Supporting business in Second Life seriously

However, it was also clear that brand awareness only worked to a degree. With multi-million budgets to do things in Second Life, the return on investment was low if you just “merely” got a “few thousands” to visit your virtual presence. Now you should understand that corporations do not only invest “millions” in ads and TV spots. They organise a lot of events — where sometimes their audience is “just hundreds” or “thousands” and not “millions”. Usually, a marketing department will be quite happy to do a product launch with just 50 people in the audience, and spend a few dozens of thousands of dollars in it, if they know in advance that those 50 people are either potential clients, partners, opinion makers, journalists, or possibly VIPs that might give interviews to journalists. These kinds of events happen all over the place; this weekend, for instance, I saw that Mercedes Benz promoted a fashion show in Miami for beachwear. What have cars and bikins have to do with each other? Well, the hundreds that attended the show are potential buyers of Mercedes cars 🙂 And a journalist covering the event for a fashion magazine or fashion network channel will show the big Mercedes logo — free advertising on TV!

So it’s not uncommon — I would say, it’s even more common! — that this “small-scale”, more personal form of advertising, through sponsoring of selected events (or creating their own “product launch” event), is actually more widespread and gets a proper return on investment, in some cases better than when using massive mainstream advertising. That’s why these things are so popular. Targeted marketing usually gets more results for the same amount of money invested, and the number of attendants is less important than the ratio of expected return. Put in other words: if Mercedes invested, say, US$20,000 on a show that attracted a hundred people, but one of them buys a new Mercedes car, that’s a good return that will have covered the costs (any “casual” showing of Mercedes’ logo on the streets — saving the costs of leasing a billboard — or on the TV coverage of the event — saving the costs of a TV ad — is just extra brand awareness for free, which is quite cool). If they have to spend US$20 million to do a TV ad on a specialised channel (one mostly seen by the “A” type of consumers) that might have 100,000 viewers, but none buys a car, it was a bad investment. In terms of brand awareness, the reach might have extended to 100,000 viewers, which is good, at a price of US$200/viewer. But no sales. For the same ratio (US$200/attendant) you might sponsor a much smaller event and get a single sale that would pay for it. Also, it’s far easier to measure direct effectiveness of the result of a small event (imagine you hand out a card that will give you a 1% discount if you buy a car; that way, you know if someone comes with that card to the car stand, it was someone who attended that fashion event) than on the mainstream media (it’s far harder to track down who viewed an ad on TV or on a magazine and came to your stand to buy a car).

Surprisingly, very few companies are exploring that area in Second Life, which is ideal to get in touch with a geographically distributed population (instead of setting up small events on several different cities, you just need to set up a single event in SL, and people from all over the world might come to see what you’re doing). My company developed something like that for a software development company in Florida — you could buy their product via Second Life and get a discount. They made enough sales to keep their virtual presence going for several years, although they weren’t really considering SL as a “major retail channel”, until the financial crisis finally forced them to cut all marketing costs and they had to leave SL — at least temporarily. That’s normal: in real life, sponsoring events like this are made in a specific timeframe, and this is something that SL residents have a huge difficulty to grasp, since on the Web, companies rarely abandon their websites. Once a company is in SL, it is expected that it stays in SL forever, but that’s simply not how the corporate world works. Products have a limited timeframe of existence (just look at fashion, beauty, or TV shows). Their promotion only makes sense during their existence; when the product line comes to an end, its promotion ceases.

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