Worldwide. All rights reserved. 15
  • 16. Virtuality commands real love and attentions. Copyright ©2007 Fallon Worldwide. All rights reserved. 16
  • 17. We’ve reached the age where what was once fantasy and “futuristic” is now increasingly becoming a way of life. Copyright ©2007 Fallon Worldwide. All rights reserved. 17
  • 18. “Welcome to the desert of the real.” Copyright ©2007 Fallon Worldwide. All rights reserved. 18
  • 19. Virtuality is no longer nerdy fantasy. It’s real and it’s happening all around us. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 20. “ Personally, I feel the vague lineaments of something beyond Web 2.0, and they involve some fairly radical steps. Imagine a Web without browsers. Imagine breaking completely away from the document metaphor, or a true blurring of application and information. That's what Web 3.0 will be, but I bet we will call it something else. Copyright ©2007 Fallon Worldwide. All rights reserved. Stowe Boyd Social Media/Web 2.0 Theorist
  • 21. We’ve become beings of a digital world wherein almost any conceivable life event can—and largely does—take place virtually. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 22. Virtuality is reality, and it’s the next evolution of our increasingly digital social lives. Copyright ©2007 Fallon Worldwide. All rights reserved. Web 2.0 Web 3.0 22
  • 23. Virtuality is changing human behavior. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 24. “One of the things our grandchildren will find quaintest about us is that we distinguish the digital from the real, the virtual from the real. In the future, that will become literally impossible. The distinction between cyberspace and that which isn't cyberspace is going to be unimaginable.” William Gibson Copyright ©2007 Fallon Worldwide. All rights reserved. author, futurist
  • 25. Understanding Virtuality can be a vague and somewhat abstract concept. Today we’ll look at what is the clearest manifestation of Virtuality. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 26. Virtual worlds have been buzz words in popular media as of late, and myriad forms exist. Digital Life Pure Gaming/Fantasy Copyright ©2007 Fallon Worldwide. All rights reserved. Kids Play 26
  • 27. It’s not happening on the fringes of society, but rather has engaged us globally. 1% of the world’s population registered World of Warcraft residents. Time spent in Second Life increased six-fold in 2006. If NeoPets were a country, its population would be the 5th largest in the world. Club Penguin has 4M+ unique monthly visitors and generates a 50% profit margin, projecting $30 million in 2007 profits. Copyright ©2007 Fallon Worldwide. All rights reserved. Swivel Data Research August 2007 Wikipedia Social Media Club May 2007 27
  • 28. Second Life populations are sky rocketing as they become more integrated in our daily lives, translating into real world commerce. Copyright ©2007 Fallon Worldwide. All rights reserved. Blizzard Entertainment March 2007 Blogpulse trend search July 2007 28
  • 29. slowing growth. Yet, Second Life may be experiencing Copyright ©2007 Fallon Worldwide. All rights reserved. 29
  • 30. It’s important to remember that we’re still in the early stages, and so far these worlds are reminiscent of our first forays onto the Internet. Copyright ©2007 Fallon Worldwide. All rights reserved. 30
  • 31. Exploring Virtuality through the lens of worlds that let users fully define the experience reveals the most interesting insights. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 32. People are people…and even in the metaverse, we still behave like people. Copyright ©2007 Fallon Worldwide. All rights reserved. Linden Labs 2007 Technographics Survey 32
  • 33. We’re creating living, breathing societies with unique social mores and culture, which embody the ideals of autonomy and self-efficacy. Copyright ©2007 Fallon Worldwide. All rights reserved. 33
  • 34. It’s an evolution of the very idea of “face-to-face” interaction and personal connections. Copyright ©2007 Fallon Worldwide. All rights reserved. 34
  • 35. They provide a new venue for the exchange of dialogue and even political movements with no consideration of physical boundaries or barriers. GLOBAL IBM CONFERENCE ADVENTURE ECOLOGY ACTIVISTS Copyright ©2007 Fallon Worldwide. All rights reserved. EXPERT PANEL AT CRAYONVILLE 35
  • 36. Copyright ©2007 Fallon Worldwide. All rights reserved. 36
  • 37. More and more we see life imitate art as Virtuality redefines traditional experiences. James Cameron’s new movie—Avatar. Draft FCB mockumentary of Second Life. Copyright ©2007 Fallon Worldwide. All rights reserved. CSI:NY will take murder mystery into the virtual world. 37
  • 38. Copyright ©2007 Fallon Worldwide. All rights reserved. 38
  • 39. “There's real money to be made in the marketplace. People actually earn part or all of their real-life income from such businesses as party and wedding planning, tattooing, auto manufacturing, fashion and jewelry designing, real estate development, architectural design, bodyguarding, publishing, and private investigation.” Copyright ©2007 Fallon Worldwide. All rights reserved. —Patricia Duebel, PhD The Journal
  • 40. What could it all mean for business…and brands? Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 41. As with most emerging technologies, the potential for business application is often hard to see at first glance. HOW MIGHT OUR BRAND FIT IN HERE? Copyright ©2007 Fallon Worldwide. All rights reserved. 41
  • 42. Copyright ©2007 Fallon Worldwide. All rights reserved. 42
  • 43. Kid-centric fantasy may be perhaps the easiest in-roads for brands… Copyright ©2007 Fallon Worldwide. All rights reserved. Answers.com via Wikipedia 43
  • 44. …as youth today are rapidly embracing Virtuality. 2007: 24% of U.S. child and teen Internet users visit virtual worlds. 2008: 34% 2011: 53%. Copyright ©2007 Fallon Worldwide. All rights reserved. 44
  • 45. Even for today’s youth, branded virtual worlds are providing a level of engagement that static sites can’t compete with. Copyright ©2007 Fallon Worldwide. All rights reserved. 45
  • 46. Companies eager to jump on the virtual bandwagon have learned cost of entry is more than just “showing up.” Wells Fargo—Departed. American Apparel—Barren Copyright ©2007 Fallon Worldwide. All rights reserved. Business Week Online May 2007 46
  • 47. The right to participate needs to be earned. The NBA understood this imperative and truly offers a unique experience and commitment to residents. Copyright ©2007 Fallon Worldwide. All rights reserved. 47
  • 48. With or without brands, resident entrepreneurs are reaping lucrative rewards through their own creations. Alan Graief Anshe Chung Philip Rosedale Reuben Steiger Sibley Verbeck Land Baron Land Baron Creator: SL Consultant Consultant +$1M revenue +$1M revenue $19M in VC +$6M in fees $15K per project Copyright ©2007 Fallon Worldwide. All rights reserved. Kevin Alderman Alyssa LaRoche Adult Entertainment Clothier $50K and up $30-$100K fees BW Online April 2007 48
  • 49. Many of these content creators are extremely protective and skeptical of those who would intrude without respect. The influx of real world brands is sometimes met with discontent and other times overt hostility. Copyright ©2007 Fallon Worldwide. All rights reserved. 49
  • 50. Brands that add the most value to the user experience are the future—not just of virtual worlds, but of the social web and how we live our lives. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 51. As an example, the desire for connections and companionship in these worlds have spawned new industries. In-world engagements like sldogs.com allow us to buy and accessorize a pup to accompany us in digital life. Copyright ©2007 Fallon Worldwide. All rights reserved. 51
  • 52. And worlds like Neopets attempt to redefine the idea of pets for the digital space. Copyright ©2007 Fallon Worldwide. All rights reserved. 52
  • 53. As interest in Virtuality grows, some innovative companies are cutting out the middleman and building their own worlds. JC Penneys (Forterra) Novartis (Prontomedia) Copyright ©2007 Fallon Worldwide. All rights reserved. BusinessWeek Online May 2007s 53
  • 54. Virtuality soon demands reappraisal of our socio-political assumptions. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 55. Life’s eternal questions still linger…and take on even greater significance in Virtuality. Copyright ©2007 Fallon Worldwide. All rights reserved. 55
  • 56. And these questions spark the collective curiosity of burgeoning societies and new communities. Copyright ©2007 Fallon Worldwide. All rights reserved. 56
  • 57. Copyright ©2007 Fallon Worldwide. All rights reserved. 57
  • 58. The complications of digital life has spawned ethical debates of copyright, decency, freedom and access—since the 90s when the Internet was in its infancy. …and they continue still, without clear resolve. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 59. DISPOSABLE FAD? IMPRACTICAL? DEHUMANISING? UNNECESSARY? Copyright ©2007 Fallon Worldwide. All rights reserved. A HAVEN FOR PORN? 59
  • 60. As with any emerging tech, there are bumps in the road—and even predictions of impending doom. Copyright ©2007 Fallon Worldwide. All rights reserved. 60
  • 61. “For virtual worlds and metaverses to achieve greater potential in the marketplace and grow beyond early adopters, the experience must be untethered to meet the needs of the Anywhere Consumer.” Yankee Group Analysis of Second Life, 2007 Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 62. While virtual worlds may not be the final chapter, Virtuality is the OS of tomorrow. Boot up. Copyright ©2007 Fallon Worldwide. All rights reserved.
  • 63. We’ve covered a lot today. Some key takeaways… Virtuality: Life Remixed: Extension of our real lives. Worlds Unbound: Expanding global culture. Spawned Industries: Entirely new economies. Engage Me: Fueling participation, not just consumption. Control and Protect: Creative self-expression/control of ideas. First Life Beta: A new level of try before you buy. Visual Web: A richer 3D experience. Half Life: Blurring lines between real and virtual. …leading us toward a broader ubiquity of Virtuality. Copyright ©2007 Fallon Worldwide. All rights reserved. 63
  • 64. Continue the conversation on our blog: http://fallontrendpoint.blogspot.com Participate The Sims Fantasy Spawned Industries Customization Co-Created Digital Life Gaming Neopetz Avatar Kidz Play Self-Efficacy There.com Humanized Google Earth Webkinz Digital Self Visual Web Autonomy Parallel Life Emoticon Instant Message Virtuality Slurl 3D Residents Postcards from Second Life Borderless Age Life Remixed Habbo Hotel Virtual Worlds Life Beta Youth Escapism Early Adopter Metaverse User Defined Experience Entropia Copyright ©2007 Fallon Worldwide. All rights reserved. Test Drive Engage Me Control and Protect Virtual Life In-World Zwinky Playdo Connections Brand Evangelists Sacred Creations Playstation Home Tech Savvy Virtual Culture Futurist Worlds Unbound Business 3.0 World of Warcraft 64
  • 65. And look out for the invite to next month’s Brainfood session. Brainfood is an executive digest of Fallon Planner’s strategic intelligence and bridges the gap between trends, business issues, and actionable opportunities for its readers. Copyright ©2007 Fallon Worldwide. All rights reserved. 65
  • 66. Copyright ©2007 Fallon Worldwide. All rights reserved. 66