00 Brands & Branding
Brands in Second Life
started at the Adidas store, butno one was there amid theperfect racks and in-storedisplays, I then headed over tothe larger Reebok store. One person was there, but they were leaving. American Apparel had a nicely laid-out store with its merchandise wellpresented and unobscured, thanks tothe absence of shoppers. Where was everyone? These areglobal brands with extensive retailexperience and their stores wereempty in prime shopping time. Theconsumers were around, they were just in home-grown stores buyingbrands with names like VektorWear,Shiny Things and Cytranized Designs. And the consumers weren’t walkingthe high street of a bricks-and-mortarcity, they were shopping in SecondLife, the digital social networking andco-creation phenomenon that many brands around the world are trying to ﬁgure out how to get involved in andbeneﬁt from.Started in June 2003 by SanFrancisco company Linden Labs,Second Life is the current poster child for a digital marketplace that many believe will become increasingly important for brands. By mid-June2007 Second Life had over sevenmillion members, about 90 percent of whom had signed on in the precedingnine months, and investors thatincluded eBay founder Pierre Omidyarand Amazon CEO Jeff Bezos.It is, however, not all plain sailing for Second Life, or to refer to it by itspopular acronym SL. The average30,000+ people on SL at any one time(June 2007 average) has put itsinfrastructure under pressure withresultant sluggishness, crashes andkey functions like search often not working. Despite these problems,industry insiders remain positiveabout the future of SL andcompare its problems to theteething pains the Internetexperienced in the early 1990s.Getting started in SL isnot difﬁcult and involvesdownloading a browser-type interface and then following simple instructionsto create a 3D digitalpersona, or avatar, that you movearound SL using keyboard and mousecontrols. Communication with otherSL members is currently via text but voice communication is coming. Although it has the look and feel of a video game, SL differs from otheronline multiplayer games in two keysareas. Firstly, instead of traveling in adigital landscape constructed by thegame’s programmers the inhabitantsof SL design and construct their own worlds which are connected by aStar Trek-type teleporting function.Secondly, inhabitants own the digitalcreations they build or acquire andcan sell these to others in SL. Transactions within SL are doneusing Linden dollars, a virtualcurrency that is purchased withand convertible into US dollars at a ﬂuctuating exchange rate which inmid-June 2007 saw USD 1 buy 265Linden dollars. This in-world trading,including virtual land rentals paid toLinden Labs, resulted in a daily ﬂow of transactions worth about USD 1.6million.SL says about 40,000 individuals aremaking a proﬁt doing business on SLand the most successful handful areearning in the hundreds of thousandsof US dollars annually. Whilst theproﬁts may be attractive forindividuals, they are currently not thereason that brands are making their way into the virtual world.Creating brand awareness is aprimary objective for brands like Adidas, Reebok, American Apparel,Sony BMG, Toyota, Nike, Reuters,Coke and Sony Ericsson. But their virtual stores are largely empty as SLinhabitants favour brands created andsold within SL. A 2007 survey by Komjuniti, anagency that develops and managesbrand communities, found that many real-world brands were failing in theirSL efforts with 72 percent of respondents saying they weredisappointed with the activities of global brands in SL. A third of respondents were unaware of thebrand’s presence in SL and 42 percentsaid it was nothing more than ashort-term trend.
Brands & Branding
Like many in Second Life, Patrick Collings’s avataris an improvement over the real-life version. In hiscase, better looking, ﬁtter and a decade youngerMajor brands like American Apparel go to great lengths to builda presence in Second Life, only to ﬁnd that after an initial interesttheir stores are largely empty